Leaving inheritances for children and grandchildren is a primary estate planning objective for many Vancouver parents.
If an inheritance is part of your estate plan, preparing recipients can be crucial in preserving your legacy.
Why should I prepare recipients?
Receiving a large sum of money or valuable property is exciting, but it can also come with the challenges of managing it. If your kids are young or inexperienced with money, there may be a risk of mismanagement and preventable financial losses. Alerting them can help everyone feel more confident.
It can also allow recipients to complete their own financial planning. When people know they will or won’t receive specific money or property, they can make decisions accordingly.
For instance, inheritance details can affect the way people make decisions in light of:
- Getting married
- Getting divorced
- Wanting to buy or start a business
- Creating or revising their own estate plan
Further, discussing an inheritance with recipients can ensure your wishes are carried out properly by informing loved ones of your intentions.
How to prepare recipients
Discussions about inheritance planning can be awkward, but there are approaches to make it easier.
Having the initial conversations in a quiet, comfortable place can help everyone feel at ease. You can explain your planning goals in as much detail as you wish and at an age-appropriate level. It can also be crucial to give your loved ones time to ask questions or explain any hesitations they may have.
If you are too uncomfortable or overwhelmed to run these conversations yourself, you can invite an advisor to help.
Another way to prepare loved ones is to help them improve their financial literacy and confidence. As this article suggests, some ways to do this include:
- Encouraging them to get hands-on financial experience
- Explaining your economic values and habits
- Starting to teach key financial concepts when they are kids
These efforts can help people anticipate the challenges of managing money and appreciate the spirit behind the inheritance.
Making the most of your legacy
The money and assets you leave behind can have a profound impact on others. Providing them with these tools and information can empower them to maximize this financial gift and avoid common financial missteps that could jeopardize your legacy.