You’ve saved enough to leave a parting gift for the kids, but will they use their inheritance wisely?
You’re not alone if you’re concerned: 35% of people are crafting their estate plans to avoid mismanagement of money by their heirs, a recent survey from WealthCounsel found. Luckily, there’s a lot you can do now to make sure your children won’t have you rolling in your grave.
Prep them for what’s coming
Don’t let your will reading be the first time an heir hears about his inheritance. Meet with adult beneficiaries to lay out your desires for your legacy.
“Children who talk with their parents about this are much more responsible in planning for their future with the money,” says Waltham, Mass., financial planner Lea Ann Knight. She suggests giving kids the option to see a financial adviser or take a finance course if they’ll inherit more than 50% of their income. That way, you can rest assured that they will avoid missteps due to financial ignorance.
Give them practice
Consider passing down some cash during your lifetime so that you can guide your heirs while you’re still around, suggests Ann Arbor financial planner David Shotwell.
You and your spouse can each give up to $14,000 per person
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