We recommend a conversation with the children and grandchildren about the meaning of the money. You may or may not disclose the entirety of the size of their future inheritance. Some patriarchs and matriarchs feel this may ruin their kids and grandkids. The important discussion to have is what money means to you, and what you hope that it means for them.
To ensure a financial legacy, you want to prepare your inheritors for the windfall. Some people do this through legal structures, including trusts and family partnerships. These methods can be legally strong and may even provide tax advantages.
Still, they will not prevent fighting between the kids and grandkids. They certainly do not assure that the financial legacy translates into a healthy relationship with money. And this, of course, is much more powerful than any legal structure could be.
If you could only have one result or the other, which of these two would you prefer?
A legal structure that protected your financial assets from spendthrift inheritors, their potential spouses, thorny law suits, and also minimized taxes? Or….
Inheritors with healthy money relationships who were able to leverage the financial assets and build professional achievements and personal relationships in alignment with their values and their goals?
For many of us, we’d rather teach a person how to fish than to just give them a fish. For many of us, the soft-side of ensuring a financial legacy is more important, and also more elusive, than the legal structuring side.
See further: Windfall or Inheritance Planning
Here are some questions to ask as you work towards ensuring a financial legacy:
Who will inherit?
What do you love about them?
What do you want them to cultivate?
What do you want them to remember about you and your money story?
What are some of your biggest financial mistakes?
What are some of your best financial decisions?
Now that you have wisdom, if you could do anything with this amount of inheritance, when you were their age, what would you do?
How do you want to be remembered?