A reader wrote to me asking for advice about leaving money to his children. His daughter, married with two kids of her own, has never proven to be the most responsible with her finances. In fact, she and her husband had to declare bankruptcy. His son, on the other hand, had always done a good job with his finances, albeit as a single man with fewer responsibilities.
The reader’s dilemma was that the portion he was planning to leave his daughter he felt would be flittered away before his body was cold. To address that he thought he’d divide the inheritance in a way that would protect his grandchildren: his daughter’s half of his assets would not go to her but would be split with a trust in each of her children’s names. Protecting the grandchildren that way is certainly a noble goal and might just work.
On the other hand, it’s evading the real issue: his daughter’s financial irresponsibility.
So without knowing the dynamics of his family or yours, for that matter, it does seem to me that a conversation is in order. Or rather, multiple conversations are in order. You're starting a dialog that will last some 20-30 years, assuming you’re 50+ and that your life expectancy is in the normal range.
The other thing that jumps out at me is how he described his son: "not married and handles money fine." Now? Always? Tomorrow? What about if he has a family? What about if he and his partner run into financial difficulties have to declare bankruptcy? Not likely, I'm sure. But stuff happens.
Inheritance is not just about money, is it? What do you want for your daughter? How can you best achieve that? What can you do now to help her achieve her goals? Does she even have goals?
Lots of questions, lots of unknowns, not just on my part, but probably on yours too. As I said, I think inheritances and legacies require having conversations. My daughter and I talk a lot. Often, and we try to be honest. We both want to remain close. We both acknowledge that we love each other. So we just keep talking. And that reassures my wife and me that we’re doing what we can while we’re alive to take care of our children and grandchildren once we’re gone.