A common conversation I hear when talking to clients in retirement is, “The kids will get it one day”. It's often followed by a laugh or a sarcastic comment such as “That is if I can’t spend it all before I go”. This often comes from fear of how your money will be spent - but there are ways to help get you and your children on the same page when it comes to your legacy.
An interesting conversation I have held with some clients recently is in relation to how the funds will be handed over to “the kids”. Quite often “the kids” are adults with family of their own, working in well paid jobs and reasonably well-established in their own right.
The two most common concerns raised by retirees when I have held this discussion are:
Concerns the children will receive potentially large amounts of money, and they have no investment experience, and/or,
Concerns they will just waste the money on material objects such as new cars and holidays.
These are all reasonable concerns to be held and regardless of the sum of money passing through an estate and onto children and other recipients, typically this money has been hard earned.
Someone has worked hard to earn that money and whilst they may not have had enough time to spend it all, they are passing it on to future generations to enjoy the legacy they have created. It’s more than reasonable to care about what happens to the money after it has passed to the new custodians.
Whilst there are limited ways to control how the ‘kids’ spend the money, it is possible that whilst you are still alive you can engage with the recipients of these funds, and start a conversation to better prepare them for when the time does come. This doesn’t mean that you have to inform the recipient of what they are due to receive, rather it is bringing them to the table to help educate them, and help them understand your views and for you to better understand how they view certain matters.
We know these conversations can be tricky and sometimes a little awkward, but we can facilitate meetings and help you build connections to help ensure that “the kids” are provided some financial education today – giving you comfort that your estate will be being passed to recipients who will value your legacy.
There is no one correct way to facilitate this - and whilst we have various tools to help facilitate this process - it ultimately comes down to each family’s individual circumstances and how best to accommodate your needs via a tailored approach.
If this is of concern to you, feel free to contact me to discuss your concerns and how we may be able to assist you.
If you have any questions, please contact the Propel Financial Advice team