BOSTON (CBS) – The Over the Hill Gang has a mission statement encouraging all members to do some estate planning for the inevitable. Nobody wants to talk about the inevitable, death, but no one gets out of this world alive. Everyone wants to go to Heaven but nobody wants to die.
Estate planning is an important part of your overall financial plan. How do you want your assets, your belongings, distributed when you die? And who should get them? If you have accumulated a large amount of assets what do you do with them?
Should you leave everything to your kids when you die? Maybe. Bill Gates isn’t planning to do that and Warren Buffet agreed to giving most of his assets away. Sam Walton of Walmart stores also choose not to leave all of his millions to the kids. Many parents of adult children have legitimate concerns about what the money could do to the kids.
You may want to give away some of your estate while you are alive so you can enjoy seeing the results of your gifts.
But only give away what you don’t need. I have seen situations where the kids think mom is loaded after dad dies. Little do they know that dad’s pension died with him, and now there is only one Social Security check coming in.
Be honest with your kids about what you have and where you want it to go. Also be equitable in giving it away, unless one of the kids really is a pain in the butt and does not deserve anything. You don’t want your kids fighting over money after you are gone.
Some experts advise when splitting your assets among your children, consider a child that is doing very well may not need as much as a child who is not. Don’t do that! Dole it out equally. The child that did well often worked very hard for that success and should not be penalized for succeeding.
One more thing:
Concerns of parents with adult children:
- Money does not buy happiness. (I always thought that it eased the pain though.)
- You can’t pass along values and work ethics with the money.
- How much money do the heirs need to succeed?
- What will a lot of money do to them?
- How do you protect the assets if there is a divorce?