On today’s The Financial Commute episode, Chris Galeski welcomes Wealth Advisor Eric Selter to discuss legacy planning. Eric says he generally finds his own clients falling into one of three categories when it comes to this topic: some want to spend all their money while they’re alive; others would like to help their kids along the way and have a considerable amount of money left over for them after they pass; and some clients are a mix of the two, ensuring they themselves are taken care of while leaving some money for their children. Therefore, Eric says legacy planning is a very personal decision and can vary from person to person.
So how does Eric advise his clients? He says it is important for financial advisors to be facilitators in these situations, encouraging open, intentional conversations among family members about when would be best for the child to receive a portion of their assets if their parents pass away. Chris and Eric agree that, generally, choosing a later age (30 or later) may be wiser, as this allows the child to reach maturity before having to be responsible for such a large sum of money. You can always change the age if you think that child may become more mature earlier or later in life.
Furthermore, Eric suggests that as a child ages and becomes more trustworthy, it is important for the parent to give them at least a general idea of how much money they have, what will happen to their assets after they pass and what the child should expect to be responsible for; otherwise, it may be a shocking and overwhelming experience for the child if they are kept in the dark before their parents’ deaths.
Finally, Chris and Eric agree that regardless of how much or when they decide to give assets to their loved ones, listeners must develop a trust and will sooner rather than later. While legacy planning may be uncomfortable or daunting to think about, it is extremely important to ensure your money makes the impact you want it to make after you pass.
Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your financial, legal, and tax professionals before implementing any transactions and/or strategies concerning your finances.
