There is a common misconception surrounding leaving assets to heirs, that once you pass they will receive it immediately. This is simply not true as detailed in article from Kiplinger, “How to Help Your Children Financially Now without Giving Them Any Money”.
Much like the typical idea in Hollywood that trusts for “rich kids” are not accessible until a future birthdate of 21 or 25, you can postpone when your heirs receive assets from your estate. If you would like your children to earn their living without your assistance, but you want them to have a comfortable retirement, you can choose to set it up so that they don’t receive their inheritance until they are 65. Just as parents contribute to education savings for children, you can also contribute to retirement savings.
While you don’t need to tell your children what they will be inheriting, you can inform them that you will be giving them money for their retirement. They of course should be working on a retirement plan and saving for it well in advance, but it can give them some peace of mind that they will have an extra cushion when they reach that age. Retirement expenses are larger than most anticipate and they are only going to increase as the years go by.
You will want to have family meetings so you can keep your children up to date on how aggressively they should be saving for retirement based on how much of your assets you are using. Informing your children that you are going to be giving them some support in their retirement can help take stress off of them, and in the future will allow them the flexibility to do more in their retirement or spoil their grandkids, your great great grandchildren! Talk about a lasting legacy, one of support.
Of course, you can go more typical routes of inheritance plans, but if it is important for you to ensure your children are working hard in their employment years and you would rather ensure their retirement ones are more cushioned, you can make that provision.
To facilitate the kind of discussion your family should have surrounding your estate and the way inheritances will work, we encourage our clients to partake in a Family Care MeetingTM where we get you, your heirs, and other advisors in your network together to answer questions and ensure that your wishes will be carried out.
To learn more about this and other estate planning strategies, visit our website today to schedule your consultation!
Reference: Kiplinger (July 28, 2016), “How to Help Your Children Financially Now Without Giving Them Any Money”