Estate conversation timing
My husband and I are both 60. Our boys (twins) are 20. We likely will have substantial assets to pass on. When are they old enough to let them know what they could inherit. I am coupon clipper and frugal on day to day spend but do spend on “experiences”. So they will be surprised. Dont think they are prepared to manage so that’s a whole other topic to figure out! Bottom line I don’t want them to coast in college and assume they will be fine with inheritance. At what age do we clue them in as to our full financial picture.
Terry Says
You strike at the heart of the issue. I can only give you my own experience. The first thing — if you haven’t done so already — is teach them the VALUE of money. Do they understand that for you to pay say $50,000 in tuition and board, you must earn almost $100,000 — on which you must pay income taxes, state and federal? That’s the first lesson about work and money. The government takes its share!
The second lesson is how hard it is to “make” money. Have they had jobs? Have you offered to match their savings, so they make correct choices about “discretionary” money?
Have you introduced them to the concept of long-term investing. (My book, The Savage Truth on Money would be a good starting point. Written for them. It’s on Amazon)
Yes, they have likely heard about meme stocks and speculation — but they need to know how time makes money grow even invested conservatively.
Do they understand the dangers of debt — especially credit card debt? The first chapter of my book will be a revelation — it takes 31 years to pay off a balance if you pay only the minimum monthly payment, and along the way you will pay 4x the amount you charge in interest!
If you’ve taught them all those lessons along the way — and it’s not too late to start — then by the time you pass on, they will be competent and capable. I know because that’s the route I took with my own son, and it’s my greatest accomplishment!
You need to start the lessons first, with incentives. And the discussion comes much later. And in the meantime, you need a trusted adult friend or fiduciary to handle things if the unexpected happens and they become beneficiaries before they are fully ready.
