You spend a lifetime earning, investing, and accumulating valuable property and assets. You have always planned to pass your estate down to your children as their inheritance. After all, you didn’t gain all of this stuff just to take it to the grave with you. But what if inheriting your estate is the wrong thing for your kids? Or if over time you’ve come to the conclusion that it’s not right for you to leave your inheritance to them. Here are three big reasons why you might not want to leave your estate to your kids:
1. You Want To Contribute To Your Community
Perhaps your adult children already have enough money. Maybe they’ve earned it on their own. Or perhaps you’ve given them enough to leave them on stable ground. The rest would just be extra for them. Of course, it’s nice for everyone to have a little extra. But you might find that you want your estate to do better work in the world.
Are there specific causes that you care about and want to contribute to when you’re gone? Perhaps you would like to create a scholarship in your own name? Or donate a percentage of money to research? Whatever your passion is, you may find that giving your estate to that feels better to you than simply leaving it to your children.
2. You Have Multiple Children with Differing Needs
There are so many reasons why you might wish for one child to inherit more than another child. Therefore, you might think about how to leave all or a majority of your inheritance to only one child. Or you might have reasons you want to disinherit a particular child. You can legally do any of those things. However, doing so can further strain what might already be difficult relationships in the family.
During your lifetime, this could strain your relationship with your children if they know about the inheritance plans. Both before and after your death, this could strain the relationships that the siblings have with one another. Therefore, if family dynamics are too complex, you might want to consider leaving your estate to someone else entirely.
3. A Legacy Trust Is A Better Solution
Perhaps you do want your children to have access to your money. However, for a variety of reasons, you don’t want to give them an inheritance outright. Just a few of the reasons might include:
- You don’t trust your children to properly manage the money
- Potential divorce in the family could mean your money goes to an ex child-in-law in the future
- Future bankruptcy or lawsuits could take that money away from your adult child
If you want to protect the finances – and your children – then you might consider an alternative method of leaving your inheritance to them. A Legacy Trust is a popular alternative to direct inheritance. The trust owns the estate after you pass. Therefore, if your child eventually encounters bankruptcy, lawsuit, divorce, etc. then the money still has protections for them. Thus, if you want your child to have access to your inheritance but not to have complete control over it, then the Legacy Trust can be a good option.
- What to Do if Your Spouse Dies Without a Will
- Here’s What Estate Taxes in Georgia Look Like
- 3 Simple Steps to Follow When Planning Your Estate
If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.