• 25
  • August
    2010

Is Creating an Estate Plan Enough? Not Really.

Of course, the first and arguably the most important step to preserving your wealth is creating a comprehensive estate plan. Without the right documents in place, any other steps would be futile. However, after you have created an estate plan that meets your needs, it is important to prepare your heirs to cultivate the wealth you plan to leave them.

Raising each generation to appreciate the value of the estate may not be as difficult as you think, especially if you start when children are young. In this post we will discuss the benefits of creating a family culture that will protect your estate. A future post will discuss the importance of educating your heirs to manage the estate once you have passed away.

Shared Values and Open Communication Are Key

What do you envision your wealth being used for? For some families, charitable giving is of the utmost importance. For others, strategic investment is central. Whatever your value system, it is important to share that system with your family. Heirs need to understand why you make the financial decisions you make.

Controversy down the road can destroy a family's wealth. The actions you take today can help prevent arguments in the future and preserve your heirs' inheritance. For example, you can:

  • Discuss family finances and business decisions with multiple generations of your family.
  • Share your family's history with children and reinforce that history as they grow up. 
  • Ensure that all of your heirs are familiar with your estate plan and understand your wishes.

Will contests and differing opinions about how to manage wealth in the next generation can be prevented by careful and consistent communication today.

Source: Investor Guide, "5 Ways to Prepare Your Heir to Inherit Your Estate," 23 Aug 2010