A few years ago, I’d say one reason for saving so much money is to be able to provide an inheritance for our children later in life when their mother and I pass away. However, the more I think about it, the more I wonder if leaving an inheritance, or at least the promise of an inheritance, does more harm than good.
Ensuring our children are financially literate increases their chances of effectively managing an inheritance. However, I think there’s something to going out and making it on your own. The child that takes over the family business will never have the same appreciation as their parents, that had to build that business from the ground up. Likewise, the sacrifice and dedication that goes with building your wealth make you more connected to it.
I will have a conversation with each of our kids at some point. When we pass away, don’t expect a dime of inheritance. This all goes completely out the window if we die earlier in life. That’s a different story. It also gives us space to change our minds. The key for us is ensuring that our kids don’t expect anything.
For example, sending them to good schools as children and young adults, paying for their college, and providing money to start their lives. This may involve a down payment on a first home or seed money to start a business. It may also include helping with other life events such as a wedding.
Another reason for never promising an inheritance is the unknown costs associated with health care later in life. Assisted living facilities and nursing homes are costly.
You all know a family that has been torn apart by an inheritance gone wrong. Hopefully, that hasn’t been in your family. No matter how you plan to split the money among your kids, there will likely be someone that isn’t happy about it.
There are so many causes in the world more important than ensuring my kids get their second vacation home with the money we leave behind. An ideal situation would be when my kids are older; they are involved with charitable causes that we can work together to give to after we pass.