Your inheritance. How much should you leave your children?

2 October

When considering your legacy, deciding how much to leave your children, grandchildren and other beneficiaries is one of the most important questions families face. However, the amount you provide is only one factor of many that you should consider.

When helping clients clarify how much they wish to leave to their beneficiaries, the Warren Buffett quote often emerges: “I want to give my kids enough so that they could feel that they could do anything, but not so much that they could do nothing”.

Our experience with successful families means we can help you understand what you should consider when planning your distribution.

The first thing you should consider is discussing your plan with your dependants. This gives you the opportunity to communicate your reasonings and expectations.  We have chaired several meetings intended to open the conversation in a structured way regarding intergenerational transfer.

Try matching the distribution of your funds with key moments in your beneficiaries’ lives. It may be beneficial for your dependants if they receive their inheritance later in life, rather than one lump sum earlier. This can allow them to become more established and not rely on the inheritance. We often suggest beneficiaries to access inherited wealth at around age 25, or at a time when you believe they may need funds for education, purchasing a house or business development.

There are also tax considerations that need to be considered on the question of whether funds are distributed during your life or upon death.  A good inter-generational plan considers tax and balances transfer of wealth to the next generation both during and post life.

Legacy and wealth transfer planning is a high priority for our clients, and should include structured details to ensure your beneficiaries use this wealth to achieve their goals and enjoy the quality of life you envisage for them.

For successful distribution, don’t forget to look beyond dollar amounts and structure your distribution to really help your dependants obtain the most value from your estate, while still enabling them to work towards their financial and lifestyle goals.

podcast

Whether you have significant financial resources and question the meaning of success, or you’re wondering whether being that little bit wealthier will make you happier, this is the podcast for you. The It’s Never About Money site is also a hub for money related blogs and education.

visit the site

listen to the podcast on