Can I exclude my children from my will for doing something against my will? Concretely, if one of them wants to start a business, but I prefer that he has a stable job for someone else?
I’m a failed entrepreneur myself, but since then I’ve gotten back on my feet. It would hurt me if my children failed at something they worked so hard for. I don’t want them to make the same mistakes I did.
Let’s be clear about your mistake: you took a risk and built something. You worked very hard, but still failed. And yet, despite all this, you are still standing.
You can remove your children from your will for any reason (or no reason at all). But that’s not something I would recommend unless they’ve done something really egregious.
Think about the message you want to send to your children. Is it never to take risks? Is it never trying too hard because you might fail? Is failure so shameful that you can never recover from it?
It doesn’t matter how good your relationship with your children is during your lifetime. The reality is that if you disinherit your child because you disagree with their career choices, it will forever taint their memory of you. Moreover, if you remove a child from the will while leaving an inheritance to the other children, the risks of family conflicts become particularly high.
There’s a lot I’d like to know here, including your kids’ ages and whether they’ve actually caught the entrepreneurial bug or if you’re just hoping to preemptively crush it. But I think you can set up your estate to put some safeguards in place for your children without completely removing them if they choose to start a business.
One option would be to create a revocable living trust for the assets you plan to distribute by will. This would give you better control over the distribution of your assets upon your death.
For example, you may be worried that one of your children would put their entire inheritance into some wacky business venture if they received a large lump sum. You could create a trust so that they receive annual distributions after your death instead of receiving all the money at once.
This may not prevent them from becoming entrepreneurs. But at least they wouldn’t have access to a lot of money at once. They should probably continue working in traditional jobs for at least a while to establish a safety net. This can make them less likely to take big risks. People tend to be a lot more careful with the money they’ve had to work for.
Some people take it a step further by attaching specific strings to distributions. For example, if your children are still young, you might require them to graduate from college to get payment. This would not exclude the possibility of entrepreneurship, but at the very least, having a diploma facilitates the search for a traditional paid job.
However, even the best parenting and estate planning will not protect your children from failure. We will all fail many times in our lifetime. What stands out about the most successful people is not their absence of failure. It’s that they fail quickly. They learn from their failures.
Ask yourself if there are any specific mistakes you think your kids could learn from. Perhaps the lesson is not to avoid risk, but to manage risk carefully. Or maybe you can shed some light on the realities of being a business owner. Many people learn the hard way that being your own boss isn’t so glamorous.
A brutal approach risks backfiring. Think about what you want your legacy to be. Do you want your children to remember you as the parent who, even in death, controlled their career choices? Or as a human being who made mistakes and gained wisdom in the process?
The instructions you leave in your estate plan will become your last words. Choose them carefully. The lessons you can teach your children now are far more valuable than those you send from the grave.
Robin Hartill is a Certified Financial Planner and Senior Writer at The Penny Hoarder. Send your tricky money questions to [email protected].