There are many philosophies on what to do with an Estate. Some people “spend it all” while others “save it all” for the kids. If you plan to leave something for your children, will it help them? Will it hurt them? Will they spend it all, lose it in a divorce or bankruptcy? Do they really even need it or would a token amount do? It isn’t easy to know what will happen with anything that you leave your children unless you tie it all up and control your estate “from the grave,” which can be frustrating and expensive for those left behind.
I am not saying that you shouldn’t leave your children anything. I am suggesting that you have a serious conversation about how your beneficiaries will handle whatever it is that you would like to leave them. Many children don’t even expect an inheritance or much of one. It is helpful in some cases to “give them a leg up” but to what end? How long will the inheritance last? Will it have a meaningful impact on their lives or simply be a blip that is spent on a trip to Vegas or Disneyland?
If what you are leaving won’t materially affect their lives in a meaningful way or in a way that your beneficiaries are able to take care of responsibly, it might be wise to leave them a token amount and spend some of that money on making memories with them now. Take a trip with your family or invest in an item or adventure that will be remembered long after you are gone.
Another possibility is simply giving some of your Estate, either now or later, to some sort of charitable vehicle where your family legacy can live on long past you and your children’s lives. Some of these funds can even be set up so that your family can decide to whom and when disbursements are made each year – a great opportunity for a family get-together and to do good year after year for decades and even generations to come. Surprisingly for most, these funds can require relatively little to get started and there are organizations that will take care of the tax and reporting requirements so all your family needs to do is focus on the joy of giving. Leaving a lesson about the importance of giving is a wonderful inheritance as well.
Whether you use a fund or not, consider looking around to see what organizations or other interests you might want to support. Do some due diligence to make sure they are run well. In many cases, these entities will be around long after you and you can help them continue to give to our communities.
If you decide to leave something to your children, a fund or another charitable organization, please ensure that your estate plan clearly outlines who, how much and when or how the disbursements are to be made. Giving is a wonderful endeavor and clarity about your intentions will help ensure that your gift is taken care of and appreciated.
Written by ELTC Law Group
