How much money should I leave my kids?

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jackholloway
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Re: How much money should I leave my kids?

Post by jackholloway » Thu Dec 10, 2015 5:18 pm

Whenever I hear someone suggest that leaving too much money to their kids will ruin then, I ask why they think that their kids are made of lesser material than they were. I might suggest a trust to spread the delivery period out - handling money is a skill that can take time to develop, but at the end of the day, essentially all of it is going to go to our offspring. We are ok leaving some to charity in death as we did in life, but the intent is for my skill and lucky breaks to become the lucky break for the child to use to back her skill.

stainlessworks
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Re: How much money should I leave my kids?

Post by stainlessworks » Thu Dec 10, 2015 5:36 pm

At least 2 million

MathWizard
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Re: How much money should I leave my kids?

Post by MathWizard » Thu Dec 10, 2015 5:37 pm

I set up my will so that in the case my wife and I both died, a trust would take care of the money until they were 25.

Mostly because I could imagine what kind of trouble I'd have gotten into if I'd been handed hundreds of thousand when I turned 18.
I'd probably have died racing corvettes on county roads, and I was a smart kid.

I'd probably trust my kids now since the youngest will soon turn 21.

In fact, I think my kids would handle a few hundred $K better than I would have at their age.

We'll spend what we need, and whatever is left the kids will get. We will probably be donating along the way, likely to
scholarship funds as I needed a scholarship to go to college.

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HomerJ
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Re: How much money should I leave my kids?

Post by HomerJ » Thu Dec 10, 2015 5:50 pm

jackholloway wrote:Whenever I hear someone suggest that leaving too much money to their kids will ruin then, I ask why they think that their kids are made of lesser material than they were.
It appears to me that you are saying "Hey, you had $2 million, and it didn't ruin you... Why do you think it would ruin your kids if they had $2 million".

Well, I didn't get my $2 million until I was 50... I don't think it would ruin my kids to get $2 million when they are 50 as well.

However, I DO think it's possible that getting $2 million at 8 or 16 or even 22 might have negative repercussions. I think if I got $2 million at 8 or 16 or even 22, it would have had negative repercussions for me too.

So no, I don't think my kids are made of lesser material than me. I KNOW that I would have squandered a million dollars at 18... My kids actually might not... But I don't think it's a good idea for them to get that much money at that age.
I might suggest a trust to spread the delivery period out - handling money is a skill that can take time to develop
Well, there you go, you agree with those of us that think leaving too much money to their kids (at the wrong age) might "ruin" them.

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HomerJ
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Re: How much money should I leave my kids?

Post by HomerJ » Thu Dec 10, 2015 5:56 pm

Personally, I think being poor in your 20s really does build character.

Not poor poor. Not really poor... But American middle-class poor, where you have plenty to eat, but you live in a dump with 2 roommates, and you drive a crappy car.

Really helps you appreciate the good things in life later, when (hopefully) you have more money.

I don't think it's a good idea to buy a kid a fine luxury car at 16... Kid will never appreciate it... It's just "normal" to them. Sets a high bar.

miles monroe
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Re: How much money should I leave my kids?

Post by miles monroe » Thu Dec 10, 2015 6:10 pm

10% to charity, 90% to the kids is what i'm doing.

jabbahop
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Re: How much money should I leave my kids?

Post by jabbahop » Thu Dec 10, 2015 6:21 pm

MathWizard wrote:I set up my will so that in the case my wife and I both died, a trust would take care of the money until they were 25.

Mostly because I could imagine what kind of trouble I'd have gotten into if I'd been handed hundreds of thousand when I turned 18.
I'd probably have died racing corvettes on county roads, and I was a smart kid.

I'd probably trust my kids now since the youngest will soon turn 21.

In fact, I think my kids would handle a few hundred $K better than I would have at their age.

We'll spend what we need, and whatever is left the kids will get. We will probably be donating along the way, likely to
scholarship funds as I needed a scholarship to go to college.
I had a business school classmate who was from a very wealthy family. You would never tell that my classmate had a lot of money but his younger brother was a different story.

