If you ask most people, they would prefer that none of their hard-earned assets end up wasted on taxes or professional fees, or simply squandered, when they are passing them on to the next generation. Unfortunately, however, these things often happen, especially as estates get bigger – and we’re often worth more dead than alive, so estates are always getting bigger. Here are some ways to help prepare your heirs to inherit:
- Share assets during your lifetime. Gifting money to your children now allows you to see it enjoyed. It also allows you to see whether they will spend it wisely.
- Set up a trust. While there can be some tax consequences to trusts, they can also have a lot of benefits if set up for the right reason and in the right way. Always speak to your accountant, financial planner and lawyer before making the final decision, but where they make sense, they can allow you to save significant time and money transferring assets on your death, and can protect those assets from your heirs’ ex-spouses and creditors.
- Teach them about money. It’s never too late – or too early – to start learning. My two-year-old plays with his cash register and is learning about how many “coins” it takes to buy “milk” but we will be teaching him with real money before too long. Even if your children are adults, if you’re concerned about their ability to handle money, you can always still teach them. This also applies to grandchildren.
Estate planning is not a set-it-and-forget-it situation. Ensuring your assets don’t disappear the moment you die can require a bit of work, but it’s worth it.