It is not unusual for "baby boomers" to be still supplying financial assistance to their grown children. This dependency can be detrimental for both parties, because parents might be sacrificing funds that they should be investing for their retirement years by supporting their children.
Meanwhile, the children may become overly reliant on their parents generosity and never truly stand on their own two feet. However, cutting the cord is sometimes not an option because your children or grandchildren might really need the money.
Fortunately, some parents are in a position to help their children without jeopardising their retirement - they can simply share an inheritance. In other words, they can gift their children money or property now that they would have inherited in a will.
When and How To Share an Inheritance
You should be very careful when sharing an inheritance, because if done incorrectly it can lead to stress and serious legal troubles in the future. Fortunately, there are some steps that you can take to reduce the stress and risk involved, including:
Setting up a Trust
A potential way to help your family and avoid future conflicts is to set up a trust savings and/or investment account for the benefit of your family.
To setup a trust savings account for your children, identification for both parties is needed. You will need a membership and an account with Holiday Coast so your account and your child’s trust can be linked on our system. The money can be handed over to the child or children(the beneficiary) at any stage, so it is important to get the timing right.
Again we encourage you to seek professional advice from your lawyer and your financial planner before making any such investment decisions or setting up a trust.
This article provides general information only and should not be relied upon as financial product advice.