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4 Things to Remember When Organising Your Will and Child’s Inheritance

One of the most essential documents you’ll ever make throughout your life is your will, and this is never more important than when it comes to your family. When your time comes, it’s critical to make sure your assets are being distributed in the right way and to the right people, especially when your children are involved.

We’re sure you want to give your children the earnings and benefits of your life to help them make the most of theirs. However, you need to make sure you’re doing this in the right way and minimizes the risk of problems and issues down the line, or even jeopardize your children getting their inheritance at all.

There are several things you’ll need to know to get the best results, four of which we’re going to explore today. Remember these when organizing and creating your will and you can be sure everyone in your family will have the best experience during one of the hardest times; helping to make things a little easier.

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  1. Naming a Guardian

The first thing you need to do is name a guardian who is going to look after your child, especially if they’re underage in your country and not legally an adult. This is typically around the 18 years old mark. This is so important because this is the person or family who will be looking after your children.

If you don’t name a legal guardian, things can get very complicated with parties like social services having to get involved. After you’ve passed, you don’t want to make things even more complex for your children; so name a guardian to make things easier for everyone. Be sure to talk to this guardian first.

2. Use a Financial Test

Sometimes, you might be in a position where you want to give your children their inheritance, but there are many concerns parents may have when it comes to actually giving your children that money. This is where a financial test comes into play.

With a test, you can see how your children will spend the money they’re giving and then you can see how to provide them with their inheritance which best suits them. Whether you want to give them a lump sum, or you’d instead give them monthly installments, so they don’t blow it all in Vegas.

3. Start Using and Set Up Trusts

Trusts are one of the best ways to keep your inheritance assets save and to ensure your children can access their inheritance safely. With a trust, you’ll be able to appoint your children and anybody else in your family or other loved ones to be trustees who can then access these assets.

With regards to your children, it’s best to set up a trust per child and then give them access to their own trust and not each other’s, while making sure everything is kept fair and how you want it. This is also important to think about for lots of reasons, especially if you have an IRA from a parent you want to give away, or money or assets from a business.

4. Don’t Forget Inheritance Tax

Inheritance tax is unavoidable, and you’ll need to consider this when writing your will. You don’t want to give your children a large payout of assets only to find they’ve been heavily taxed and left in an even more stressful situation. The rules of this will depend on your individual State or Country.

You will need to talk to a professional will service who will be able to talk you through the details of your individual situation, and how it will affect your children, so make sure you’re booking an appointment to talk through everything, so everyone is clear.

Summary

As you can see, there are several things you’re going to want to think about when it comes to organizing your child’s inheritance and sorting out your wills. The more you can be prepared, the easiest the legal side of the process will be for the ones you love; the importance of which can never be understated.

Why Talk About Money With Your Children?

Why is it important to talk about money with our children? As a society, we’ve come to understand that staying silent on the topics of sex and drugs can often lead to negative or unwanted consequences. The same is true for money.

Starting the money conversation early, and having it often, in an age-appropriate way helps prepare our children for managing their own money wisely.

Stay silent about it and you risk leaving your children open to the pitches of TV adverts and peer pressure. Much better for you to take conscious control over what they are learning rather than the bombardment of advertising or negative portrayal in films and the media.

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Theresa Harezlak, a financial adviser with Savant Capital Management and a mother of two, says the biggest money mistake that parents make is silence.

“Every time my kids go outside I tell them to be careful crossing the roads and do not talk to strangers, but we never talk about money. In reality”, she says, “the chances of her kids being abducted are very low, but the chances of her children using money are certain”.


Theresa Harezlak

Staying silent about money and you risk leaving your children open to the pitches of TV, adverts and peer pressure. Much better for you to take conscious control over what they are learning rather than the bombardment of advertising or negative portrayal in films and the media.

For example think of how many films or TV shows have the arch villain as some kind of reclusive billionaire. In fact how many positive examples of rich people can you call to mind?

In my view, too many parents don’t talk about money with their kids at all. Others skirt topics they don’t know much about, like investing and debt. Parents are the main source of money information for children, but 74% of parents are reluctant to discuss family finances with their kids, according to the 2014 T. Rowe Price Parents, Kids, and Money Survey. That’s a big shame, because ignorance about money can set up your kids to make bad decisions — and eventually pass those bad habits on to your grandchildren.

The solution: Make financial literacy a family value

In her book, Do I Look Like an ATM?: A Parent’s Guide to Raising Financially Responsible African American Children, Sabrina Lamb details “the business of your family household.” Lamb, says all families should work together on five financial topics: learning, earning, saving, investing, and donating time or funds to causes you value. She recommends a daily diet of business news, occasional meetings between the kids, your bank, or other financial advisors, and support of your older kids’ entrepreneurial goals. This might be a bit idealistic for many but using the news or an online article as a stimulus for a conversation about money could be a good start.

