Would your kids know how to handle an inheritance?

From: REAP, LLC. | Retirement & Estate Advisors & Professionals

Many people seek to build financial security and wealth not only for themselves and their families, but also for generations down the line. The unfortunate reality, though, is that 70 percent of rich families lose their wealth by the second generation. And this regrettable scenario is not limited to the affluent.

While it’s impossible to predict the future, there are safeguards you can put in place to help ensure your hard-earned money has a better chance at longevity after you’re gone.

Instill financial literacy from an early age.
A recent study revealed that only 17 percent of wealthy parents planned to disclose their net worth or income to their children by age 18, and another 18 percent said they would never reveal it to their offspring.

Instead of leaving kids in the dark about how to view and handle money, begin talking to them about finances early and slowly build as they mature. Financial literacy helps young people understand their own finances better and may spur wiser financial decisions later on.

Insist younger generations understand the value of hard work.
It’s the classic parable: Give a man a fish and he eats for a day, but teach him to fish and he’ll eat for a lifetime. Help youth make the connection between financial security and the vision, work ethic and perseverance it takes to earn it. This will not only help them appreciate the value of money, but it may also encourage them to consider how they can create meaningful change in the world.

Structure an inheritance carefully.
For peace of mind, you may consider protecting your assets in a trust. This fiduciary agreement can insulate your financial legacy from overindulgent spending and help facilitate wealth longevity. Get in touch if you’d like guidance crafting suitable provisions for your family.

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