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Las Vegas, NV Estate Planning & Probate Blog

Friday, November 23, 2018

Preparing Your Children For Inheritance

How do you prepare your children to receive their inheritance? Your children receive their inheritance according to the directions you provide in your trust document.  What if your children are not fiscally prepared to manage their inheritance?  Talking to your children about your plan to include them in your in regard to their inheritance is a vital step to make sure that your legacy is fulfilled as you intended. 

  1. Family Discussion.

    Your beneficiaries receiving the inheritance are usually family or friends close to you.  Often, your beneficiaries are your children.  Whether or not they are adults or minors, having an open discussion with your children about what inheritance means to you will not only manage their expectations, but will open up an ongoing channel of communication between you and your child.   There are a few creative ways you can integrate this conversation into your normal family setting. Hosting a Family meeting once or twice per year with some fun food, board games, and/or a movie will soften the tension on the delicate topic.  Start the meeting with an honest discussion on your decision to name your children as beneficiaries of your trust and what you hold to be your core family values.  Encourage your children to ask questions and share their thoughts on their own values and goals.  Family discussions not only inform your children of your intentions but can also offer a bonding experience for your family.

  2. Prepare Them.

    Discussing the macabre topic of death in parallel with money and material things seems a little unsavory. However, just as you managed organizing these two subjects on paper, you can use that same organization as a tool to assist in preparing your children in a practical sense.  All too often, children who grow up with a sense of comfort and an above-average way of life will experience a rude awakening as they grow into adulthood.  As time changes, markets fluctuate, and life happens, your assets can be substantially affected during your lifetime.  Although there is nothing wrong with providing your children with a comfortable life, teaching them financial responsibility and accountability will only prepare them to adapt to changes.  Starting early by giving an allowance for chores/small tasks will emphasize the monetary value of a job well done. Budgeting and living below their means will enforce the idea that independence is attainable with the right mindset.  Requiring your older children to work summer jobs shows that net worth does not equate to self -worth and wealth is not bottomless.  Over time, your children will understand what it feels like to make money, spend money and save money.  Remember, preparation for financial independence is a habit, not an occurrence (consistency is key) and a positive experience promotes a positive relationship!

  3. Re-visit. Re-visit. Re-visit.

As time goes on, your children are going to grow up and you will start to have some insight as to how well they cope with their own finances.  If you have a child who is a spendthrift, you may want to amend your trust to limit/control their share.  Alternatively, your once wild child grew up to be a fiscally responsible adult with a family and you would like to give them more control over their inheritance.  If you now have grandchildren, you may want to specifically name them in your trust and start the conversation with them as you did with your own children.  The point being is this - as life changes and your kids grow up, taking the time to re-visit your trust, family values, and goals will keep your estate plan consistent.

Think of some creative ways to get the conversation started with your beneficiaries.  Disclosure doesn’t necessarily mean spilling ALL of the beans, but in the long run, your kids will be thankful that your concern for their future not only prepared them for inheritance but made them stronger individuals.

-by Laura Bown, J.D. with Tiffany Ballenger Floyd, Esq. (Nevada & California Estate Planning Attorney), © 2018, Phillips Ballenger, PLLC


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