Even if money is tight, don’t stress about it in silence.

When parents are worried about money but are not communicating their financial situation, children pick up on the anxiety and associate it broadly with finances. Rather than learning money lessons from their parent’s mistakes or particular situation, children instead learn that money is ‘stressful’ and ‘bad’.

A 2013 Study by Cambridge University for the Money Advice Service revealed that our money values and habits are formed in childhood often before the age of 7. If a child is growing up with the programming that money is stressful and bad what are the chances that they will ever make any as an adult?

This is why the primary goal behind The Financial Fairy Tales books is to help spread positive, empowering messages about money to children and counteract the negative bias they may be exposed to elsewhere.

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Why Pocket Money Is Important

A child or young person having money of their own is an important rite of passage and pocket money can form the basis of excellent financial education in areas such as budgeting, saving and spending. But it doesn’t have to come exclusively out of your purse or wallet.

A big issue (pun intended), I have with automatically giving pocket money, or an allowance, is that it can easily create an entitlement mentality. Anyone who has seen their teenage child hand on hip, open palmed, demanding cash before going out on a Friday night will know instantly what I mean.

The other place where you regularly get money for nothing is from the benefits system and I don’t believe that many parents are deliberately training their kids down that route!

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One of my favourite money experts, Loral Langemeier is quite definitive on the subject:

“NEVER PAY YOUR KIDS AN ALLOWANCE”

Loral argues that the best investment you can give your child is to teach them the value of entrepreneurship and the way that the economy works. So instead of paying pocket money every week, design exercises and activities that are truly focused on basic finance.

OK you may be thinking but how does this work in practice? Here’s an example, you might sit down with your child and organise some basic household tasks or chores such as doing the dishes or clearing the table.  Work with them to assign a monetary value for each one of these tasks.  Each week as they complete the list, pay them an agreed amount minus a small percentage that goes into a savings account specifically for them. This deduction functions a lot like taxes or regular savings accounts they’d have in the real world.

With teenage children you can add a bit more to this model, including how to manage a bank account, deduct expenses that might make sense given their age, or help save for the things that they’d want to buy.

Why do it this way?  Not only does your child learn the importance of how the economy functions, but they also understand the value of their own work and services.  As they develop their entrepreneurial muscles they may want to take on extra work or start a small businesses of their own. Plus you are automatically encouraging them to save.

Martin Lewis founder of Money Saving Expert and regular TV commentator in the UK is a fan of both pocket money and financial education – and he recommends encouraging children to work for their financial rewards, in order to embed a principle that will serve them well throughout life. Rewards for cleaning the family car or doing the washing up after dinner are great tasks to exchange an agreed amount of pocket money for, but it’s less productive to train children to expect payment for tasks they should be doing anyway, like cleaning their room or doing their homework.

In closing this discussion on the importance of pocket money, a quick word about consistency.

If you promise children a specific amount each week or month, make sure you stick to it. Paying pocket money on an ad-hoc basis will teach them that money promises can be broken; and they will value the money they receive less if you seem to attach little value to the act of giving it.

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Grieving and Growing: Dealing With the Death of a Parent

You never imagined this day would come, when your parents left you behind to go to heaven. Dealing with grief at this point in your life was not something you were prepared for and you need a few moments to think about how to deal with it all. You have been so busy trying to raise your own family that you never prepared yourself for something like this. You want to teach your kids about life and death, but you’re not sure how to go about it. You understand how important it is to grieve the loss of a close family member and then move on with your life. The time has now come to start the process and come to terms with the devastation in your family at this time.

The Practicalities

Before you can start to grieve properly, there are so many practicalities to take care of. You will need to organise a funeral, take care of legal matters and even hire local undertakers. You can easily get swept up in all of the logistical steps that you forget how to be upset. You have to put on a brave face and get all of these jobs done, otherwise it simply won’t happen. It’s fine to be on a mission to get everything sorted, but then you need to take a step back and start the grieving process.

The Grieving Process

There is no right or wrong way to grieve the death of a parent or loss of a close family member; everybody deals with this in very different ways. Whether you spend a few days being upset or you throw yourself back into work and push it aside for a while, there will always be a way that works for you. What you mustn’t do is keep your feelings bottled up inside as you will inevitable explode at some point. Speak to somebody you trust or go to a therapist to talk about your feelings in a non judgmental environment. Once you have come to terms with all of your emotions you will gradually be able to move on and start living your life to the fullest again.

