What is Inheritance?
It is the practice of passing on property, titles, debts, rights, and obligations upon the death of an individual. The rules of inheritance differ between societies and have changed over time. Wikipedia
Inheritance it the acquisition of property/s or estate by will or succession upon the death of the owner. Wealth analyst and experts are of the opinion that leaving inheritance may do more harm than good to your kids.
So these are myths about inheritance that will make you not want to leave your kids with much of it. Especially those in the I-don’t-want-my-children-to-experience-the-economic-hardship-I-experienced-while-I-was-growing-up group.
1. When you give kids a lot of money, you take away their willingness to work hard.
Wealth that is inherited and not earned through hard work may take away the mental and physical bites for success in an individual. “You’ll hardly ever find a super achiever anywhere who isn’t motivated at least partially by a sense of insecurity.”-Ted Turner
Insecurity is one of the major factor why people’s will to succeed grows. A rich kid does not have fear of insecurity, he has been provided with all the comfort he needs and desires through inheritance. He may remains layback and comfortable and refused to see or acknowledge opportunities for prosperity around him.
2. Inheritance may lead to extravagance and careless spendings.
We have all heard horror stories about the kids who blew their inheritance buying choice cars, going on fancy vacations and engaging in misguided investments. Most inherited wealth are spent extravagantly because they are never a consequent of hard work and careful planning. Kids besuited with wealth spend such wealth extravagantly.” The child that was not built (trained) will end up selling the house/s that was built” Yoruba Proverb.
70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third, according to wealth expert.
3. Inheritance can make your kids subject to bad influence.
Inheritance can leave your children more subject to bad influencers who are looking to get their hands on some of the money. Your kid’s wealth can be a subject of attraction to influencers who may also take advantageous their ignorance to sell bad ideas to then. They are most likely to clog around your kids a lot for the main purpose of getting a share of the wealth. They introducing ideas that may end up corrupting the manners and characters of your children
We have heard of parent who left fortunes in billions for their heirs. But through a combination of bad decisions, bad luck, and alcohol dependency, the next generation squandered that money.
4. Kids don’t get a feel for who they are when they have inherited much wealth.
“One of the greatest voyage in life is that of self discovery” Anonymous. Kids that have been be suited with so much wealth hardly have the need to find their abilities and make success of it. That is perhaps the reason why you hardly find children with rich background in major sporting competitions wining medals and making success of their God given talents. they are neither in the movie industry nor making giant strides in inventions and businesses.
“Less than 10 percent of wealthy Americans inherited any of their money, and it’s less and less every single year” Brian Tracy
Forbes says that 30 percent of the Forbes 400 members inherited their wealth and the remaining 70 percent are entirely “self-made.”
5. Inheritance can rob your kids of self-fulfillment.
Self fulfillment is defined by dictionary.com as the act or fact of fulfilling one’s ambitions, desires, etc., through one’s own efforts.
Self fulfillment comes from success attained from once efforts. A kid that has been given much wealth may not feel a sense of self fulfillment as the financial abundance he is experiencing is not as a result of his direct effort. Such kid grew up not fulfilled in life.
On the other hand, inheriting money can help children further their education, get their home and provide for their own families.
These are a few steps that can help keep things from going awry.
1. Give them some money while you are still alive and watch what they do with it . Do they or not learnt from their mistakes with the money?. This will help you consider whether your kids are matured enough to handle an inheritance.
2. You can put the inheritance in Trust. Such Trust can specify that the money should be used for education or health or even maintenance. Expert however recommend that the terms of such Trust should not be too strict not allow for flexibilities to allow your children not to grow their life.
Experts are also of the believe that patents with younger or less mature kids should also take their children’s age into account, for example, by creating a trust that staggers the ages at which children receive the money, You could dictate that the child gets payments at ages 25, 35 and 45, rather than all at once. Others optioned that you could appoint a trustee to keep an eye on things until the children reach a certain age.
3. You also need to consider whether your child have addiction or psychological problems that would impair his/her ability to deal with the money before handing over inheritance to him/her..
And finally, According to experts.” it’s better to give them a little when you are living, and less when you die”.
Read also: Ways to retire well