Entrepreneurs may have a hard time deciding if they want to leave their children a large inheritance. You don’t want to create entitled, spoiled kids, but what’s so bad about giving your kids a leg up on their future? Maybe they’ll achieve greater heights than if they had started from scratch, says Forbes in a recent article, “The Successful Entrepreneur's Guide to Leaving a Financial Legacy That Won't Spoil Your Kids.”
Both are valid arguments, but there’s no need to make a choice: you can leave behind wealth to empower your children, and you don’t have to fear that they’ll turn out to be lazy, trust fund babies.
You can do this by mimicking one of the richest families in history: The Rockefellers. Their fortune is still going strong today—six generations later. They maintained their fortune by creating trusts to protect the family wealth. Trusts can have specific rules for determining how and when heirs are allowed to access money. This is the key to giving your children access to funds without eliminating their potential to achieve success on their own. Many times entrepreneurs fear leaving their children a large sum of money, but a trust lets you attach some strings.
You can’t do this with a generic trust formed with standard legal documents, but if you hire a qualified estate planning attorney, you can customize a trust to personify your wisdom and values.
A trust is also a great way to pass on your wisdom, knowledge, and experience to the generations that follow. The document can include a Statement of Purpose, which is your life philosophy. This can be reread and utilized for generations to come. This is how you leave a strong financial legacy to your kids.
Trusts can be used to divide, distribute, and destroy wealth. But with a financial legacy trust created by an experienced estate planning attorney, you can enhance the next generation’s contribution to the world and protect, preserve, and perpetuate your wealth—just like the Rockefellers.
Reference: Forbes (June 27, 2016) “The Successful Entrepreneur's Guide to Leaving a Financial Legacy That Won't Spoil Your Kids”