Grief Can Lead To Ill-considered Choices
Losing a parent is one of the most difficult life events most of us will ever have to deal with. Making decisions, when suffering from grief, can seem impossible. Our judgement maybe clouded, and we may act out of character. This can prove quite damaging, including making some bad financial decisions with long term consequences. With support we can make better decisions, and with time get through this time of grief.
Those who suffer the loss of a parent as a young adult can often find making decisions during this time the hardest. Children will, of course, not be required to make any financial decisions. And as we grow older our life experiences help us make better decisions even in times of great stress. As Clare Seal, financial coach, discovered, inheriting a large bequest as a young adult can lead to ill-considered choices, as her article in the iPaper explains.
Advice On How To Avoid Bad Financial Decisions While Grieving
Clare’s reflections in this piece illustrate how difficult it can be to make financial decisions during a time of grief, something we completely agree with here at Simpler Law. At the end of the article she also gives the same advice that we would. Delay making any big financial decisions until the grief has eased. No matter how long that takes. Seek proper guidance on how best to use your inheritance and protect it if necessary. Make a proper plan. Avoid ‘blowing’ it through ill-conceived decisions. Money will never replace a parent, yet no parent would ever want their child to risk their inheritance through bad financial decisions.
Prepare Children With Calm Discussions
No loving parent wants their children to be in a situation where bad decisions are made through grief. They want the best for their children, even after they have passed away. Clare Seal’s father would not have wanted her reflecting on her financial decisions with recrimination or believing he would be disappointed in her.
Can parents do anything to help their children should they find themselves in a similar situation? No one can predict how someone else will react to the loss of a loved one. That said having a calm conversation about death, the Estate Planning you have in place, and what you wish for your child when you have passed, is very much advised. Misunderstandings can be solved while it is still possible to do so.
How Estate Planning Can Help Avoid Bad Financial Decisions
On a more practical note, there are things you can consider regarding your Estate Planning. Make sure your wishes are as clear as possible in your Will. In honouring these wishes your beneficiaries could easily avoid bad decisions. Alternatively, you can choose at what age your children inherit. This gives you the option to pass on your estate to your children when they are older and less likely to make bad choices.
Upgrading your Will to include a Residuary Discretionary Trust allows you even more opportunities for guidance and control. The Trust can be set up with restrictions based around beneficiaries’ personal circumstances. Inheritances can be passed on after marriage, the birth of a child, or even after a divorce. In some cases, Trusts like these have also been used to protect a child’s inheritance until after they are free from bankruptcy or drug addiction.
Losing a parent, or leaving a child while they are still young, is never going to be easy. Nothing can fully prepare anyone for an event like this. Yet, a little planning can make things slightly easier in the long term.
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