Who you leave money to is up to you, but make sure it’s clear

Many people in Crane County may fantasize about receiving a significant inheritance from a wealthy, far-off relative that they barely know. All of a sudden, someone would come home to a gift of a couple hundred of thousands of dollars. If it happens, it can certainly be a financial boon, but it is something that not many people should bet their financial health on. Oddly enough, however, 25 percent of people between the ages of 18 and 59 expect to receive an inheritance at some point in their lifetimes.

They may be disappointed, especially since 1/3 of wealthy baby boomers have said they plan on leaving money to charities, not to their children. Ultimately, how parents want to set up their estate plan is up to them, but it is important that they explain their decisions. Of course, they need to work with an estate planning lawyer to get everything in order, but they should also take the time to explain and to set their children’s expectations about what will happen after they die.

Perhaps the parents want their children to make their own money. Maybe they feel like they’ve already given their children enough. Or, it may be that they are concerned that they will live longer and run out of money to give to their children. Regardless of why, it is important that parents tell their children not to expect an inheritance and certainly not to plan their finances around one.

This is not to say that there won’t be some people in Texas who will receive an inheritance from their parents. Even for those that do, however, it should be more of a pleasant surprise instead of an expected certainty.

Source:Sacramento Bee, “Kid and Money: If you plan to leave an inheritance, manage expectations,” Steve Rosen, Oct. 14, 2013