No two sets of parents approach the task of raising their children in the exact same ways. Similarly, there is no single correct way to approach estate planning when it comes to naming your children as heirs and beneficiaries. Different families have different priorities, needs and values. Your approach to estate planning should ultimately reflect and honor your family’s unique situation and approaches.
However, there are things that parents contemplating their estate plans can learn from financial giants similarly tasked with the challenge of determining how to treat their children in their estate plans. An article recently published by CNBC explores the decisions that Bill Gates and Warren Buffet have made in regards to their children and estate planning considerations.
These billionaires have the ability to leave their vast fortunes in the hands of their children. However, each has decided to leave only a small fraction of their financial legacy to their heirs. The rest of the substantial wealth they have acquired will be left primarily to charitable organizations.
These business leaders believe that they will do their children a greater service by insisting that they stand on their own feet in some capacity and do not simply live off the achievements of their parents. They are choosing to leave their children a generous legacy but one that is not too generous, as their children will still have to find their own way in the world financially.
If you feel strongly that leaving your children enough money so that they never have to worry is important to you, then by all means make that opportunity possible in your estate plan. However, if you feel that your children may benefit from inheriting less than your accumulated wealth, rest easy knowing that some of the biggest names in the financial world have come to the same conclusions.
Source: CNBC, “Smartest Decision Ever Made by Bill Gates, Warren Buffett,” Constance Gustke, June 3, 2013