When the younger brother turned 21 he gained access to his trust fund and he immediately purchased a Porsche 911. Two weeks later he totaled it. He proceeded to purchase a new one which he crashed soon after trying to find our how fast the car would go in reverse. When he tried to get his third in a month, the dealer refused to sell him one telling him he didn't appreciate the car enough. I think he just went to a different dealer.

itstoomuch
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Re: How much money should I leave my kids?

Post by itstoomuch » Thu Dec 10, 2015 6:30 pm

We (65/68) have an Only (30). The Only, is doing well.

We recently received an inheritance that we converted to income property. I think that Only's grandparents would want this inheritance to eventually go their grandchild or great grandchildren.

I'll probably fund 529 now, as a tax abatement scheme. If his kids (0) are undeserving, then this asset will go somewhere else.
Haven't gone beyond these two ideas.
:sharebeer
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mmmarlowe
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Re: How much money should I leave my kids?

Post by mmmarlowe » Thu Dec 10, 2015 7:14 pm

Would like to plan on leaving my kids an inheritance. Am able to leave them a significant amount
But think it might do them more harm than good. Ideas?
Mark, I think your intentions are admirable. What with your decision already to give away 99% of your wealth to charity. And, of course, the thought that leaving only 1% to Max (out of the 45 Bil) might lead her astray. But then again, you might have another child, so the 1% would be split $275 million to each child. Being left with this minimal amount of money would probably strengthen her character like it did for the those who went through the Great Depression. There are those that would argue that you should not short-change your children and deprive them of their full inheritance. But I would argue that she will still be able to make-do is she carefully budgets her money and keeps her spending down to less than $3 million a year, inflation-based. :?

ks289
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Re: How much money should I leave my kids?

Post by ks289 » Thu Dec 10, 2015 9:35 pm

The money you are setting aside for your kids is very generous, and if you wait until you pass it will hopefully be in the distant future when they will be firmly established in their lives.
If you believe that they will be able to handle the money when they are younger, it may also be worthwhile to gift them money along the way for graduate school, weddings, home down payment, education costs for grandchildren, etc. It may save them from borrowing and ultimately result in more wealth for the family. Depending on your state and the amount, you may also avoid estate taxes.

Rajsx
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Re: How much money should I leave my kids?

Post by Rajsx » Fri Jul 31, 2020 12:51 am

A very informative thread, thanks
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novemberrain
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Re: How much money should I leave my kids?

Post by novemberrain » Fri Jul 31, 2020 1:23 am

HomerJ wrote:
Thu Dec 10, 2015 2:54 pm
Multiple people in this thread seem to think their children stop growing and maturing by 15 or so... They seem to think their kids are fully formed because of their impressive parenting skills.

They may be indeed be correct. But I think they may be wrong.

I know that I am a very different person at 46 than I was at 18, or even in my mid-20s.

A large amount of money handed to me at 18 or at 25 would have been squandered. I might have even dropped out of college, or switched to an easier major. It definitely would have changed the trajectory of my life. I might not have become a hard worker. I might not have the same pride in my skills and my accomplishments.

A large amount of money handed to me today would be invested and saved, and would change nothing about my personality. I've already accomplished things on my own, and know that I did it myself. It wasn't handed to me. There is danger in giving some people (some, not all) a lot of money early in their lives.

Of course, maybe a lot of money handed to me might have made me a better person... Maybe I would have become a harder worker by starting my own business and accomplished more! Who knows? All I know is that a large amount of money at an early age is very likely to have a huge impact on a person's life, maybe positive, maybe negative. A large amount of money handed to me today just means I retire earlier or I pass it on to fund my grandchildren's education. It wouldn't change my life or who I am very much.

The OP has college age daughters. I would set up a will to set up a trust for them if he died tomorrow. In 15 years, he could rewrite that will to just leave them the money outright.
This :sharebeer

I have been a hard worker my whole life. But I have never taken far out risks in my adult career.

