Do You Want to Pass Wealth on to Your Kids? Here’s How!

Pass wealth down properly

Seniors often make this mistake: the leave preparations to the very last minute, especially if they’re suddenly experiencing medical difficulties. That’s why you should make sure that all your eggs are in order way ahead of time.

Start on all your paperwork early such as writing a will, creating an estate plan, buying life insurance, naming beneficiaries for your accounts, setting up custodial accounts, AKA investment accounts children gain access to when they turn 18 or 21.

If all of these are in order and set up ahead of time, passing down your wealth will be easier on your family. On top of all the paperwork, make sure you talk to your family about how to best maintain the wealth you have accumulated. Some people may not know how to take advantage of such opportunities, so the more they know ahead of time, the better.

Focus on financial literacy

Continuing in the same vein, you want to ensure not only that you’ll have something to leave behind for your loved ones but that they, in turn, can use your wealth responsibly. Studies have shown that while half of inherited money is lost through poor investment choices, the other half is spent.

It is vital that you encourage your family to learn how to handle finances. If need be, encourage them to take a college course, read top finance books, or take LinkedIn Learning classes.

There are also a ton of finance apps that can help them out, such as Cleo, which has a virtual financial assistant that can help with financial literacy games or quizzes. But it also has much-needed functions like learning how to manage and create a budget.

All of this is to say that if you want to ensure that your family will handle the wealth you leave behind, you may need to nudge them in the right direction!

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