Warren Buffett recently offered some advice to wealthy parents on how to prepare heirs to handle inherited wealth, so they do not end up wasting money and the future of the next generation, according to Forbes in "Warren Buffett's Advice On How To Raise Well-Adjusted Heirs."
Buffett's advice includes:
- Do not try to use the terms of a trust to force children into certain careers. Let them do what they want for work and they will be more likely to stay at it, after receiving an inheritance.
- Tell heirs about the details of your will to make sure they understand their responsibilities and to talk about whether they think it is fair. Do not surprise them with your estate plan, after you pass away.
- If you have more than one child, do not force your children to give to charity as a group. Letting them all choose charities for themselves, helps them to get along better.
- You can give your children too big of an inheritance. Ideally, they should be given an inheritance that is large enough to do anything, but not so large they can do nothing.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and may include large sums of money that you hope will be spent wisely.
Reference: Forbes (June 1, 2018) "Warren Buffett's Advice On How To Raise Well-Adjusted Heirs."