The idea of leaving an inheritance for children is common among parents, but others may question if it is a wise move. Here, we’ll examine if leaving an inheritance for children is necessary, the benefits and drawbacks of doing so, and whether doing so would be a wise decision.
Leaving An Inheritance For Children
Legally, parents have no obligation of leaving an inheritance for children. Living comfortably should unquestionably be the priority for parents who have only adult children rather than worrying about leaving money for their children. In this manner, parents get to enjoy their lives and ensure their needs are met.
Many parents who have young children want to make sure that their children’s needs are met at least until they are adults (or even longer if a child has a condition). That can lessen the likelihood that the children will have to adopt a lower standard of living as they grow up and guarantees that any remaining parent isn’t overburdened by being the family’s sole provider of money.
Nevertheless, any kind of inheritance is completely optional. You can set up your financial life to make one happen if you make it a priority. However, you can choose not to leave them an inheritance if doing so would put you in a position of undue financial difficulty or if you feel that it is not necessary, regardless of whether doing so could be possible for you to afford.
The choice of leaving an inheritance for children is ultimately a personal one. An inheritance might be advantageous since, as was already indicated, it helps your children manage their financial obligations. Additionally, a lot of people think that leaving your family an inheritance shows how much you care about them and that your finances are stable enough for you to do so.
However, leaving an inheritance for children can cause issues. As a result, it is possible to opt out of giving one. Whichever approach you choose, just be sure to have a documented estate plan that outlines your preferences. In that way, your assets will go where you want them to.
Pros and Cons of Leaving An Inheritance For Children
Financially Provide For Your Children
Generally, the biggest reason for leaving an inheritance for children is to give them some financial security. This could be particularly important for families with young kids, school-age children, or even college-age young adults who aren’t yet old enough to handle all of the monetary side of life alone. Similarly, if a child has a disability that highly limits their ability to earn an income, an inheritance could provide financial security.
Showing Your Love
Many people view leaving an inheritance for children as a sign of their love and concern for them. In this case, the parent leaving the bequest mostly benefits emotionally. In essence, it gives them a feeling that they will be able to take care of their kids when they pass away, which may give some peace of mind.
An inheritance may also be seen by children as a sign of their parents’ love for them. It is regarded as evidence that a parent loved them enough to support them after their death in addition to caring for them as they grew up.
Financial Independence Is Being Impeded
Some children’s attempts to manage their own finances may be stymied by a sizeable inheritance. For instance, it might result in a failure to launch, causing a child to approach adulthood without having any strategy in place to handle their long-term financial needs. The child might then discover that they are ill-equipped to take care of themselves once the inheritance runs out, depending on how long the inheritance lasts.
Depending on the age of the children, how they act in general, the quantity of the inheritance, and other considerations, this is a problem that may or may not be a concern. But it’s something to take into account while considering whether or not to leave an inheritance.
Limiting Your Spending
In order to leave an inheritance, a parent has to spend less than they’ve managed to save. As a result, it could mean living on a restrictive budget when it isn’t technically necessary, as the parent technically has the funds available to live more comfortably.
Essentially, it can mean a parent is sacrificing their quality of life in hopes of providing their children with something better. While some parents may be okay with that choice, others may find it oppressive or that the decision causes them to have to struggle. In the latter cases, that could cause a parent to resent their children for a decision the parent made, which is never ideal.