The answer: it all depends on your situation. However, when you plan intentionally, you can approach your situation with peace.
Financial professionals get this question more frequently than you might expect: “When should I bring my family into my financial picture?”
This is a wonderful thought. It demonstrates consideration for the world or the future of your children and their children and maybe even your grandchildren’s children!
And while this is a good question, there might actually be a better one:
How should I bring my family into my financial picture?
Your situation is unique from all others, so the timing for you may be different from your neighbor, mailman or poker buddy.
You know you want to leave your loved ones better off financially than you, but maybe your family doesn’t talk about money! Maybe they do, but they are afraid to plan for life’s party crashers. Maybe you’re afraid too.
These scenarios, and thousands of others like them, are a good reason to focus more on the how and less on the when.
Having the experienced guidance of a financial planner can help shape your how into the financial legacy you want. It is our job to meet you where you are, facilitate conversations and make them easier, all while meeting your expectations.
Along the way, it is helpful to include children and grandchildren in the planning, but parents should take the lead. Communicating with family may look different for everyone, but these are some potholes you can avoid to make the road less bumpy:
1. Communicate often, communicate clearly.
Everyone involved should know your goals and they should be stated plainly. Miscommunication can lead to issues if you are not intentional about creating a mutual understanding with your family.
For example, you would want to let your children know about the college fund you plan on setting up for your grandchildren. It sounds simple, but the surprise 529 is more common than you might think!
2. Taxes can be planned for, and it could save your beneficiaries money
It may be wise to realize taxes at lower rates, especially with IRAs or annuities.
Your beneficiaries may be in a higher tax bracket than you when they inherit your accounts. By taking the money out early, it could keep more money in your family’s pocket and less in Uncle Sam’s.
3. Prudent planning sets your family up for success in their situation
It’s often wise to consider the details of your financial legacy. Intentional, purpose-driven planning is a huge factor in your family’s
It may not be wise, for example, to drop a large bag of dollars into the lap of a grandkid still enjoying the high life. Sorting out the intricate details often offers peace of mind. When seas get stormy, it’s always helpful to have a captain who knows where land is and a lighthouse to help guide the boat home well.
For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.