If you have generated a significant amount of wealth Over the course of your life, you may begin to think about what will happen to him once you are gone. You can donate it to a good cause or pass it on to your children. But what if you want to give them some of your wealth now before you pass away?

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With the Great Transfer of Wealth underway, it is expected that by 2045, approximately $84 trillion will be passed from the Silent Generation and Baby Boomers to their children. And much of this will be done as a living legacy.

This enormous transfer of wealth has sparked a lot of debate about whether or not leaving your children a living legacy is a good idea. Read on as we look at some reasons why retiring baby boomers shouldn’t leave their children a living legacy and some reasons why they should.

Why you shouldn’t leave a living legacy to your children

Risking your own financial security

It is common to want to see your children succeed. This is true not only for their career but also financially. Watching them experience things like buying a house or traveling the world can bring you personal satisfaction because you can witness and enjoy their success.

However, you also need to think about your own needs. If you are considering passing an inheritance to your children during your lifetime, it is important to do so carefully. What happens if an unexpected expense arises? Are you still going to have the funds to continue living your current lifestyle?

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Family resentment

If you have multiple children for whom you are considering leaving an anticipated inheritance, you should do so with caution. It’s easy to leave some cash and know that the distribution is even. But what if you’re considering leaving someone a business or real estate?

These types of assets can have fluctuating values ​​and if a dependent receives something that increases in value, it could cause tension within the family. Not just between siblings, but also between you and them.

Potential for financial irresponsibility

Let’s be honest with each other. Sometimes people make bad decisions when it comes to money. Lifestyle inflation is a reality and can have serious consequences. When people receive extra money, whether it’s a raise in salary or an inheritance, they feel freer. They want to go out and treat themselves to something they wanted but couldn’t afford. And while this is acceptable to a certain extent, there needs to be some restraint.

Without proper discipline, anticipated inheritances given to people who may not be ready to handle larger sums of money could end badly. This is when it may make more sense to place the funds in a trust where you can have more control over how they are used while you are still alive.

Why you should leave your children a living legacy

Potentially reducing inheritance taxes

Depending on how you establish your estate plan, your assets may or may not go through what’s called probate after your death. Not only can this be a lengthy process, but it can also trigger inheritance taxes, which will reduce the inheritance your children can receive.

Instead, giving your children a living inheritance can put you in control. You can strategically gift assets to each dependent, which will help reduce the estate taxes they may have to pay.

Help your children today

It was mentioned earlier that as parents we want to see our children succeed in everything they do. Fortunately, we have a lot of control over this. We can teach them the difference between right and wrong. We can save money so that if they want to go to college, they don’t have to end up with huge student debt hanging over their head. Or we could simply help them out of a difficult financial situation.

Let’s be real, some younger generations, especially millennials, have faced their share of problems. At the start of their careers, many of this generation had to face the financial crisis. Many have watched from the sidelines as real estate prices skyrocketed to unaffordable levels and remember living through a pandemic.

All of these things have contributed to some struggling to achieve financial success. However, leaving your children a living legacy can not only help parents enjoy the wealth they have created, but also help their children find some financial relief.

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This article was originally published on GOBankingRates.com: 3 Reasons Retiring Baby Boomers Shouldn’t Give Their Children a Living Inheritance