How Do I Plan for My Adult Children?Share this post
Important Parts of Estate Planning
What Things Should I Consider as I Plan for My Adult Children?
Like every other part of your plan, you should start by determining your children’s needs and your specific goals for their future.” Fair is not always equal and equal is not always fair,” is a common estate planning quote. You probably have a desire to be fair with your children, but you also recognize that children are unique in their personality, their needs, how they handle money, their marital situation, etc. Therefore, while treating each child fairly, you may decide you also need to treat them differently.
In your estate plan you have the freedom to do what you believe is right, based on your understanding of the individual uniqueness of each child. One may need protection from creditors. Another may have a drug or alcohol problem. Another may have won the lottery, and therefore has little need for an inheritance. One may be married to someone you don’t particularly trust.
The beauty of estate planning is that you can customize your plan to fit each individual set of circumstances.
Estate plan with my adult children in mind
Before creating an estate plan, people should examine their net worth and predict how much it is likely to increase or decrease in the years ahead. They should also consider whether there will be taxes associated with the estate, whether they will donate to charity and how their children will be affected by their inheritance.
How adult children will be impacted by their inheritance depends on two factors: their temperament and their own financial situation relative to the size of the inheritance. Different people handle a sudden influx of money differently, and it may be necessary to adjust the inheritance with this in mind. If an adult child is likely to be irresponsible with an inheritance, creating a restrictive trust that allows another party to manage the money is one option, but it may not be the right one for all families.