One thing that wealthy parents routinely worry about when giving their children a large inheritance, is whether it will stifle any motivation to go out and earn their own fortunes. The children might stop working upon receiving an inheritance, and waste it to pay for an extravagant lifestyle.
The fear is not completely unjustified. That is sometimes exactly what happens. However, there are many other times, when nothing like that occurs. Recently, Warren Buffett took to the stage and offered some advice about how to prepare heirs, so that it will not happen, as Forbes reports in "Warren Buffett's Advice On How To Raise Well-Adjusted Heirs."
Buffett's advice includes
- Do not try to use the terms of a trust to force children into certain careers. Let them do what they want for work and they will be more likely to stay at it, after receiving an inheritance.
- Tell heirs about the details of your will to make sure they understand their responsibilities and to talk about whether they think it is fair. Do not surprise them with your estate plan, after you pass away.
- If you have more than one child, do not force your children to give to charity as a group. Letting them all choose charities for themselves helps them to get along better.
- You can give your children too big of an inheritance. Ideally, they should be given an inheritance that is large enough to do anything, but not so large they can do nothing.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference: Forbes (June 1, 2018) "Warren Buffett's Advice On How To Raise Well-Adjusted Heirs."