Amassing a certain amount of wealth is one thing -- making it last through subsequent generations is another. Florida residents often create carefully crafted estate plans with the hopes that wealth will not only benefit their children, but also their grandchildren and beyond. The reality is that many grandchildren never see much of that wealth, and some experts believe a breakdown in communication prevents that second-generation from handling things properly.
Money is still a somewhat taboo topic, even among family members. Wealthy parents in particular seem to struggle with finding the balance in talking about finances, with many worrying that giving their children too much information will disincentivize them from working hard. Others worry that letting on too much about how much is at stake could cause siblings to fight over who may get what, ultimately leading to distrust.
However, avoiding the money talk actually does a greater disservice to those who initially earned the wealth, heirs and future generations. When heirs receive inheritances that they are not prepared for, they are more likely to mismanage the funds and assets even if they are contained in trusts meant to protect them. Mismanagement or purposeful overspending quickly depletes wealth, erasing the legacy their parents may have originally planned for.
So how does talking help? Rather than disincentivizing them from working, letting children as young as 16 in on the plan helps build trust and understanding of the situation. Heirs will need to understand how to not just manage their inheritances, but also how to maintain and potentially grow the wealth for their own children and beyond. In most cases, letting heirs in on the planning process can ensure that everyone is willing to work together.
Some people in Florida feel as if an estate plan is an intensely personal item containing their final wishes. While this is certainly true to an extent, those who hope to build lasting wealth should not plan to do so in isolation. Working alongside an experienced counsel and updating heirs throughout the process can protect and secure a legacy for generations to come.