How Much or How Little the Kids Inherit

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How to have a valuable family conversation about your estate.

Talking to family members about estate planning and legacies can be difficult and even painful. These discussions, however, are an important way to share your choices with your children and prepare them for their financial futures. Here are a few suggestions on approaching this tricky topic.

Communicate your values about money in a larger context.

Build on the casual conversations you've already had with your kids about what matters to you most. When children are familiar with their parents' values, they're more likely to have a good idea of what to expect from their parents' estates.

Evaluate your children's money skills.

Kids who grew up in the same family don't always have the same knowledge and attitudes about money. Conversations about estate planning can become part of larger discussions designed to help teach them how to manage and become comfortable with their legacies.

When possible, treat children equally.

If your estate plan does not treat your children "equally," for whatever reasons, it's best to share that information well in advance and to communicate it privately to each child. If you can discuss these provisions and the reasons for them ahead of time, there is less likelihood of conflict between siblings after you're gone.

Set accurate expectations about how much children will inherit.

Not telling them may avoid conflict now, but it could sow seeds for deeper conflict and resentment down the line. Provide a clearer understanding of what assets they'll be taking on to prevent misguided expectations.

Prepare children for large or unexpected inheritances.

If you have a substantial net worth that's under the radarperhaps in the form of land or business ownershipyour children may be unprepared for what they will inherit. Your advisor can help heirs learn more about both the financial and the emotional aspects of managing inherited wealth. Your advisor can also help you consider different options, such as giving more to your children during their lifetimes to possibly reduce the impact of a sudden inheritance.

Set apprehension aside.

Perhaps the strongest reason for not discussing estate plans with family members is fearfear that children will be angry or disappointed, will build too much on their expectations for an inheritance, or will be resentful of other heirs. Although these conversations can be difficult, remind yourself that they're an important step in providing clarity about your financial legacywhich is ultimately in everyone's best interest.

Article provided by Melissa Stewart, CFP®, AIF®, Financial Advisor at Blueway Financial Partners of Raymond James.

The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Raymond James is not affiliated with any other entity listed herein. Material prepared by Raymond James for use by its financial advisors. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and CFP® in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements. Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. 2060 East Paris Ave SE, Grand Rapids, MI, 49546. Phone: 616-974-3370

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