If I was given a fortune when I was in my early twenties, I am pretty sure I would not have squandered it. But I would have certainly taken more risks with like maybe starting a business of my own etc.

If I am given a fortune now, I might still do that since I still have a couple of decades working career ahead of me. But it also might make me retire early.

Stoic9
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Re: How much money should I leave my kids?

Post by Stoic9 » Fri Jul 31, 2020 5:26 am

I have strong opinions on this. First you have to be certain how many children you have. Don't laugh, I'm confident I only have one now but for a while I wasn't certain as I left 'home' at 17 and traveled the world and hey it was the 60's. Second I think inheritance should only be left to children in equal parts if multiple children. You do not know how many 'grand' children you have (you may think you do but see #1). It should be up to your child(ren) how their children receive anything of value not you. DISCLAIMER: I have one child in their 30's and that child (at this time) does not plan to have children so its easy decision for me. I will say that I have a FIL that decided against my advice to give every grandchild money (at the time he believed he had 3 grand children). I did not agreed with the decision but did not stop it.

southwest_stacker
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Re: How much money should I leave my kids?

Post by southwest_stacker » Fri Jul 31, 2020 7:05 am

I figure at the current trajectory our net worth will be 8 figures when we croak. I plan on leaving 100% of it to our two kids, divided equally. I can’t think of any other thing or person I care more about than my kids so why wouldn’t I give it to them? If we die at the typical life expectancy age our kids will be in their 40’s. By that age they will likely have kids of their own and likely have their together. If they don’t I guess they will have one heck of a party. Even that would make me happier than giving the money to some charity.

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Re: How much money should I leave my kids?

Post by Jack FFR1846 » Fri Jul 31, 2020 7:15 am

Let me make a mathematical example. Say it's clear you're demented and required to go into a nursing home with $1,440,012 to your name. This is put into a non-interest producing account to gain a no-fee way to pay the nursing home. Nursing home agrees to keep the monthly cost to $12,000. You finally die exactly 10 years later and leave in your will to divide your estate between 2 kids. This is a fairly easy math problem and each kid gets $6.00. I didn't catch, but if you have 3 kids, it still works and each would get $4.00.
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smitcat
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Re: How much money should I leave my kids?

Post by smitcat » Fri Jul 31, 2020 7:24 am

southwest_stacker wrote:
Fri Jul 31, 2020 7:05 am
I figure at the current trajectory our net worth will be 8 figures when we croak. I plan on leaving 100% of it to our two kids, divided equally. I can’t think of any other thing or person I care more about than my kids so why wouldn’t I give it to them? If we die at the typical life expectancy age our kids will be in their 40’s. By that age they will likely have kids of their own and likely have their together. If they don’t I guess they will have one heck of a party. Even that would make me happier than giving the money to some charity.
While I tend to agree with you this thread is 5 years old FWIW.

Badger97
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Re: How much money should I leave my kids?

Post by Badger97 » Fri Jul 31, 2020 7:48 am

smitcat wrote:
Fri Jul 31, 2020 7:24 am
southwest_stacker wrote:
Fri Jul 31, 2020 7:05 am
I figure at the current trajectory our net worth will be 8 figures when we croak. I plan on leaving 100% of it to our two kids, divided equally. I can’t think of any other thing or person I care more about than my kids so why wouldn’t I give it to them? If we die at the typical life expectancy age our kids will be in their 40’s. By that age they will likely have kids of their own and likely have their together. If they don’t I guess they will have one heck of a party. Even that would make me happier than giving the money to some charity.
While I tend to agree with you this thread is 5 years old FWIW.
It's old, but still relevant for discussion.

Our approach is to give them the money while we are alive and we can both enjoy it. We considered the alternative and settled on this approach.

