Many families choose are uncomfortable about discussing family wealth and trust funds with their children until after children reach an appropriate age. One reason families fear telling their children how much money they have is that they are afraid that the children won’t know how to deal with large sums of money at their fingertips or their children’s friends may take advantage and ask to borrow money from them.
However, children are smart and they can Google the family name and learn about the fortune that way, hear about it on the news, read a magazine, newspaper or Internet article. Hiding a trust fund and family wealth may only confuse them. Also, by law in most states, including New York, the trustee of a trust must disclose the existence of the trust to all trust beneficiaries when they turn 18 years of age.
Why Under-communicating with Your Children May Be Harmful
Under-communicating with your children can actually be more harmful because they may choose the wrong type of education or career path. An open transparent policy between parents and children is more beneficial so that children may make smarter investment decisions when they do have access to their trust funds. Setting up educational sessions and talking about the purpose of the trust is one way to start educating your younger children. Older children may benefit from meetings with financial advisors and a Long Island estate planning attorney where they can learn about investment strategies, good investment habits and trust laws.
If the major source of your wealth is from a family business, teaching your children about the family business firsthand with occasional visits to the business when they are young and then having them work there when they are old enough makes them feel part of the business and gives them a sold understanding of where the money came from in the first place. If real estate holdings are part of the trust assets, then you may want to drive them by the properties or show them pictures. Parents who educate their children about the value of the family estate can have more confidence that the children will be less likely to squander the money by going out and buying something expensive such as a car, clothes or taking extravagant trips with friends.
Getting the Right Message from Parents
It is important that children growing up with family wealth should get the right message from their parents or guardian about their inherited family wealth and understand the differences between families inherited wealth and earned wealth. Teaching your children the right message early on can make a huge impact on how they adjust to having accumulated wealth and how they preserve it for their children and future generations of the family. It will also have a positive influence on their work ethics and business management skills.
Role of a Long Island Probate and Estate Attorney
The role of a Long Island probate and estate attorney is helpful in educating your older children regarding the New York trust and federal tax laws. A Long Island estate attorney can help you and your family with estate planning and investment strategies so that when it comes time for your children to receive their inheritances, you can rest assured knowing that your assets will be protected and your children will be comfortable with inheriting the family fortune and make wise decisions on how they will use the money after you are no longer around.
If you would like to speak to a Long Island estate attorney, give us a call at (516) 777-0647.