At Total Financial Solutions, President/CEO Arif Halaby believes that if parents decide to leave an inheritance for their children after they pass away, there’s one thing they should always do first.

“If your goal is to give your kids a head start in life, then consider starting as early as possible with financial literacy,” said Halaby, a Certified Estate Planner. “Teach them how money works, teach them the understanding of the trade off — money is nothing more than a source of effort.”

By properly educating children on the basics of the financial world, they will be more likely to successfully manage their inheritance in the future instead of squandering it in the first few years like most people tend to do, according to Halaby.

Related: Total Financial Solutions: Have You Finished Running The Financial Race?

For instance, Halaby recently had a client who had inherited $300,000. Because he hadn’t been properly educated on finances, the man ignored Halaby’s advice to meet with a CPA about the best way to “drip” the money out so he could stay underneath a particular tax bracket and keep the majority of the money — instead withdrawing a $70,000 lump sum to buy a brand new truck and paying an exorbitant amount in taxes as a result.

“This drives me crazy,” Halaby said, noting that part of the problem with a large inheritance is that there is no emotional attachment to the money because it wasn’t earned by the beneficiary.

“He said, ‘Well, Arif, this is how I look at it: I don’t look at it as if I have $300,000 that I could never touch,’ — he uses the word ‘never’ as if that’s true — ‘I look at it that I have $70,000 in my pocket,’” Halaby recalled. “I said, ‘I know, but you’re paying money in taxes.’ (He said,) ‘It doesn’t matter. It’s not as if it’s my money. It was never my money.’”

In contrast, another client of Halaby’s — a married couple who was preparing their estate after both husband and wife were diagnosed with terminal cancer — came up with a plan that not only incorporated financial education into their children’s inheritance, but created an emotional value for the money as well.

Before becoming established in their careers, the couple had lived in a small apartment, using crates as a table and chairs, sleeping on the floor and making a number of other sacrifices while they saved up money.

Once the husband had passed away and the wife was on hospice care, she decided to make a video for her five children with Halaby’s help.

“I said, ‘Would you just tell me what you and your husband had to do? Because you’re going to leave this money to your children and your grandchildren, and they have no clue what it was like back then to struggle,’” Halaby said. “So she proceeded to tell us the stories.”

After the wife had passed away as well, Halaby fulfilled her wish to bring her children and grandchildren into his office to watch the video, get their own copy to take home, and go over basic money concepts with them.

“Their goal was to make sure their (children and) grandchildren were educated and didn’t just spend (the inheritance) on junk,” Halaby said. “And it didn’t matter what (their) education level was. There were people that were very successful in that room that made six figures, and those that were still students and teenager-type kids that just got started. And all of them learned something.”

Halaby continued, “(That) impressed me so much that we thought, what a great idea to encourage you to do.”

Total Financial Solutions prides itself in helping its clients design a higher income strategy, protect their principal and lock in their gains, all while securing reliable income for retirement.

For a free consultation to see if you are on track, contact them by calling 888-99-RETIRE or by visiting their website www.TFSwealth.com.

Total Financial Solutions offers assistance with preparing for retirement in Santa Clarita and the surrounding valleys. Santa Clarita financial professional Arif Halaby, a Certified Estate Planner, and Total Financial Solutions staff work with people of all ages, helping them protect, grow and preserve their assets through an individualized approach. As a well-known financial professional, Arif Halaby is also the host of “Total Financial Solutions Safer Money Hour” on KHTS AM-1220. Launched in 2004, the show offers listeners retirement planning tips and guidance for dealing with today’s ever-changing financial needs.  

Total Financial Solutions, Inc.

24322 Main Street

Newhall, CA 91321

661-753-9683

800-990-7344

Total Financial Solutions – Newhall

https://www.youtube.com/watch?v=lp-NOo90Stk

Arif Halaby, Total Financial Solutions, Financial Planning, Planning for Retirement, Retirement Planning