According to The Barefoot Investor, if you have a child who expects an inheritance when you’re no longer around but is not deserving of such then you should take the necessary steps to ensure it doesn’t happen.
The advice was in response to a question published in the Herald Sun.
The mature businesswoman had built her empire up from scratch and acknowledged that things were “conservatively valued at $7 million”. She went on to say that her daughter wants all her money and will contest the will if things don’t go her way.
Regardless of the situation of your finances, it’s not uncommon for parents to want to protect their legacy from children who are — in their opinion — nothing but spoilt.
According to Barefoot, it’s quite common for adult children to “put their lives on hold” waiting for the inheritance they believe they are entitled to.
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It can be a difficult thing to decide how (and if) you want to leave a legacy to your children, but there are some simple ways for you to go about it.
Using the Rockefellers as an example, if you choose to leave your children a legacy you might want to consider a trust to protect any family wealth you have. Any monies inside that trust is managed by a group of experts working together on the same goal. You get to set the rules and roles for deciding how your legacy is passed on to your children.
To use Barefoot’s advice, you could also consider picking a cause you and/or your family believes in strongly and leaving any financial assets to that charity.
Here are some other ways to ensure your children earn their legacy (and don’t squander it when they receive it):
- Teach your children values. If you have earned a lot of money, talk to them about how that money was earned, the effort — and sacrifices — you had to make to build your wealth. Lead by example and instill the value of hard work in them.
- Plan your estate — with a professional, of course — so that your children don’t receive the bulk of the inheritance immediately, but rather once they have reached a certain age, or when they have established themselves first.
- Discuss strategies with a professional so that you can avoid your children becoming spoilt when they receive your legacy. That includes actions such as a trust as mentioned above, or could involve providing funds for specific needs, such as buying a first home or setting up a business.
“If you really want to help your family find happiness, teach them the power of generosity,” Barefoot says.
Have you considered how your legacy will be received by your family? Do you have concerns about an expected entitlement from your children or other family members? Share your thoughts with us.