Many parents fail to get their financial affairs in order, neglecting to take care of such things as wills, living wills and powers of attorney. But even those who think they’ve covered all of their bases often leave one of the most important tasks undone: They fail to talk to their adult children about the money they’ll be leaving them someday.
For many, I’ve found, it’s because it’s a private topic — and an uncomfortable one. But passing an estate on in the most efficient manner possible is a tough thing to manage. Especially if you haven’t had at least a general conversation about where your money is, how to get to it and — just as critical — how to minimize the taxes on various types of investments when they’re inherited. Therein lies the potential issues, because not all assets are inherited the same and, therefore, are not taxed the same.
Unfortunately, I’ve found many parents don’t know the answers themselves to be able to discuss with their kids. It may be necessary to educate yourself before you can share this information with your family. Here are some things you and your kids should know about.
Written by Matt Hausman, founder and president of Old Security Trust Corp. and Old Security Group, a Registered Investment Advisory Firm.
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
