Rant
Ultra-Rich Parents Refuse to Leave Kids an Inheritance & the Joke's On Them
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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the4mutts
I'm not sure I "get" what the point of this was now that I read it.
MomLily67
They have a great point!! I had a co-worker once, member of a whealthy mexican family and he would tell this story about when he was in Highschool and had become a total snob, showing off and putting people down. Until his parents got fed up, sat him down, told him they were loving parents and he was enjoying the money that was actually theirs, NOT HIS, and if we ever wanted to have any of it, he would now have to prove he was capable of adminstering it wisely. His car was taken away, had to work at least 30 hours a week at the family bussiness, cleaning, or running errands. No outings with friends. Well, that changed his ways, he is now a successful bussinessman.
Shannon
Jespren
mamavaness
Liz
chun
dreamsky
Whose Money?
PonyChaser
You would prefer, perhaps, that all of that money went to the government? I digress.
I see nothing wrong with either approach - with Chun's approach of "go, spend it all, it's yours!!" or leaving SOME for the kids - in the form of an opportunity.
But there are those kids who are given everything by their parents. Need a car? Here you go. House? Sure! We'll pay for your college, too! Lose your job? No problem, we'll pay your mortgage! And those kids get the "entitlement" mentality just like those who are on Welfare and not trying to get off (and they exist).
The secret lies in teaching true responsibility. Teaching them that this money is NOT theirs, that it is a gift, and they need to treat it as such and not expect it to simply be handed to them. I heard once from a lawyer friend of mine. He was appalled when he wrote a will for a very wealthy man (VERY wealthy) who wrote into his will that his kids will receive, as their inheritance, the equivalent of their annual salary each year. So if they make $10K/year at McDonald's, they get $10K from his estate each year. If they make $500K/year as a CEO, they get $500K from his estate.
I say that's the way to go, if you've got the money to do it. Teaches the kids that hard work is rewarded - and that the entitlement mentality isn't going to fly.