The premise behind this post is based on a forum topic started by Sampson. The question was, what are your inheritance plans when you pass on? Do you plan on leaving a large sum for the next generation? Or do you plan on spending it all? Perhaps you plan on leaving whatever is left over?
Our Plan and Why
I’m closer to the leaving whatever is left over but with a twist of course. As I explained in the forum, I plan on helping the kids out financially at major life events/milestones while I’m still alive and when they need the money most. Since I plan/hope to live a long time, when I pass, the kids will be older and will be already financially secure (ideally). So while the kids are relatively young, I plan on financially contributing to their milestones such as college/university, a wedding, or perhaps even the down payment on their first house.
Even though I worked my way though University to cover tuition (part time job and coop), my parents helped us out with a portion of our wedding costs and they even made a contribution towards the down payment of our first house. Having any amount of help in the early years, especially when just starting out in life, can be the kick start you need to get ahead.
There’s also another benefit of gifting cash to your kids while you are still alive, you get to avoid probate fees. When you gift cash to your adult kids, the transfer is completely tax free. However, if you wait until death, the whole estate will face a probate fee before the money can be transferred.
More than likely, we’ll continue to build assets for the remainder of my life which could result in more money than we can spend due to our relatively conservative lifestyles. If we do end up with a sizable portion, we plan to leave some to the kids but most of it will be donated to charity. Perhaps we’ll even start a small charitable foundation depending on the amount.
The forum opinion/plans on this issue are all over the map. Some plan on simply leaving the house behind, others plan on leaving nothing, but most plan on leaving something.
Will you leave any assets behind? What are your plans?
If you haven’t already, make sure to visit: The Canadian Money Forum.