. Warren Buffett has advice for all parents:let your adult children read your will before you sign it.
.”Be sure each child understanda both the logic for your decision and the responsiblilities they will encounter upon your death, ”Buffett wrote in a letter Monday.
Warren Buffett has advice for all parents “whether they are of modest or staggering wealth”: let your kids read your will before you sign it.
“Be sure each child understands both the logic for your decisions and the responsibilites they will encounter upon your death,” Buffett wrote in a letter Monday. Tha “Oreacle of Omaha, ” who has amassed a $150 billion personal fortune, has three children.
“If any have questions or suggestions, listen carefully and adopt those found sensible,” Buffett said in the letter. “Your don’t want your children asking ‘Why?’ in respect to testamentary decisions when you are no longer able to respond.”
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‘Tough conversetion’ that ‘strengthen relationships’
Douglas Boneparth, a certified financial planner, agreed with Buffett’s advice to reveal your estate plan.
“These are tough conversations to have, but they’re meaningful and when approached correctly, can strengthen relationships,”said Boneparth, who is founder and president of Bone Fide Wealth in New York City and a member of CNBC’s Advisor Council.
You want your children to have realistric expectations about their inheritance, Boneparth said.
“Kids’ imagination can run wild with what they think they should be getting,” he said. As a result, you should be as clear and thorough as possible about who will receive what and why.
People might worry about hurting their kids’ feelings, or hearing from one that they think something is unfair. Well, that’s exactly why you want to discuss it, and not “punt that mess for when you’re not around,”Boneparth said.
“Kids’imagination can run wild with what they think they should be getting.
In his letter, Buffett recalled that over the year he witnessed “many families driven apart after the posthumous dictates of the will left beneficiaries confused and sometimes angry. Jealousies,along with actual or imagined slights during childhood, became magnified.”
If the inheritance is not split equally between siblings,you’ll want to explain why, Boneparth said. Maybe one child will receive more because another got help with a down payment on a house or attended a far more expensive college, he said. A child with a spending problem might inherit a trust, Boneparth added, in which they receive their bequest in regular installments.
If one child is in a much better financial situation than another, you might explore with the more comfortable one if they’d be OK with you leaving them less, said CFP Carolyn McClanahan, founder of Life planning Partners in Jacksonville, Florida.
You might ask the well-off child, Mc Clanahan said,”’Do you really care how I leave our assets? Because your brother is an artist and could use a little more help.’”
“That way that child is not slighted when they actually find out,” she said.
In Buffett’s letter, he writes: “There is nothing wrong with my having to defend my thoughts. My dad did the same with me.”