.
. The “Oracle of Omaha,” who has amassed a $150 billion personal fortune, has three children.
in the letter. “You don’t want your children asking ‘Why?’ in respect to testamentary decisions when you are no longer able to respond.”
More from Personal Finance:
Thanksgiving meals are expected to be cheaper in 2024
How Trump’s win could change your health care
Remote work is helping Americans take longer trips
‘Tough conversations’ that ‘strengthen relationships’
, a certified financial planner, agreed with Buffett’s advice to reveal your estate plan.
.
You want your children to have realistic 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.
In his letter, Buffett recalled that over the years 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.
, founder of Life Planning Partners in Jacksonville, Florida.
You might ask the well-off child, McClanahan 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.”
When ‘sharing that information can be damaging’
.
“When you’re creating your estate document, ask your children in advance what’s important to them,” McClanahan said. “That way, you can keep that in mind.”
In rare cases, it’s best for parents to withhold certain information in their will, McClanahan said.
For example, she would recommend a parent be more cautious if a child has exploited them financially. Meanwhile, if a child is irresponsible with jobs or money, learning that they stand to inherit a lot may further erode their work ethic and ambition, McClanahan said.
“If you have children who are not mature, sharing that information can be damaging,” she said, adding that she may recommend clients in these situations write a letter to their children, which they won’t see until after they’ve died, explaining their estate decisions.
“Every family is different,” McClanahan said. “That’s why there should be no set rule.”
