What Should I Leave My Children?
Estate Planning as a process has two distinct phases. A good estate plan can provide a ‘roadmap’ of an individual’s (or family) current needs, requirements, and asset allocations.
Estate planning can also help to answer a parent’s question – How much inheritance will I be able to leave to my child(ren) and what is the best way to do that?
Before deciding on the amount of an inheritance – “How much to leave” – an individual would be wise to consider their own future requirements.
The process should include:
- Planning to be able to continue a comfortable lifestyle beyond retirement;
- Planning not to become financially dependent on their children in the future;
- Considering the types of assets e.g. trust funds, property, stocks, mutual funds, insurance policies – since each of these have very different tax implications for the recipient;
- Planning in the event of economic downturn or reversal of investment proceeds;
- Considering escalating healthcare costs;
- Considering life events such as remarriage/divorce (your own and your heirs)
- Strategizing how NOT to outlive your retirement income
- Planning in the event of the death of a spouse
Only by careful consideration of what your own (and your spouse) future needs might be, can you decide what portion of your estate can safely be allocated as an inheritance.
The estate planning process is a valuable tool and the choice of methods by which a parent can provide an inheritance is wide ranging.
An experienced attorney in the area of estate planning will be able to devise a suitable ‘roadmap’ to follow.
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