As a parent, you want to make sure that your children are well taken care of, throughout your own life and afterward. When you pass your wealth to your children, you want to make sure that you go about it in the right way. This will help you to protect your family and ensure that your generational wealth will continue into the future.
Favoring One Child Over Another
When you are leaving money to your children, you want to be as fair as possible. While you may have a better relationship with one child or another, you shouldn’t let that impact how you distribute your wealth, except in extreme cases. Instead, you should try to be as fair as possible to your children.
If you aren’t, it can negatively impact their relationship with one another and even lead to your will being contested. So, rather than showing favoritism in your will, strive to be practical and fair so your children feel like they are being appreciated equally.
Not Putting Assets in a Trust
Rather than having all of your assets pass directly to your children, you can use a trust to legally protect them. The trust can have conditions that your children need to adhere to spend their inheritance.
It can also have age requirements before your child can access their money. This can help them to be more financially responsible with the wealth they inherit. Trust can also be used to protect your property. Without a living trust, your home will go into probate.
Making It a Surprise
There are more likely to be problems after your death with the distributions of your assets if your children don’t have realistic expectations. Talking to them about the contents of your will can help them to understand what their inheritance will look like and why. This can help to smooth the process for your children and make it easier for them to enjoy their inheritance without being stressed about their relationship with their siblings. Be open about your finances with your children, so you can all be on the same page.
When you want to pass your wealth on to your children, you don’t have to make things overly complicated. But make sure you understand the laws surrounding inheritances so you manage things properly. This will help you and your family members to have peace of mind over the years.
Here’s more to read: Creative Real Estate Financing