Here's an interesting question to ponder, as a parent: Let's say you happen to be "ultra-rich." (No, I didn't make that term up.) "Disposable income" is your middle name. Money up the wazoo. But of course, you can't take it with you, so where do you want it to go when ... well, when YOU go?
The obvious answer would be to leave your beloved children a sizable inheritance. Right? I mean, I'll admit I'm not "ultra-rich," but I've always thought part of the point of BEING ultra-rich is having the ability to provide for your family for generations to come. Or maybe not. Because according to a report from U.S. Trust, Bank of America's private wealth management division, some 32 percent of the super-wealthy "don't feel it's important to leave an inheritance for their children."
Why? Well, some folks planned to donate their money to charity, which is cool, while others figured most of their funds would end up paying for the medical expenses of their old age anyway. But apparently the majority of people who took part in the study didn't want to leave their kids an inheritance because they felt that "each generation should earn its own wealth."
Okay, I kind of get this on an idealistic, teach your kids self-sufficiency, nobody gave me any hand-outs level. Learn the value of hard work, blah blah blah. But what if the economy gets even worse and earning wealth becomes an impossibility? What if unforeseen circumstances arise -- illness, natural disaster, a zombie apocalypse -- and your kids are left high and dry through no fault of their own?
Personally, I think Bill Gates has the best approach (well, he is sort of a smart guy). He's said that his children "will be given an unbelievable education and that will all be paid for. And certainly anything related to health issues we will take care of. But in terms of their income, they will have to pick a job they like and go to work."
Naturally, since their dad is Bill Gates, his kids will probably have way cooler job opportunities than the average young adults. But the concept still applies. Like I said, I'm not ultra-rich, but I hope to be able to provide education (it may not be unbelievable) and health care for my kids, too.
And an inheritance, if I can.
Do you think the ultra-rich should leave their kids an inheritance?
Image via David Beyer/Flickr
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Comments 27
I was taught from an early age to work with our money responsibly. When I got a car in high school i had to pay half of it in the two years between 16 and 18 - usually it totalled to about 100 - 200$ per month. And we had to pay ALL of our gas ,we were expected to get a job and keep the job. My parents paid for our college educations through funds set up with the Texas for Tomorrow fund and such that both my parents and grandparents put money into...if you want to give your children money, spend it on them in the form of a college education or something useful...dont just give them oodles of money to live off of and not work. Our condition to keep our college fund was that we also had to work to pay for our off-campus housing and gas and bills ourselves since we didnt have to pay for college or get student loans.
Now that my grandmother is getting older we all tell her - its your money, you and papa earned it YOU spend it! Money didnt give me the memories that my grandma gave me...
Money didnt make me a better person...they worked hard to earn it and they deserve to spend it. I will always have the memories they gave me and if I took any thing from them? I would want a piece of furniture or some type of physical family heirloom in the form of furniture or something that is a memory for me...not money, money is just cotton and linen. it doesnt hold memories.
well my dh's parents are rich - they have a trust to pay for private education for ourkids, are happy to go as partners with a business, holiday home etc with us (providing they getto use it too!) we are also taking over the business - thats enough!!!! we don't want or need a lump sum etc.
The reason go in with us for a holiday home is so they can spend time away with the grandkids and give them a nice lifestyle - we ask they only give educational gifts so kids aren't spoiled - although they are def privilidged. Not trying to brag - just saying that it's nice to give the future generation a headstart but not a hand out
PonyChaser, that sounds like a private 401K plan.
I actually used that concept with my daughter when she was young to motivate her that she has unlimited earning potential (relative to a minor child). She performed tasks around the house earning flat fees. We never used the word 'allowance.' The prospect of a match from me acquainted her with real-world financial practices beyond piggy banks and savings. She now earns her own money, without my match, 'cause she's had a positive taste of reward for work, pay for performance.
As for inheritance? No one's owed. But I'll just say I see more that the ultra-rich parents lord it over the adult children for power and manipulation. It's bad news all the way around. Inheritance is meant to be the highest form of legacy based on love, passed on thru the bloodlines, securing future generations. If values were never taught, or the parents are on a lifelong power trip, it always ends badly, destroying those families instead. It's better to earn on your own and expect nothing, taking charge of your own destiny. The example of those values is the legacy that actually means something.
I'm sorry, but what selfish parents!! They procreate, and then decide to leave the children nothing? Normal middle class parents without the wherewithal to provide for their children a comfortable life after death fantize about winning the lottery so they can take care of their kids, parents, siblings, etc and set their kids up with a trust fund. The ultra rich, want it all for themselves! They don't even want to pay their fair share of taxes! sheesh!
I really have mixed feelings on this one. My grandparents have a lot of money, and they are very stingy when it comes to helping their kids. My dad always makes comments about what he'll get when they pass away, and how it would be nice if they starting giving out some of the money now. My argument is that while they are still alive it isn't an inheritance, it's THEIR money, and really they can share it or not share it as they see fit.
I can understand the point of view that people don't want their kids to feel overly entitled, but I guess I also think that if your parents have a lot of money it would be nice if they could help out their kids once in a while.
They can do what they want with their money. If they are so rich, certainly their kids will have access to many things other kids do not, any ivy leage education being one of them. So, I can see why about 1/3 of these parents do not feel an inheritance is necesary. I once worked for a very nice girl whose rich daddy bought her the buisness. He was so proud of her. She sold it a year later, lol. I'd be more proud of a child that did things on their own.
if someone is rich yes by all means I think they should leave there kids a cushion to lean on
I'd leave it all to my kids.I would of course make sure they received an education first and such(Maybe stipulate something in the will),but I think that is kind of cruel to not leave your children anything...
The biggest favor the Ultra Rich could do is just not have those kids in the first place,save the world from more sheltered assholes. And before you go on some blah blah rant,save it .You know I'm right.