Encourage Children to Handle Inheritance Responsibly

Billionaire Warren Buffet believes you should give children “enough to do anything, but not enough to do nothing.” Baby boomers have large amounts of wealth that they’re planning to pass on to heirs, but there are concerns that these heirs won’t be able to handle the wealth responsibly.

In response to these concerns, a recent article published by the Fiscal Times lists five things to consider when creating a trust fund:

1. Make a gift to an irrevocable trust while the gift-tax exemption is still $5 million.
2. Stagger when a child receives the inheritance.
3. Encourage good behavior instead of penalizing bad behaviors.
4. Gift property that is artificially low now.
5. Leaving letters or videotapes to children might be better than leaving the children money as it could encourage children to work as hard as the parents did to become successful.