Passing a large inheritance to children, such as cash, a business, real estate, automobiles, arts, jewelry, stocks or retirement accounts, is relieving for parents. It feels good to know your kids will have a comfortable standard of living should anything happen to you. However, without the needed information, the inheritance may not benefit them as you would like.
Thus, it will help to take one step at a time. And one of the steps is ensuring your children are ready for the inheritance. Here is how to prepare them.
Tell them about the inheritance
Beneficiaries who don’t understand how their inheritance was garnered may not hold it with the respect it deserves. Therefore, consider telling your kids stories about your wealth.
If you inherited it from previous generations and managed to grow it, tell them how you did it. If you created and expanded the wealth, let them know. When children understand how their family wealth came to be and the importance of passing it to succeeding generations, they may not take it for granted.
It will be best to start having this and other financial conversations early.
Distribute the inheritance accordingly
Children are not equal. They should be loved and treated equally. But, in most cases, how they think and perceive matters are not the same. You know your kids well and can distribute the inheritance according to their needs and capabilities. While this is beneficial, you should talk to them when they are older about how and why you made such decisions to avoid misunderstandings.
Distributing a large inheritance to children who are not ready for it may lead to substandard results. You should be informed about estate planning to find solutions best suited to your needs.