By Tamia Gallego
Most of us don’t like to talk about our own death, or the death of our loved ones. The fact of the matter is we’re all eventually going to die whether we like it or not and when we do, it might be a burden on our loved ones.
Two of world’s wealthiest people, Bill Gates and Warren Buffett have stated that they will not be leaving their fortunes to their children. They have instead planned a trust fund to pay for their children’s education. This is an open choice, but perhaps you want to leave your family with an estate that is a bit more substantial and will take care of them financially.
Lately my husband and I have been thinking about estate planning as recently our financial advisor stated it was one matter that we needed to look into.
In his previous life back in Canada, my husband worked at a funeral home while he was studying at university. If anything he said he remembers most, is that estate planning was paramount. Many times people came to the funeral home completely distraught from the death of their loved one, and they had to deal with making arrangements and paying for the funeral. Not only that, there was the estate to contend with, which can sometimes tear a family apart, if there are no clear directives from the deceased and their estate.
Currently we are a couple with a young family and a small amount of debt. We raised some funds from our family to help us bootstrap our business . We have investments which we expect to grow over a longer period of time and therefore increase our net worth.
Our retirement goal is to have an investment portfolio with a mixture of shares and property that we can live on when we stop working. We’re aiming to have assets to leave behind to our children to assist them and their family.
Many baby boomers bought their first home when it was about $100,000 for a house. Now, for the same home it’s probably worth $1-2 million in most major cities in Australia. Some baby boomers worked hard to get where they are now, and they have enjoyed exceptional appreciation in real estate.
I think it’s great for baby boomers that they can enjoy retirement and do the things they want to do. The hope for most of us is to also be in the situation where we can enjoy the twilight years, free of financial stress.
There was an article I read recently that highlighted that in thirty years from now, when we’re in our sixties, it will be extremely difficult for our children to save up enough money for a deposit for a home. It is even difficult now for some people to save enough deposit for a home, as property has become scarce, and the inflation levels at a new high.
Let’s say we heed the advice of our financial advisors and look into our estate plan. What are some of our options?
If Bill Gates and Warren Buffett are not leaving their fortunes behind to their children, it makes you wonder whether you should be leaving any money to your children as well. The last thing you want is to take away their aspiration to succeed on their own.
As everyone is different, I wonder what plans you have with your estate. Do you plan on leaving any or some money to your kids, do you intend to spend it all or do a bit of both? Ultimately the decision is a personal one, and yours to make with your partner.
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