Rav Yishak Yosef, in his Yalkut Yosef (Honoring Parents, p. 431 and onward), discusses the importance of blessing one’s children. He emphasizes that parents should always be accustomed to blessing their children, particularly on Shabbat eve, and, even more so, on the night of Yom Kippur.
Indeed, there is a widespread custom for children to kiss both parents’ hands on Friday night and receive their blessing. The reason for this custom is the concern that the children may have perhaps angered the parents over the course of the week. Children should therefore kiss their father and mother’s hand on Shabbat eve after Kiddush and receive their blessing. Even a married son who lives in reasonable proximity to his parents should go to their home on Friday night to kiss their hand and receive their blessing, even if this will delay his recitation of Kiddush. This is especially important if one’s mother is widowed, Heaven forbid, in which case he must go to her home to recite Kiddush.
If one’s wife objects to this custom due to the delay it causes, the husband should explain to her the importance of this Misva. If she still objects, then he should consult with a Halachic authority for guidance.
When parents bless their children, it is customary to recite the fifteen words of "Birkat Kohanim" (the priestly blessing – "Yebarechecha Hashem Ve’yishmerecha…"). The work "Keter Shem Tob" (p. 212) writes that the parent places his palm on the child’s head while reciting this blessing because the hand has fourteen joints, and so together with the palm he places fifteen joints on the child’s head. This act is thus symbolic of the hope that the fifteen words of "Birkat Kohamim" shall be bestowed upon the child’s head.
During the seven days of mourning, Heaven forbid, one does not bless his children on Friday night.
Finally, one should accustom his children to kiss the hands of his parents, Rabbi, and Sadikim, and to receive their blessing. The Yalkut Yosef mentions that this is indeed the prevalent practice among Sepharadim. The Hid"a (Rav Haim Yosef David Azulai, 1724-1806), in his work Shem Ha’gedolim, records a tradition that before the death of the Rif (Rabbi Yishak of Fez, Morocco, 1013-1103), the Rambam (Rabbi Moshe Maimonides, Spain-Egypt, 1135-1204) visited him and received his blessing. Later, the Rambam reportedly attributed his wisdom and scholarly achievements to this blessing he received from the Rif. The Hida notes that this account is chronologically flawed, as the Rif passed away some thirty years before the Rambam’s birth. He therefore suggests that this tradition actually refers to Rav Yosef Ibn Migash (Spain, 1077-1141), a student of the Rif and teacher of the Rambam’s father. In any event, this account certainly underscores the significant and effects of blessings received from great Torah figures.
Summary: Parents should be accustomed to bless their children at all times, particularly on Friday night and the night of Yom Kippur. It is customary on Friday night for parents to place their hand on the child’s head and bless him with the "Birkat Kohanim." Parents should also accustom their children to receive blessings from parents, his Rabbi and great Torah personalities.