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The Conversations

Talking to your children about death can be incredibly difficult, but it has to be done no matter how old they are. Your little ones are going to have questions about where their grandparent has gone, so make sure you explain it in an age appropriate way for them to comprehend. There are many children’s books out there that help you to explain the process of life and death with your little ones, so this might help too.

The Normal Routine

At some point you will need to get back into the normal routine of life, without feeling guilty about smiling again. Once that day comes you will be able to look back on fond memories without feeling sad and upset about the passing of your parent.

Dealing with the death of a parent is incredibly difficult, but if you can learn to grieve and grow in the right way for you, you will soon be able to process it and move on.

Smart Parents Teach Their Kids These 6 Things About Money

One of our main jobs as a parent is to impart enough knowledge and wisdom to our children so they can not only survive in the world but thrive as well. Of course, in modern society, this means educating them on money and finances as well. A topic you can read more about below.

Spending more than you have is always a bad idea.

While our whole society seems to be built on the idea of borrowing money to pay for things that we could not afford to buy outright, educating your kids that spending more than you have on a consistent basis is a bad idea is crucial. This is because if you don’t, not only does it mean that they will get used to a lifestyle that is way beyond their means, but it also sets them on the slippery slope towards unmanageable debt.

Of course, this makes it an essential lesson that you kids need to learn about money. Luckily, it is possible to instill this wisdom in them from an early age by providing them with an allowance, and then encouraging them to save at least a portion of this each month.

Also, you may wish to encourage children to work and save for items they want, as opposed to buying everything for them. The reason being that this can also help them to get into the habit of raising the money before they spend it.  

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Installing a good work ethic in your kids early on can be a game changer.

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The is usually a way out of a financial jam no matter how tight it is.

Another valuable lesson that you need to impart to your kids is that there is nearly always a way out of a financial jam, no matter how serious it is. For example, there are many debt relief agencies out there that can help consolidate debts, something that means it’s much easier to pay them off at a reasonable price each month, which is knowledge that it is essential for your kids to know about, but not plan to rely on.  

Alternatively, there are also loans were someone else vouches for you and promises to cover the debt if you default. This can be hugely helpful if someone is in a financial fix, but their credit is poor. Of course, you will also need to remind your kids to shop around for the best apr guarantor loans and other financial products as well, as some will offer a lower interest rate and other benefits. Something that can make all the difference when it comes to being able to pay them back, and so could help your children have a better quality of life as well as get out of financial trouble if the need arises.

Saving is good, but investing is better.

Parents also need to emphasize the importance of not just saving money, but also investing it as well. In fact, it is hugely important to teach your kids about investing because no other action can allow them to increase their net worth in such a drastic way.

 

Sadly, even now the investment market has become much more accessible to the everyday person because of apps, and low management fees, few people realize the long-term benefits of this activity. Therefore It’s crucial to make your kids not only aware of all the investment options that are available to them including property, cryptocurrency, and futures but also educate them on how these platforms work.

Also don’t forget that as a rule investment is a cumulative process, and that means the sooner your children can begin on this path, the easier their financial future will be. Therefore be sure to explain and emphasizes the value of investing during their mid to late teens so they can get a jump on the competition.

Money doesn’t make you happy, but it can help.

It is also hugely important that as a parent you help your children to understand that money in and of itself isn’t what makes people happy. In fact, it’s the lifestyles, health care, and reduced stress that those with good finances enjoy that is the key.

What this means is that it’s crucial to delineated the quest for becoming rich and yet not spending any of this in ways that enrich life, and doing the opposite. Therefore, be sure to listen to your children’s opinion on what they want to do in their lives, in term of their career, and their goals, as well as who they want to be and adapt your financial education to this.

After all, just recommending that all you kids go into high paying finance positions is a one size fits all solution that is unlikely to work for most people. In fact, at worst it can land your kids in a career that is unfulfiling, even cause them to resent you for pushing them in that direction in the first place.

Monitoring spending is a task that needs to be done regularly.

It’s likely that as a patient you will make an effort to teach your kids that they need to wash up after they have cooked and eaten a meal and that the need to change their socks and underwear each day. However, it can be all too easy to forget to teach them that monitoring what has been spent each day should be a regular task as well.

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In fact, by establishing this as a part of their daily routine, you give your kids the tools to much better monitor what is happening with their finances. This can help them make improved buying decisions, avoiding impulse buys, and stay out of debt. All things that mean this small daily task can have a considerable effect on their financial well-being through the entirety of their life.

Finances don’t have to be confusing.

Lastly, it’s incredibly important that you teach your kids that correctly managing their money and budgeting doesn’t have to be complicated or confusing. In fact, sometimes the simple systems can work much better not only because they are clearer to follow and stick to, but also because they make dealing with financial matters a lot less intimidating. Thus making this final lesson one that is also crucial to impart to your children.