When you die and leave money to your children, you won’t be around to guide them or see whether they use it wisely or poorly. However, you may already have an idea of how each child will fare. What can you do if you believe one may squander their share?
Disinheriting is usually not the best option
Some people choose to disinherit a child with no financial self-control. They would rather the money go to someone who will use it well than see it gambled away or ‘wasted” on needless material goods. Alternatively, they may choose not to leave anything because they fear the child may use that money to feed an addiction to drugs or alcohol that ends up killing them.
The problem is that disinheriting someone may lead to further problems. Maybe it causes a falling out between the disinherited child and their siblings who did receive something. Or perhaps it leads to the child assuming you are doing it because you do not love them, which could cause them to plunge further into their addictions.
A trust is usually a better option
If you do not trust your child to use the money wisely, you can have someone else take charge of the money by putting it in a trust and appointing a trustee. They will release the money according to the rules you set. For example, if your child has a drug habit, you could rule that they will only receive money if they attend rehabilitation and stay clean for a certain period. Or, if they are just bad with money, you could make smaller payouts at regular intervals to avoid them blowing it all at once.
Learning more about the options available can help you make appropriate choices about your estate.