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3 TIPS TO PASS ON FINANCIAL WISDOM TO YOUR BENEFICIARIES

A recent study carried by Ohio University shows that an astonishing 33 percent of all beneficiaries in the US lose their entire inheritance within two years of receiving it. This is either because they don’t know how to properly manage their money, or they misuse their wealth on an unsustainable lifestyle, spelling trouble in future.

Therefore, it’s your (the benefactors) responsibility to share your financial wisdom with your children and grandchildren; through real-life stories, struggles and experiences that brought you to where you are, for a successful inheritance.

Here Are Three Tips To Help You Prepare The Next Generation For The Riches They Will Inherit:

  1. Use Estate Planning Tools and Set up Trusts
    Other than talking to your beneficiaries about your financial well being, you can also use certain types of trusts that will reward their smart behavior. Discretionary and incentive trusts are two such tools that can hold payments until beneficiaries complete college or withhold payments unless beneficiaries are proven to be responsible and sober. We can work with you to set up these types of trusts that emphasize on your values in life as well as your unique family goals.
  2. Teach Your Beneficiaries the Basics of Money Management
    Talk to your heirs about the efficient ways of using their inheritances. Guide them about compartmentalizing money, analyzing costs, setting priorities and evaluating financial outcomes. Moreover, share your knowledge about smart investing and saving for the future. By doing this, you truly enhance the meaning of your estate plan.
  3. Round up a Good Team
    Apart from putting practical supplements of your own wisdom into your estate plan, consider rounding up a smart team of investment managers, tax preparers, estate planners and trust lawyers. Bring them in as mentors for the next generation — especially for teens, who might not always see their parents (i.e. the benefactors in most cases) as the characters of all wisdom. A good team like this will ensure that proper financial literacy is passed to the next generation along with your wealth.

These tips will help your beneficiaries to build a legacy of wealth that will support them and the future generations for a lifetime.

Contact us to check whether your will or trust is up-to-date and has all the strategies to protect your family’s financial legacy.