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The idea of passing on your accumulated wealth to your kids , however modest the sum may be, is to many of us an integral part of the way we think and our natural life cycle. However, with average life expectancy increasing all the time we have to add our own needs for a comfortable retirement to the debate. Most of us would do almost anything for our kids, and that includes sacrificing our own financial comfort zone to secure an education for our children or provide for their specific needs. Many parents continue to help their children financially even into their adult life, diverting money to their kids that could make a worthwhile contribution to their own retirement. You help your children while as best you can while you are alive but what about when you are gone ? If, despite the strains on our finances we have managed to build some wealth throughout our life, should we then pass that money straight on to our children ?
There is no easy answer to the question, but to a certain extent the amount of money you have saved is relevant to what you should consider doing with it. We are all aware of stories of spoilt kids showing a blatant disregard for the money that they have been given but in most families The famous investor Warren Buffet is quoted as having said “wealthy parents should leave their children with enough money to do anything they want but not so much that they are doomed to do nothing at all”. As a general rule of behavior, how you were raised and how you have subsequently raised your kids will certainly dictate how you feel about the subject and also how you came into your wealth. While most of us will only have a modest sum to pass on in comparison to Mr Buffett, most of would probably like to have enough to help our kids with perhaps a down payment on a new home or some capital to start a business with. Very often our kids mirror our own outlook on life and financial habits, so if you have raised your children with a frugal attitude and values they are more likely to be sensible with your inheritance.
So to answer the question, do we have to leave money to our kids ? No of course we don’t, but we may feel a moral obligation to help our children and actually it feels good to see your kids benefit from your generosity, just make sure you have enough to see out your retirement, and any surplus fund you have will no doubt be gladly accepted by your loving kids !
About the author: This guest post is written by Charlotte Watson on behalf of Wonga