Preparing Your Family To Inherit Your Wealth

Preparing Your Family To Inherit Your Wealth

If you’re a millennial, the topic of inheritance may not be something that comes up in everyday conversations. However, it’s an essential part of life and wealth management—especially since so many millennials are now entering their prime earning years with families to consider. Preparing your family for eventual wealth transfer can help ensure that future generations understand how to handle their inherited assets. 

People who inherit money or property can feel overwhelmed if they haven’t been given enough information about how to manage it. With adequate preparation, however, you can provide clarity and confidence to your loved ones for when the time comes. That’s why this post is all about the steps you should take to ensure that your wealth is accounted for and passed along according to your wishes.

This article explains the following:

  • How to discuss your estate plan with your family
  • Let them know what you expect them to do with the inheritance
  • Build charitable giving into a generational family legacy
  • Keep communication open & honest to avoid later surprises 

How To Discuss Your Estate Plan With Your Family

We understand. Preparing your legacy can be a difficult conversation to have with your family, regardless of how close you are. It may even feel intimidating to talk about the fate of your assets after you’re gone. Nevertheless, having an estate plan is essential for managing your wealth and ensuring that it passes on according to your wishes. 

An important part of ensuring that your legacy can be managed properly by your family is verifying that they know where all your important documents are stored. By taking the time to create an organized system, you can set your loved ones on an easier path for difficult times. So, make sure that everything is labeled and in one place for easy access. 

This includes names and contact information for any advisors or professionals who may be managing parts of your estate. Provide instructions about how to find digital copies of documents such as bank records and title deeds, as well. This can also help to facilitate a degree of peace of mind for your survivors.

Teaching your children about money is another crucial part of estate planning, as it sets the foundation for wiser financial decisions in the future. Providing them with the knowledge to properly save their money and grow it can later prove invaluable throughout their lives. This can also give them an advantage for creating future investment strategies, and managing and growing their wealth over time. 

Let Them Know What You Expect Them To Do With the Inheritance

It’s important to make sure that your wishes are clearly laid out in case of any disputes among family members (or should the unthinkable happen before you can formally document them). Making sure that everyone understands exactly what you want potentially allows everyone involved to make informed decisions that align with your wishes. 

Hopefully, it cuts down on potential family disagreements, as well. Having a conversation today can also allow you to explain why certain decisions were made and how they should benefit everyone involved when the time comes. Leaving clarity as part of your legacy can sometimes help possible hard feelings. 

There are many options when it comes to inheritance, from gifting to trusts and more. Your specific circumstances will determine the best plan for you and your family. No matter the size of the inheritance you leave, clear communication with those involved is essential. Talk it through with those who stand to receive your assets while you can. Don’t leave any aspect of your legacy to chance.

Are You Ready for April? We’ve Created a Tax Planning Worksheet To Help You, Just in Case.

Build Charitable Giving Into a Generational Family Legacy

Philanthropy is an impactful way to leave your mark on the world. Engaging generations of your family in charitable giving can create a unique bond that helps to instill values to be passed down for generations. At the same time, it may also facilitate the reinforcement of positive values. 

As much as we sometimes try, it’s impossible to teach our kids everything they need to know about life by ourselves. Things like empathy and compassion for others, responsibility, and understanding the importance of our actions aren’t always to articulate. Nevertheless, engaging them in meaningful activities such as charitable giving can facilitate real-world experiences to help instill core values to outlast our physical presence. 

It can also reveal how their efforts can make an impact on the world around them. No amount of money or material possessions could ever match the long-term worth of this invaluable insight. The benefits don’t stop here, either: Involving multiple generations in your philanthropy can also bring family members closer together by creating meaningful bonds between you. 

Donations coupled with activities such as volunteering at local charities close to your heart can be great opportunities for multigenerational bonding—while doing meaningful work that will have a lasting impact on the community. This kind of shared experience can strengthen relationships as well as creating memories that last a lifetime.

Meanwhile, charitable giving can also provide families with the opportunity to support causes that matter most by investing in initiatives that everyone agrees upon and stands behind. It’s also an effective way to keep track of what you’ve done over time. Future generations can be left with something tangible that they can look back on fondly when reflecting on their family’s shared accomplishments.

Keep Communication Open & Honest To Avoid Later Surprises

When you create an estate plan, it’s important to involve all family members who will be impacted by it. This means talking with any beneficiaries, executors, trustees, guardians, and attorneys who may be involved in the process, as well. Addressing their roles in the plan now should help ensure that there are no surprises down the road.

Establishing realistic expectations among your family members is a key element. It may not be possible for everyone to agree on every aspect of your plan. Regardless, everyone needs to understand each other’s views and opinions before working together toward common goals. Making sure everyone has a clear understanding of their roles in the estate plan can better prepare them for what lies ahead.

At some point, you need to discuss the specifics of your wishes with family members who will be impacted by your estate plan. Go over, for example, any specific instructions regarding how you want the funds from your estate distributed among beneficiaries. This helps ensure that your wishes are respected after you are gone. 

Humanity Wealth Advisors is an independent financial planner for high-net-worth individuals in the San Francisco area. We routinely handle millennial wealth investment, estate planning, and more. It’s all a part of providing financial planning in the Bay Area of the United States and helping increase financial literacy for millennials. 

Contact us to learn more about Bay Area retirement planning toward your financial goals, as well.

Humanity Wealth Advisors and LPL Financial do not provide legal advice or tax services.  Please consult your legal advisor or tax advisor regarding your specific situation.

More about the author: Harry Sherdil

As a fiduciary financial advisor at an independent firm, Harry strives to offer the same resources, tools, and research as bigger firms while serving new and existing clients' best interests.