- We match them $1 for $1 for any money they earn into a ROTH IRA account. This starts when they start working at 15/16. They don't get a car to drive if they don't have a job. So, they get some work skills, they have some spending money, and they learn about saving. We will continue this after they get out of college as well.
- We agreed we'd pay for university. 100%. But, they have to get the grades to get in. Oldest son got into Top 10 Engineering school at Flagship State U. Very happy to pay. He still had a PT job through HS and has one now in his summer between university semesters.
- We will take our kids, and their families, on vacations every year. All expense paid. If they don't go, fine, but that's our plan.
- We will fund 529s for our grandkids and ask that our kids match, but it's up to them, with the ability to roll them down to the next generation as well.

In this way transfer wealth in a way that we can enjoy it together. Will there likely still be a lot left when we leave? Probably, but that is not the plan.

CoAndy
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Re: How much money should I leave my kids?

Post by CoAndy » Fri Jul 31, 2020 7:51 am

How about giving them a smaller amount while you are still around? See how they handle it then move forward from there.

Nowizard
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Re: How much money should I leave my kids?

Post by Nowizard » Fri Jul 31, 2020 8:09 am

Depends on the children and their ages when the inheritance is received. Ours are adults who are established and doing well. They will inherit assets even though that is not our true goal. In our situation, they will be pleased but do not expect it. Similarly, we would not be concerned if they were younger since we know their value system would not be affected by receiving even a significant inheritance while younger. Circumstances, circumstances, circumstances, an issue I feel does not receive adequate focus in financial planning. Circumstances are like financial planning in general. They, and it, changes during different times. Just as you may rebalance your investments, you may need to rebalance your "Inheritance planning" based on the circumstances of yourself and your children.

Tim

KlangFool
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Re: How much money should I leave my kids?

Post by KlangFool » Fri Jul 31, 2020 8:19 am

Badger97 wrote:
Fri Jul 31, 2020 7:48 am
smitcat wrote:
Fri Jul 31, 2020 7:24 am
southwest_stacker wrote:
Fri Jul 31, 2020 7:05 am
I figure at the current trajectory our net worth will be 8 figures when we croak. I plan on leaving 100% of it to our two kids, divided equally. I can’t think of any other thing or person I care more about than my kids so why wouldn’t I give it to them? If we die at the typical life expectancy age our kids will be in their 40’s. By that age they will likely have kids of their own and likely have their together. If they don’t I guess they will have one heck of a party. Even that would make me happier than giving the money to some charity.
While I tend to agree with you this thread is 5 years old FWIW.
It's old, but still relevant for discussion.

Our approach is to give them the money while we are alive and we can both enjoy it.
Badger97,

This is my plan if I have more than enough for my retirement.

KlangFool

SQRT
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Re: How much money should I leave my kids?

Post by SQRT » Fri Jul 31, 2020 8:25 am

We will leave her what’s left. It will very likely be well into 8 figures. Have also given her quite a lot while we are alive. Depending on her needs and our position, we may give more while we are alive and can see the results.

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Re: How much money should I leave my kids?

Post by Dottie57 » Fri Jul 31, 2020 8:26 am

KlangFool wrote:
Wed Dec 09, 2015 10:52 am
OP,

My answer will be leave NOTHING to your children. Donate your money to charities and causes that you believe.

1) If you need to give them something in order for them to survive, you could never give enough. Hence, it would not matter.

2) If they do not need anything from you, why give them anything?? The money would not matter anyhow. Donate the money to others that need it more. The money would matter to others.

KlangFool
One of the rare times I disagree with Klangfool. I just inherited a nice sum which makes me feel more secure. I am extremely grateful to my parents for everything they did for me. An inheritance is the cherry on top.

smitcat
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Re: How much money should I leave my kids?

Post by smitcat » Fri Jul 31, 2020 8:34 am

Dottie57 wrote:
Fri Jul 31, 2020 8:26 am
KlangFool wrote:
Wed Dec 09, 2015 10:52 am
OP,

My answer will be leave NOTHING to your children. Donate your money to charities and causes that you believe.

1) If you need to give them something in order for them to survive, you could never give enough. Hence, it would not matter.

