aura wealth advisor
08 Mar

Legacy Planning: Preparing Your Children for Their Inheritance

On: 8th March, 2016   //   By: admin

Training Your Children to Inherit is an Important Part of Legacy Planning

You may be carefully cultivating your wealth, with dreams of leaving your children with a sizable inheritance that will provide for their needs or continue the vision that you have for a particular cause. However, many investors overlook an important part of legacy planning. Preparing your children for an inheritance is a critical step for ensuring the wealth will be protected as it transitions to the next generation.

Consider a few thoughts about legacy planning, keeping in mind the preparation of your children for an inheritance:

Bring in a professional. You may feel ill-equipped to explain the details of your estate, or you may believe that your children will respond better to a wealth advisor. Having a professional advisor summarize the information related to your portfolio is a helpful step, because the advisor can answer any questions about the estate and serve as a qualified representative that supports your interests but is also experienced at working with beneficiaries of an estate.

Don’t avoid talking about the money. Many investors put off having a conversation with their children about money. You may worry that your children will develop a feeling of entitlement towards your wealth or stop advancing their own investment goals if they believe that they have an inheritance coming. However, talking about your wealth has some great benefits. You have a chance to discuss your vision for the inheritance, and communicate any specific ways you hope that the money will be used.

Consider their ages. Having a discussion about the wealth you are building should include some consideration for your children’s maturity. If they are 18, they will have a much different perspective than when they are 35 years old. Determine what your children should know about your portfolio based on their age and experience.

Think about a variety of options. Inheriting a large sum of money can be overwhelming to the average person. You may want to think about passing on a smaller amount while you are still here to help your children navigate the process of protecting and growing an investment portfolio. Your legacy planning can include not only a nice inheritance for your beneficiaries, but also the tools to manage it well.

Do what makes sense to protect your wealth. Think about your particular investments. If you have real estate, consider which of your children are most equipped to handle managing a building, which can be difficult to split between beneficiaries.

Many families receive a large inheritance, only for it to evaporate by the third or fourth generation of beneficiaries. When you are considering your strategies for legacy planning, don’t forget to teach your children how to receive an inheritance, and then protect and grow the assets.

At Aura Wealth Advisors, we regularly work with families to help them transition wealth to the next generation, with a full understanding of the vision for that inheritance. Call us to set up an appointment, where we can discuss your legacy planning goals and create a plan for the future

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