3 Reasons Why Retired Boomers Don’t Give Their Kids a Living Inheritance

If you produced a significant amount presence You may be starting to think about what will happen to him/her during your lifetime when you are gone. You can donate it to a worthy cause or pass it on to your children. But what if you want to give them some of your wealth before you die?

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As the Great Wealth Transfer continues, approximately $84 trillion is expected to be transferred from the silent generation and baby boomers to their children by 2045. And much of this will be done as a living legacy.

This huge transfer of wealth has caused a lot of debate about whether it’s a good idea to leave a living legacy to your children. Read on as we examine some of the reasons why retiring Boomers shouldn’t leave a livable inheritance to their children, and a few reasons why they should.

Why You Shouldn’t Leave a Living Legacy to Your Children?

Risking Your Own Financial Security

It’s common to want to see your children succeed. This applies not only to their careers but also financially. Seeing them experience things like buying a house or traveling the world can give you a sense of satisfaction because you can witness and enjoy their accomplishments.

But you also need to consider your own needs. If you plan to leave an inheritance to your children while they are still alive, it is important to do so carefully. What happens if an unexpected expense arises? Will you still have enough funds to continue living your current lifestyle?

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Family Resentment

If you have more than one child that you plan to leave an early inheritance to, you need to do so carefully. It’s easy to let go of cash assets and know that the distribution is equal. But what if you plan to leave someone a business owner or real estate owner?

The values ​​of such assets can fluctuate, and if one dependent acquires something that becomes more valuable, it can cause tension in the family. Not just between siblings, but also between you and them.

Potential for Fiscal Irresponsibility

Let’s be honest with each other. Sometimes people make bad money decisions. Lifestyle inflation is a real thing and can lead to some serious consequences. When people get additional money, whether it’s a raise at their job or an inheritance, they feel more freedom. They want to go out and treat themselves to something they want but can’t afford. And while this is normal to some extent, there needs to be some restriction.

Without the right amount of discipline, early inheritances given to people who are not prepared to manage larger amounts of money can end badly. In this case, it may make more sense to invest the funds in a trust where you can have more control over how they are used while you are still alive.

Why Should You Leave a Living Legacy to Your Children?

Potentially Reduce Property Taxes

Depending on how you set up your estate plan, your assets may or may not go through the process known as probate after you die. Not only is this a lengthy process, but it can also trigger estate taxes that will reduce the amount of inheritance your children can inherit.

Instead, giving your children a living legacy can put you in control. You can strategically gift assets to your dependents; This will help reduce the property taxes they may have to pay.

Help Your Children Today

We’ve mentioned before that as parents, we want to see our children succeed no matter what they do. Luckily we have a lot of control over this. We can teach them the difference between right and wrong. We can save money so they don’t have huge amounts of student loan debt hanging over their heads if they want to go to college. Or we can help get them out of financial trouble.

Let’s be realistic, some younger generations, especially millennials, have had their share of problems. Many people in that generation also coped with the financial crisis as they started their careers. Many watched from the sidelines as housing prices soared to unaffordable levels, not forgetting to live through a pandemic.

All of this has contributed to the struggle of some to get ahead financially. But leaving a living legacy to your children not only helps parents enjoy the wealth they’ve created, it also helps their children have some financial breathing room.

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