You have countless ways to divide your estate. Fortunately, myriad tools, from properly drawn-up wills to a range of trusts, can help you provide for the generations to follow.
Before you get to the legal and financial details, you have to consider what you want to achieve in the long term:
- Communicate your family’s values.
- Assess the readiness of the generation about to receive the windfall.
Let’s say that your children range in age from 17 to 22:
- Your eldest has a child she’s raising on her own.
- Your middle child makes you feel uncertain about his sense of fiscal responsibility.
- Your youngest also gives you pause about how well she’ll react to the wealth you will leave her.
Should you set up a way to allocate a fraction of your total wealth to your children and devise a foundation for the bulk of it? Planning ahead seems to be a wise move. For example, consider the following situations:
- You have a family business that is the key component of your assets.
- Your children are not deeply involved in running your family business.
- Your children are involved in the business only conversationally.
- Your family’s shared values have emerged as the business has dominated family discussions.
Consider Your Particular Family Dynamic
When your adult children face the prospect of an inheritance, the ability to deal with it varies for each individual. Accommodating your needs for the remainder of your life takes precedence, but you also must consider the specific needs of the next generation and perhaps beyond. To get started, consider the following:
- Take stock of your total wealth.
- Decide what you can reasonably do for your heirs, based on their ages and positions in life, such as providing for education, making a down payment on a home or purchasing a car for work.
- Think about multigenerational issues, such as providing for grandchildren separately from their parents. For example, you could set up a trust for young grandchildren that is removed from their parents’ inheritance.
Although this may sound complex, you have to plan your estate or it may be disposed of according to government rules rather than according to your wishes. Call us today and we’ll get you started on creating an inheritance plan that aligns with your goals.