Thomas Heath’s Washington Post column on how the ultra-rich talk to their kids about money may not give you a detailed plan for discussing finance with your children but it does give you some food for thought on estate planning. If you assumed that all wealthy people like talking about money because they have plenty of it, think again.
“Wealthy people on both sides of the equation — the wealth creators and the heirs — often consider it gauche to even discuss money. Some are embarrassed by it.”
One owner of a family business has each of this children talk with the family estate attorney when they reach the age of eighteen. And this talk is between the attorney and the eighteen-year-old while Dad sits out in the lobby. The talk at eighteen is preparation for turning 21, which the business owner considers the beginning of adulthood. He thinks a responsible adult will have a will and an estate plan.
Other business owners interviewed talked about establishing trusts and their philosophies on how a trust should be administered. Setting up a trust that allows access to money at different ages is one way to see to it that a child does not go through a huge amount of money with youthful exuberance.
There is also the stance taken by some very well known millionaires and billionaires: leave your children no money or a very small inheritance so can appreciate the value of hard work. One of the most famous wealthy Americans to do this was Andrew Carnegie; he said it would be ‘a disgrace to die a rich man.’
Whether you want to give your wealth away or pass it all down to your heirs, you will need a plan to distribute your resources because you cannot leave it up to chance and the courts. And this is where a Fee-Only financial planner can help. It is up to you to decide to do some estate planning before talking to your heirs or to do it in consultation with them. Either way, a Fee-Only financial planner can help you get started so you can design an estate plan that will meet your financial goals.