Sometimes I Feel Like a Piece of Bologna

Thursday, May 10, 2007

Passing family values with inheritance

James Carter writes at BeaconNewsOnline that families need to consider passing on their family values as wells as finances. He says that while many families view leaving an inheritance as a final act of love passed from one generation to the next, a recent study shows only one-tenth of all families are able to pass an inheritance on to a third generation. That’s a sobering statistic.

He suggests that it’s important to not only pass on your assets to family members, but also to pass on the values, knowledge, and tools your children and grandchildren will need to responsibly manage an inheritance. This calls for communication established early and repeated regularly in whatever manner is most comfortable for your family—formal or informal. That gives the next generation the time and luxury to learn and think about what the money means to them and how they plan to use it.

He also suggests making sure that your estate plan is up to date. As your family grows over the years and tax and other laws that affect your estate plan change, it’s important to work with your legal and financial advisors to keep all of your plans and paperwork current.

He recommends that If your own health and living expenses are taken care of, consider helping your family now. This is an especially wise move if your money will be subject to estate taxes—generally over $2 million.

We’ve worked hard to do this with our son and now with our DIL. We want them to understand how we’ve managed our finances, especially including the values that have driven our decisions. And we want them to understand the charitable decisions we make, both now and later. As they grow up and gain more financial experience, they’ll be equipped to manage whatever we are able to leave them, or even what we can share with them now. Makes more sense to me than hoping they figure it out after we’re gone!

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