2) If they do not need anything from you, why give them anything?? The money would not matter anyhow. Donate the money to others that need it more. The money would matter to others.

KlangFool
One of the rare times I disagree with Klangfool. I just inherited a nice sum which makes me feel more secure. I am extremely grateful to my parents for everything they did for me. An inheritance is the cherry on top.
"One of the rare times I disagree with Klangfool."
He has changed his answer since 5 years ago - please see two posts up for his current answer.
You no longer are in disagreement.

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wander
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Re: How much money should I leave my kids?

Post by wander » Fri Jul 31, 2020 8:53 am

smitcat wrote:
Fri Jul 31, 2020 8:34 am
He has changed his answer since 5 years ago - please see two posts up for his current answer.
You no longer are in disagreement.
I don't think he has changed his answer: He wants to spend it now, not to save and give a sum to his children.

Wricha
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Re: How much money should I leave my kids?

Post by Wricha » Fri Jul 31, 2020 9:17 am

Dottie57 wrote:
Fri Jul 31, 2020 8:26 am
KlangFool wrote:
Wed Dec 09, 2015 10:52 am
OP,

My answer will be leave NOTHING to your children. Donate your money to charities and causes that you believe.

1) If you need to give them something in order for them to survive, you could never give enough. Hence, it would not matter.

2) If they do not need anything from you, why give them anything?? The money would not matter anyhow. Donate the money to others that need it more. The money would matter to others.

KlangFool
One of the rare times I disagree with Klangfool. I just inherited a nice sum which makes me feel more secure. I am extremely grateful to my parents for everything they did for me. An inheritance is the cherry on top.
That is an interesting thought as you and I are about the same age. With a bit of luck, I have more than enough (even by Boglehead standards). I have an aunt almost 90 and I am the only living relative. She has a little money and a farm that is valuable. She wants to give it to me. I told her I don’t want anything (just don’t need it). She is putting it up for sale. She wants to leave the money to her church and some animal rescue shelter. Rats, never thought about a cherry!

KlangFool
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Re: How much money should I leave my kids?

Post by KlangFool » Fri Jul 31, 2020 9:18 am

wander wrote:
Fri Jul 31, 2020 8:53 am
smitcat wrote:
Fri Jul 31, 2020 8:34 am
He has changed his answer since 5 years ago - please see two posts up for his current answer.
You no longer are in disagreement.
I don't think he has changed his answer: He wants to spend it now, not to save and give a sum to his children.
Spend it now including giving some to the kid and donating to charity.

KlangFool

smitcat
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Re: How much money should I leave my kids?

Post by smitcat » Fri Jul 31, 2020 9:28 am

wander wrote:
Fri Jul 31, 2020 8:53 am
smitcat wrote:
Fri Jul 31, 2020 8:34 am
He has changed his answer since 5 years ago - please see two posts up for his current answer.
You no longer are in disagreement.
I don't think he has changed his answer: He wants to spend it now, not to save and give a sum to his children.

Now....
"Our approach is to give them the money while we are alive and we can both enjoy it.
Badger97,
This is my plan if I have more than enough for my retirement.
KlangFool"

Previous....
"My answer will be leave NOTHING to your children. Donate your money to charities and causes that you believe."
"1) If you need to give them something in order for them to survive, you could never give enough. Hence, it would not matter.
2) If they do not need anything from you, why give them anything?? The money would not matter anyhow. Donate the money to others that need it more. The money would matter to others."

Badger97
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Re: How much money should I leave my kids?

Post by Badger97 » Fri Jul 31, 2020 9:33 am

Wricha wrote:
Fri Jul 31, 2020 9:17 am
Dottie57 wrote:
Fri Jul 31, 2020 8:26 am
KlangFool wrote:
Wed Dec 09, 2015 10:52 am
OP,

My answer will be leave NOTHING to your children. Donate your money to charities and causes that you believe.

1) If you need to give them something in order for them to survive, you could never give enough. Hence, it would not matter.

