Passing an Inheritance to Your Children: 4 Factors To Consider
Parents often want to ensure their children’s future is secure by leaving them an inheritance. A survey from Ameriprise Financial found that 77 percent of parents intend to leave their children or grandchildren an estate. However, only 50 percent have made put plans in place to do so.
Passing an inheritance requires considerable planning. You’ll need to prepare your estate in advance so that your children can receive their inheritance without any hiccups. Moreover, there are certain factors, like probate, you must consider before you begin estate planning. We usually recommend consulting a probate lawyer before you start your estate planning. In addition, hiring an estate law attorney to assist you with drafting your will and other essential documents is also an excellent idea.
Passing Inheritance to Your Children
Once it’s time to pass inheritance, you need to ensure you’ve considered all the factors carefully. Some factors you should assess before leaving an estate include:
We recommend creating open lines of communication to ensure you can manage your children’s expectations regarding their inheritance. While sharing information with your children is necessary, it doesn’t mean revealing everything about yourself to them. Estate planning remains a parent’s decision. However, you can try bringing them into the fold by letting them know where they stand financially. Moreover, communicate clearly that their inheritance may change if you need the money for unforeseen medical costs. Finally, let them know essential information like where you keep the vital documents, the terms of the inheritance, etc.
Level the Playing Field
If you want to avoid your children squabbling among themselves after you’re gone, you should divide assets equally. Moreover, also ensure that you split responsibilities for managing your affairs as equitably as possible. Leaving your children with unequal inheritance can often cause them to harbor resentment towards you and toward each other. One method of avoiding such problems is to level the playing field.
Explain Unequal Distribution
If you decide to divide your inheritance unequally, we recommend sitting your children down and explaining to them. Parents often leave unequal estate due to several reasons. For instance, one of your children may be a high-powered stockbroker working on Wall Street, while the other is a public-school teacher. Parents may leave a more substantial sum to the child with less money since they need it more. However, the likelihood that the other sibling understands the parent’s reasoning isn’t always apparent. Instead, your stockbroker child may harbor resentment because they might believe you care for your other child more. If you don’t wish to communicate with them, make sure to leave notes in your will explaining your decisions.
Use a Trust
If you’re unsure about whether your children can handle their inheritance, consider using a trust. Many estate planners recommend creating a trust that distributes the assets in chunks. For instance, your trust may pay a portion of your estate when your children turn 25, and they may not receive the next share until they turn 40. Many estate law attorneys recommend using this approach to avoid your children blowing through their inheritance by spending recklessly.
Seek Assistance Dividing Your Estate from a Legal Professional
If you’re considering leaving an inheritance for your children, we recommend seeking legal counsel immediately. If you’re seeking assistance with estate planning in NYC, we can assist you.
The law offices of Ledwidge and Associates help clients plan their estates in Manhattan, Queens, and Brooklyn. Our attorney Joseph Ledwidge personally tends to clients seeking legal advice regarding probate and estate law.
Contact us today to schedule a free phone consultation with us.
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