Besides all those other things you try to impart to your child during parenting, it is important to also pay attention to dealing with money. This especially means that children should learn to make ends meet with the money they have. When it is expected that children will inherit a large fortune, it is also important to teach them how to deal with it.
This will often mean explaining that despite the large fortune, it is not the intention to just buy everything. Because if you have nothing you can't buy anything, the learning process will be better if a child already has some assets. This starts with pocket money, but at some point it will have to be more.
Preventing problems
It is also important to learn how to manage your assets. What it means if you just leave it in a savings account. Whether it is useful to invest it and if so, in what? Shares, bonds, real estate or other things? By working with a child on this early, say when they are 16, you can see what your child likes and dislikes and can and cannot do. Should it turn out that a child does not like it or will do the wrong things, you can also take measures for the other assets to avoid problems in the future.
Fun
In practice, many parents enjoy investing with their children. We can shape this through an investment partnership, a joint account fund or certification of assets. Within such structures, it is possible to expand freedom further over time, depending on the wishes, or conversely to limit it based on experience.
Saving tax
As part of this learning process, assets are gifted to children. These gifts save inheritance tax at death. In this respect, two and perhaps three birds with one stone. Your child learns something, you learn what your child is already able to do and not yet able to do, tax is saved and if you enjoy investing together, you also have some fun together.
For more information on investing together, please get in touch. We will be happy to help.
pkooijman@kooijmanautar.nl
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