2) If they do not need anything from you, why give them anything?? The money would not matter anyhow. Donate the money to others that need it more. The money would matter to others.

KlangFool
One of the rare times I disagree with Klangfool. I just inherited a nice sum which makes me feel more secure. I am extremely grateful to my parents for everything they did for me. An inheritance is the cherry on top.
That is an interesting thought as you and I are about the same age. With a bit of luck, I have more than enough (even by Boglehead standards). I have an aunt almost 90 and I am the only living relative. She has a little money and a farm that is valuable. She wants to give it to me. I told her I don’t want anything (just don’t need it). She is putting it up for sale. She wants to leave the money to her church and some animal rescue shelter. Rats, never thought about a cherry!
Not to derail, but she probably wants to talk to an estate attorney. If the farm has appreciated a lot in value, she will end up with a tax bill. Alternatively, if her plan is to give it all to the church, she might be better off willing the farm to the church and let them dispose, without potentially the big tax hit. I'm no expert, but she should definitely talk to a tax specialist or attorney in that area.

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wander
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Re: How much money should I leave my kids?

Post by wander » Fri Jul 31, 2020 9:40 am

We would enjoy all the money with our children. They should not always be depending on us for money. My wife and I started from zero, at very least, our children do not have to work through colleges like us and have no debt. We give them fishing poles, so they can fish themselves.
But, love is soft, we will change our decision before we know it. :D

ddurrett896
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Re: How much money should I leave my kids?

Post by ddurrett896 » Fri Jul 31, 2020 9:42 am

HomerJ wrote:
Thu Dec 10, 2015 5:56 pm
Personally, I think being poor in your 20s really does build character.

Not poor poor. Not really poor... But American middle-class poor, where you have plenty to eat, but you live in a dump with 2 roommates, and you drive a crappy car.

Really helps you appreciate the good things in life later, when (hopefully) you have more money.

I don't think it's a good idea to buy a kid a fine luxury car at 16... Kid will never appreciate it... It's just "normal" to them. Sets a high bar.
Couldn't agree more. Think it helps groom them to become more frugal and question most purchases.

sd323232
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Re: How much money should I leave my kids?

Post by sd323232 » Fri Jul 31, 2020 10:13 am

i have known cases where some kids knew they would get inheritance and lived it up and borrowed money to wazzoo knowing that eventually the money will come in to pay all debt off. in which case there was unhealthy situation where parents lived for very long time and that made their kids very stressed out with debt keep piling up LOL

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Re: How much money should I leave my kids?

Post by nigel_ht » Fri Jul 31, 2020 10:32 am

ddurrett896 wrote:
Fri Jul 31, 2020 9:42 am
HomerJ wrote:
Thu Dec 10, 2015 5:56 pm
Personally, I think being poor in your 20s really does build character.

Not poor poor. Not really poor... But American middle-class poor, where you have plenty to eat, but you live in a dump with 2 roommates, and you drive a crappy car.

Really helps you appreciate the good things in life later, when (hopefully) you have more money.

I don't think it's a good idea to buy a kid a fine luxury car at 16... Kid will never appreciate it... It's just "normal" to them. Sets a high bar.
Couldn't agree more. Think it helps groom them to become more frugal and question most purchases.
Meh, I don't want my kids poor in their 20s...I want them to have majors that don't suck and provide a decent ROI on college and the opportunity to make enough money to FIRE. I prefer they be frugal in their 20s but that's a different thing.

Money is freedom, opportunity and most importantly time. Why wouldn't I want to give that most precious gift to my kids?

If they blow it, they blow it and likely would have blown it anyway with or without an inheritance.

If they have the character to be successful then I bought them an extra 20-30 years of financial freedom to make the best possible versions of themselves without the necessity of being bound to a 9-5 job.

So for some money might be a crutch that limits their future but for others it's a springboard to propel them to heights they might otherwise have not have attained.

Which it will be is a combination of parental guidance/family experience and the nature of the kid and you may not be around to learn which it ended up being. But why NOT bet on potentially reinforcing a positive outcome?

