How Much Should I Leave My Kids?

Many pre-retirees and retirees ask their financial planner: 

How much money should I plan to leave my kids when I pass away?

The truth is that there is no right answer to this question, and coming up with a unique estate plan for you and your spouse or partner may take time.

Some feel that they should have assets to “leave” to their loved ones, while others relish the opportunity to gift while they are still around to see their estate helping their kids and grandkids to buy that house, pay off their student loans, or provide for their own families.  It’s also important that you cover your own needs before setting aside for your heirs.

The Emotional Side of Estate Planning

No two people are exactly alike - which means no estate plan is alike, either. Deciding how you want your wealth to be distributed after you pass away is an emotional process. Nobody likes to confront their own mortality, and even if you’re comfortable with the idea of passing away, determining what type of legacy you want to leave behind is equally emotional. 

When deciding what you want to leave your kids, remember to take the big picture into account. You might want to consider:

  • What non-cash items you want to leave your kids in your will
  • Whether you plan to distribute your wealth evenly among each of your children, or if you have a specific strategy for dividing your inheritance
  • If you have charities or organizations that you’d like to support in your estate plan

Think About Your Legacy 

Leaving a legacy is about so much more than giving your wealth away. Your legacy can be anything you want to be - it’s your chance to make an impact on the world, even after you pass away. Truth be told, your legacy is already being built right now. 

How you interact with your kids, grandkids, and loved ones, the good work you’ve done in your life and career - all of these things work toward building your legacy. Your estate plan is the last piece of the puzzle. So, give yourself room and time to think about it. Remember - there are no wrong answers! Your legacy can be anything you want it to be.

Talk to Loved Ones

Once you have an idea of how you’d like to build your estate plan, it’s worth discussing your plans with your kids. Whether you plan to leave them the entirety of your estate, or you have a variety of wishes you want to have carried out, it’s helpful to make sure everyone knows what to expect. The last thing you want is for your kids or loved ones to be surprised by what’s in your estate plan. Plus, by telling them ahead of time, you’re helping to ensure that they’ll be committed to help carrying out your wishes - because they already knew what they were!

Build a Financial Team

After you’ve decided how you’d like your wealth to be distributed as part of your estate plan, it’s time to assemble your financial team. A fee-only financial planner, an estate planning attorney, and a tax professional can help you to build a plan that helps you distribute your wealth after you pass away - while still making sure that you’re protected (and enjoying life!) as a retiree. 

Ready to learn more? Contact us today

Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs, and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.

"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.

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