When thinking about what you can leave your children, you might wish you had more to give. Yet, a recent article found that one in ten wealthy families spend the family fortune within one generation. It found nine in 10 had nothing left by the second generation. It shows that however much you leave behind if you want it to last, you need to ensure your family knows how to look after money.
Trusts can protect assets for your family
When you place money in a trust, you dictate how your family can access it. You could put money into a trust to ensure your child or grandchild can continue their education. Or you could set it up, so it only pays out once they reach an age you consider they are mature enough to handle money.
Teach your children about money to help them use their inheritance
If money has always been tight, your children should appreciate its value. They will have seen the extra hours of work you put in before their birthday or to afford a vacation. Children from more wealthy families may be less aware.
Help your children set money aside from a young age to plan for their future
Estate planning for a comfortable retirement can seem like a pipe dream when you do not have cash to spare. If you teach your children to set a little aside any time they receive money, it can build good habits.
Teach your children the cost of borrowing money
Debt is a massive problem for most Americans. Once you are in debt, it becomes even harder to get out. If you can help your child avoid unnecessary borrowing, it helps ensure the money you leave them will not be wasted paying interest.
It would be great if we could all leave our children enough money to ease their life a little. Yet, more important than that is to give them sound financial education. If they are turning 18 consider helping them create their first estate plan. It is an important step for any adult.