So, where will your stuff go when you die? Think about it for a minute.
Who will get your stuff and how much will they get?
Will the inheritance you leave make a big difference in their financial lives?
In many cases it will, and it may be a lot more money than they are used to having. Will they be ready to handle it wisely?
If you know your heir is not good with THEIR money now — they don’t save, they don’t budget, they don’t have an emergency fund, they often overdraw their accounts — then what will happen when they inherit YOUR money? Will they handle the inheritance better or worse than their own money?
It’s usually worse.
In our experience, people think that inheritances will last forever, and so they spend it. And then they spend some more. And then one day — when it’s too late — they realize that it’s all gone.
Parents spend a lifetime protecting their kids — from running in the street or touching the stove or making bad choices as teenagers — but many don’t think about how planning at death is another way to protect your kids.
With proper planning, you can set them up to succeed and help protect what you worked so hard for.
If you are concerned that your child (or niece or nephew) is not ready to handle an inheritance, you can set up a system to help them. This system would include a trustee to make decisions about the money you leave, plus a set of instructions about when and how the money can be used.
The goal? To make sure that hard-earned inheritance will last to provide ongoing security, steady income, and maybe even funds for your heirs’ retirement.
If you have concerns about your children’s financial habits, and how that could affect your estate planning, give us a call at 217-726-9200 or keep learning with the following posts:
Have You Ever Paid Off a Child’s Credit Card?