Why I'm Not Leaving Money to Family & How I Set Up My Will Instead
Today, I’m going to share with you what I did with my will, why I did it, and why I’m not leaving money to family in the traditional way.
Because I’m frugal, a minimalist, and I’ve achieved financial freedom, I started thinking about whether to leave my money to my loved ones. I needed to make sure my will made sense.
Most people seem to think that if you have money, you should leave it to your family. Personally, I feel differently. Where I put my money now reflects where I want it to go when I’m gone.
Leaving money to family
Historically and culturally, it's a thing for a family to inherit money from a relative’s will, but some families go crazy when money isn’t allocated evenly and it causes arguments. Also, if people choose not to leave money to dependents, then the will can be contested.
I’ve seen wills where the parents give money to their grandchildren, rather than kids, but that can cause problems too. If you're relying on an inheritance to come in, then you may not work as hard to achieve financial freedom.
I don't have children, but I do have siblings. However, they’re around the same age as me, so if I die when I’m 90, what’s the point in leaving them money they won't have time to use?
It's similar if you do have children. For example, if you pass away in your 90s, then your children could be in their 70s and retired already, so they should have saved enough money during their lifetime.
It's more important to manage your money well than receive an inheritance and if you can do that, then you don't need any inheritance anyway.
Leaving money to people who are not good with finances
My rationale is this: why would I leave money to people who are not good with their money? They probably won’t do anything good with the money I’d leave them. Would they blow it because they can’t hold onto their own money? I just don’t see the point in giving people money who don’t know how to manage it.
The biggest gift I could give to anyone is to show them how to not need to borrow money or be in debt. I’d show them how to be financially free and how to be more frugal so they can pay off debt.
Giving people money is not the answer; and if I wouldn't give someone money to solve their financial problems while I'm alive, why would I do it after death?
I don’t want to be controlling, and I’m not out to have anyone prove to me that they can be good with money, it’s just not okay with me to give anything to people who have already proved they can’t hold on to money.
Another problem with giving money to someone who doesn’t know how to manage it is that they get used to the idea of having extra money. They will spend beyond their means and then they won’t be able to get out of the lifestyle they’ve created with the money given to them, which can result in getting into debt. It’s like people who win the lottery and they are broke in two years because they can’t manage money.
Leaving money to charity
Alternatively, I could give my money to a charity. My chosen charity is wildlife protection. I'd rather help someone save an animal than give my money to someone who will spend it on pointless consumer goods that won’t make them happy.
So what does my will look like? In Australia, you can get a free will by going to a public trustee. I recently did that because it was easy. It’s registered and held there so if something happens, everyone knows where the will is located. The public trustee is the executor and even though it costs some fees, it’s a good third party. But in Australia, you can nominate two executors. If I didn’t have a will, my money would go to my immediate family.
I created a will with a testimonial trust in it. The trust makes sure my money will produce an income. My will can pay a few people some money until they aren’t around anymore and then the whole lot goes to wildlife. So a few people will get an income out of it and some money will go to wildlife at the same time. Many people will benefit, but when they're gone, the rest of the money goes to charity.
Communicating what's in your will
It could be shocking to people who assume they’d be in the will, which is why it’s important to have the conversation and tell them what’s happening and why. They need to know it’s not because you don’t love them.
I will also leave a note in my will explaining what my rationale was for what I did. I’ll also tell my family that I would hope I’ve imparted enough knowledge and wisdom to them that they wouldn’t need to rely on any funds I’d leave for them.
I also have stipulations in place. If any beneficiaries have debt at the time, they don’t get any money. If they don’t have debt, that’s fine.
How should you leave your money to family?
I’m trying to inspire the people closest to me and I hope I inspired you to think about your money. It’s more about education than just giving away things for free. Let me know if you are setting up your will and inheritances in an unconventional way, too.
Also, if you know where you can get wills done for free in your area of the world, please share that with us in the comments below.
LibraryKAT on Oct 20, 2022
I agree about leaving the money to family. It can change the family dynamics and not in a good way. I love my house beast, but will continue to fund people charities for the most part. I will leave my children something, but hope that their memories and the way they were raised will be the real legacy.
Annette on Oct 20, 2022
I have a TRUST, not a Will. It does not benefit me in any way, but it does protect my heirs from paying unnecessary taxes on their inheritance. I have left monetary gifts to many friends and a substantial amount to the Humane Society. The rest is equally shared by my two daughters. I hope all will be happy. If not, it won't matter because I will be gone.