Market Update – November 2022
22/11/2022Market Update – December 2022
22/12/2022
Building your wealth took a lifetime of hard work, and you want the money to support the lives of the generations that follow. That is why you must prepare your children to manage their inheritance wisely.
Investing philanthropist and businessperson, Warren Buffet, famously says that when it comes to leaving an inheritance for your children, the perfect amount is “enough money so that they would feel they could do anything, but not so much that they could do nothing.”
And who can blame him? We’ve all heard the cautionary tales of heirs who’ve blown the family fortune within a generation, after all.
Building your wealth took a lifetime of hard work, so you want the money to support the lives of the generations that follow. That is why you must prepare your children to manage their inheritance wisely and make the most of what you pass down.
Here are some ways you can do this.
Do not make your estate plan a secret
Nothing causes more hard feelings than surprises in a will. So, keeping your children in the dark about your plans is a recipe for expensive family disputes. While you don’t need to share exact numbers if you don’t want to, discussing your estate plan with your adult children helps them know what to expect. The more prepared your children are to manage the family wealth, the better.
Involve adult children in a family foundation
Philanthropy can be a wonderful way to promote your values, prepare your children for the responsibilities of wealth and, show them the impact money can have on others first-hand. Involve them in the running of the foundation, and they can learn the financial responsibilities and accountability that comes with the role – lessons that are not just relevant for charitable giving but also their wider life.
Teach them about money
It is important your children know there is more to having money than merely spending it. Teaching them financial skills and money management, guards them against unnecessary investment risks and get-rich-quick schemes, as well as taking on excessive levels of debt.
Put strings on their inheritance
Setting up a family trust can be a wise option, particularly if you are nervous about how your children might spend their inheritance. Trusts are designed to manage, protect, and pass on family wealth from one generation to another.
Work with a trusted team
Transferring wealth between generations can cause challenges, no matter how well prepared the beneficiaries are. Working with an expert financial adviser who specialises in generational wealth planning can help mitigate these risks. They can help you put together a robust financial plan to preserve your legacy for future generations.
If you would like to have a confidential discussion about your family wealth, speak to Affinity Private Advisors today by calling 1300 769 304, emailing enquiries@affinityprivate.com.au or filling in this online form.
The information contained in this article is current as at 01/12/2022. Any advice or information contained in this report is limited to General Advice for Wholesale clients only.
The information, opinions, estimates and forecasts contained are current at the time of this document and are subject to change without prior notification. This information is not considered a recommendation to purchase, sell or hold any financial product. The information in this document does not take account of your objectives, financial situation or needs. Before acting on this information recipients should consider whether it is appropriate to their situation. We recommend obtaining personal financial, legal and taxation advice before making any financial investment decision. To the extent permitted by law, Affinity Private Advisors does not accept responsibility for errors or misstatements of any nature, irrespective of how these may arise, nor will it be liable for any loss or damage suffered as a result of any reliance on the information included in this document. Past performance is not a reliable indicator of future performance.
This report is based on information obtained from sources believed to be reliable, we do not make any representation or warranty that it is accurate, complete or up to date. Any opinions contained herein are reasonably held at the time of completion and are subject to change without notice.
.
