If you worked hard to give your family opportunities you never had, it is satisfying to think you have achieved your goal. You can sit back, knowing that your children will not have to go through the same struggles you did. They will never have to wonder where the next meal is coming from or wear clothes handed down from their cousins. Yet, when making your estate plan, it might be possible to make things too easy for your children.
Many wealthy people choose not to leave their children everything
Would you be the same person if you had not had to fight to overcome difficulties? Would you have been as successful in business if you were not motivated to escape your situation? Many high earners decide that leaving too much money to their children will harm them. Food writer Nigella Lawson said, “I am determined that my children will have no financial security. It ruins people not having to earn money.”
There are ways to protect your children from their inheritance
Most high earners prefer to give their children some security, even if they choose to avoid leaving excessive amounts. Receiving a large sum of money at one time can open people to a world of temptations. Creating a trust is one way to protect your children. You can specify the rules of the trust. Perhaps your children will not inherit until they reach an age where they have the wisdom to manage the money, or maybe you will provide a yearly allowance to avoid them spending it all at once.
Successful estate planning is not just about reducing taxes. It is about doing what is best for your family, even if that means not leaving them your whole estate.
