Tips when Leaving an Inheritance
This week we’ve talked a lot about how to use your inheritance, as well as how not to use it. But what if you’re the one that’s giving, and not receiving? When that’s the case, there are still a few things you have to keep in mind. Here are some tips on how to leave an inheritance, and not be worried about how it’s being spent or who it’s going to.
Leave it in trust when leaving to minors
You want to believe the best of your family, but let’s face it. If you leave that large sum of money to a 16-year-old, there’s a very good chance that their inheritance will be spent on movies with friends and video games. No, that’s not the case for everyone, but the chances of it happening are much greater than if you left it to a 25-year-old, or even a 21-year-old. For that reason, leave any inheritances to a person 18 years or younger in a trust. You can never be sure it will be spent on wise things, no matter the age, but this will ensure that the money you leave will go to good use.
Talk to them about it before you go
No matter the age of the person receiving the inheritance, you’ll want to talk to those who will receive the inheritance before it’s actually left to them. Remember to do this in a respectful way, talking about how important philanthropy is and perhaps what charities you’re already donating to. Also talk to them about any inheritances you may have received in the past, and what you’ve done with the money. Don’t be lecturing during this conversation, simply talk to them in a gentle way about what they’re going to do with the money.
Don’t put conditions on the money
While you do want to talk to them about the money beforehand, and maybe even put it in a trust, you simply cannot attach strings to the money that will be given. You don’t know what their situation will be like when you pass away, and it will only cause resentment – something you never want from your family members, and something that is simply not reasonable.
Don’t ever leave money to “the grandkids.” While you may know what this means, an estate attorney won’t. Be sure to be very specific about which grandchildren you want to receive some of the money, and how much you want each of them to receive. You can divide it up however you choose, but be sure to express it clearly in your will.
Leaving family members an inheritance is an extremely generous thing to do. Just be sure that you know how to give it properly, so that those you intended to receive it do, and that they at least have some guidance as to how to spend it.