Losing a parent is challenging enough, don’t compound grief with anxiety over what to do next.
COMMUNICATE WITH YOUR KIDS
If your children know ahead of time what their inheritance will look like, this takes the air out of the greed, sibling rivalry, and entitlement problems that often arise after mom and dad have headed to Heaven.
STRUCTURE THEIR INHERITANCE OVER TIME
“An inheritance gained hastily, in the beginning, will not be blessed in the end.” (Proverbs 20:21). You can spoil children at any age, and you didn’t leave an inheritance to see it squandered. Consider structuring the distributions over time and asset protection options, especially with your retirement, which gets an income tax regardless of who receives it.
REMEMBER YOUR LEGACY
Children, grown-up or otherwise, are most influenced in life by their parents. Demonstrate faithful living through giving to ministry and including a testimony in your will as your “final act of parenting.”
MINIMIZE COSTS AND INCREASE EFFICIENCY
A revocable living trust saves your family thousands by avoiding probate and significantly reduces the time to wrap up your financial affairs. But you also need to coordinate your beneficiary designations on retirement assets (e.g., IRA, 401k) and life insurance with the distribution plan in your trust to ensure your loved ones receive the structured inheritance you have planned out for them.
AVOID THE DOCTRINE OF UNINTENDED CONSEQUENCES
Many families want a simple equal division of assets and put the child who lives nearby in charge of administering all their affairs. Two problems arise. One: 85% of outright distributions of inherited assets are completely gone in 18 months. Two: the debate over who owns an item you would sell for $20 at a garage sale has destroyed family relationships. Ask yourself a few questions about your children, assessing their current relationships and status:
LET THE PROFESSIONALS HANDLE DISTRIBUTION
Is there a powder keg sitting there that could go off with a few careless words spoken at a funeral or a reception?
While the tasks are simple, the dynamics are not. Parents value the relationship between their kids much higher than any economic benefit they may leave to them. Consider taking the discretionary tasks of trust or probate administration out of their hands and leave it to a professional.