Most of us have heard stories of young people who were left a considerable amount of money by their parents, and therefore never felt the drive to succeed on their own merits. Too often, it doesn’t end well for them.
That’s why many people who have a considerable estate choose to leave it to other beneficiaries, like charities. They want their children to work for what they have, just as they did. They know the satisfaction and self-esteem that this can bring.
It’s certainly laudable to leave a considerable portion of your assets to charities and others who are doing good work in the world. However, there are other options if you want your children to make their own way in the world and become financially and socially responsible citizens. One is to designate that they will not receive their inheritance until their retirement years.
One financial advisor explains that by leaving them money for their retirement, you’re still requiring them to strive for success, manage their money carefully to buy a home and put their kids through college. However, you’re also taking some of the burden of saving for retirement off of their shoulders.
As with all estate plans, it’s important to discuss this type of plan with your children. They should understand what your goals and wishes are for them. You don’t need to tell them exactly how much money their inheritances will involve.
Depending on how the money is invested, it could be worth considerably more once they receive it than it does at the present time. However, knowing that they’ll have a comfortable nest egg can help them spend more of their earnings to have a more comfortable lifestyle leading up to their retirement.
Your California estate planning attorney can help you draft or change your estate plan to help your children and other loved ones benefit from the assets you’ve accumulated while working to help ensure that they don’t derail their opportunity for an independent, productive future.
Source: Kiplinger, “How to Help Your Children Financially Now Without Giving Them Any Money,” Bruce S. Udell, accessed Sep. 28, 2016