As a parent, you will be delighted to see your children financially stable and happy as you would like them to accomplish all their goals at every stage in their life. Be it education, marriage or setting up a new home, parents have a huge responsibility for their children in India.
To ensure the financial well-being of your children, let us learn about five financial gifts one can leave for their family.
Creating wealth is important. But you need to ensure that after you, your wealth goes to the right people and they’re able to put it to good use. A will or testament is a legal document that lays down terms for the distribution of your wealth after your death. Writing a will and testament is an important act to ensure your wealth passes on to the right people in the way you intended it to. Most people create their will in favour of their children or spouse. However, some choose to dispose of their properties among all their legal heirs as per their shares. It is not mandatory to create a will but if you do it and get it registered, there will be a lesser chance of your family members disputing over their share of your wealth. A registered will can help your children avoid legal disputes and get the clear title of your property. After creating a will, you can also make changes as and when you feel the necessity. You can even include or remove beneficiaries from it.
Life insurance is important to financially safeguard your children. You will take care of your family as long as you’re alive. But in case of your untimely death, it will be difficult for your children to deal with the financial fall-out. A term insurance can help cover the income your family will lose, ensuring that your family faces no financial strain. They will be able to meet their income needs and your children’s progress will not be disrupted. You must also upgrade your coverage periodically to make it match your increasing life risks and family’s income needs.
Did you know you can add your newborn child to your health policy? You must not miss this chance. Medical inflation puts our health at risk, and you should not deprive your children of good health facilities. Including your child in your health policy will also allow them to get the benefit of switching to their independent health policy at an eligible age without undergoing any health check-up and waiting period.
It is advisable to keep your children aware of your financial decisions and how you take them. It will educate them, and they will learn to apply the knowledge in their own lives. It can help them learn about personal finance. They will also be aware of your financial position including your debts and assets. Your untimely demise should not become an event for creditors to start hounding your children and other surviving family members. If you involve your children in your financial decisions, they will understand your financial limitations and also try to adjust their expectations.
Debt is an obligation, and you don’t want this obligation and the attendant stress passing on to your children. Whenever you take a loan, make sure you have provisioned cash or have life insurance to ensure the loan is paid off in your untimely demise. Without this, your liabilities will pass on to your children. The ideal thing to do would be to repay your loans on time and avoid debt that overleverages your financial capacity. Passing a debt-free legacy to your children can help them multiply your wealth and remember you as a worthy parent.
Apart from these financial gifts, you can do a few more things for financial stability of your children. For example, you can plan your retirement in such a way that you don’t have to depend on your children to meet your expenses.
You can teach your children about the benefits of investment at an early stage in life and let them learn about personal finance. These financial gifts can instill confidence in your children to become financially independent, making your job as a parent easier.
