The subject of estate planning is inherently awkward. However, it is important that you discuss your estate planning with your spouse, your kids and other potential beneficiaries. Let’s take a look at a few tips that will help your loved ones make the most of the money and other assets they inherit.
Make Your Values Pertaining to Money Perfectly Clear
If you have not broached the subject of a potential inheritance, it is time to sit down with your family and discuss this important subject matter. Explain what you value in the context of money and planning for the future. Kids who understand their parents’ values are that much more likely to understand what they should anticipate receiving in the form of an inheritance. If you favor any specific philanthropic causes, communicate that favoritism to your children so they know which charities they should donate to in the event that they do not have children of their own and there is no one else worthy of receiving hard-earned money amassed across several generations.
Consider Whether Your Kids are Good With Money
One of your kids might treat money as though it is meaningless while another might genuinely respect the value of a hard-earned dollar. It is a mistake to leave a considerable sum of money to a son or daughter, even if he or she is an adult, if the proper money management skills are not in place. If you are uncomfortable with your offspring’s judgment, have a discussion in which you teach them the merits of money management. Otherwise, you won’t have any faith that your son or daughter will spend your money wisely
If your kids have demonstrated financial responsibility, it might be wise to share part of their anticipated inheritance with them while you are still living. This approach empowers you to provide financial guidance and also observe your kids money management skills. If necessary, consider establishing a well-structured trust with the assistance of a certified financial planner or certified estate planner to ensure your desires for your wealth are adhered to upon your departure from this plane of existence.
If There Will be an Inheritance Imbalance, let It be Known Now
The last thing you want is for your kids to argue with one another or other family members about their inheritance after you pass away. You can avoid such family drama by making it perfectly clear that there will be an imbalance between the money distributed to family members. Explain why there is an imbalance and the focus will be on your life well-lived as opposed to variances in inheritance amounts in the days and weeks following your death.
In fact, it might even be worth noting your rationale for the different inheritance amounts in your will. Communicate these desires in written form within the document and you will have done everything in your power to prevent a potential claim of lawyer drafting errs or other legal grounds for contesting the will.