As far as luxury car goes, one of my daughter's friends got a Tesla for her 16th so I asked her if she wanted me to buy her one and she said no, that would be too expensive. Win!

I do wonder what the OP ended up doing...

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Re: How much money should I leave my kids?

Post by smitcat » Fri Jul 31, 2020 10:44 am

sd323232 wrote:
Fri Jul 31, 2020 10:13 am
i have known cases where some kids knew they would get inheritance and lived it up and borrowed money to wazzoo knowing that eventually the money will come in to pay all debt off. in which case there was unhealthy situation where parents lived for very long time and that made their kids very stressed out with debt keep piling up LOL
Sorry to hear that ... it is not the case with our experiences.

Filetmerlot
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Re: How much money should I leave my kids?

Post by Filetmerlot » Fri Jul 31, 2020 10:47 am

I plan on leaving each child $314,159.26 with a little luck and a good stock market I can leave them each $2,718,281.82 or $3,141,592.65

Wricha
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Re: How much money should I leave my kids?

Post by Wricha » Fri Jul 31, 2020 10:51 am

Badger97 wrote:
Fri Jul 31, 2020 9:33 am
Wricha wrote:
Fri Jul 31, 2020 9:17 am
Dottie57 wrote:
Fri Jul 31, 2020 8:26 am
KlangFool wrote:
Wed Dec 09, 2015 10:52 am
OP,

My answer will be leave NOTHING to your children. Donate your money to charities and causes that you believe.

1) If you need to give them something in order for them to survive, you could never give enough. Hence, it would not matter.

2) If they do not need anything from you, why give them anything?? The money would not matter anyhow. Donate the money to others that need it more. The money would matter to others.

KlangFool
One of the rare times I disagree with Klangfool. I just inherited a nice sum which makes me feel more secure. I am extremely grateful to my parents for everything they did for me. An inheritance is the cherry on top.
That is an interesting thought as you and I are about the same age. With a bit of luck, I have more than enough (even by Boglehead standards). I have an aunt almost 90 and I am the only living relative. She has a little money and a farm that is valuable. She wants to give it to me. I told her I don’t want anything (just don’t need it). She is putting it up for sale. She wants to leave the money to her church and some animal rescue shelter. Rats, never thought about a cherry!
Not to derail, but she probably wants to talk to an estate attorney. If the farm has appreciated a lot in value, she will end up with a tax bill. Alternatively, if her plan is to give it all to the church, she might be better off willing the farm to the church and let them dispose, without potentially the big tax hit. I'm no expert, but she should definitely talk to a tax specialist or attorney in that area.
Thanks Badger your 100% correct.

illumination
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Re: How much money should I leave my kids?

Post by illumination » Fri Jul 31, 2020 11:49 am

Unless you are talking like oligarch-level money, for me I would not hesitate on leaving all of it to them. But I would be careful about what age they get it, if someone comes into a lot of money in like their 20's, it's highly unlikely they pursue a career. How many people show up for work after they win the lottery?

But I also would be cautious about micromanaging heirs with elaborate trusts, if you simply don't trust your heirs even as middle aged adults, don't give them the money. I also think people tend to "overestimate" their worth and that maybe leads to things being way more complicated than they need to be. Like it's an empire that needs to be managed from beyond the grave when the reality is might buy a middle class house in a HCOL area.

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FIREchief
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Re: How much money should I leave my kids?

Post by FIREchief » Fri Jul 31, 2020 12:06 pm

Filetmerlot wrote:
Fri Jul 31, 2020 10:47 am
I plan on leaving each child $314,159.26 with a little luck and a good stock market I can leave them each $2,718,281.82 or $3,141,592.65
So, you want to leave them just a "pie?" :P

Edited to add: I googled and did correctly recognize the exponential constant. I even remembered what it was called, although I can't for the life of me remember it's application. Something in maybe second semester calculus, which was well over half a lifetime ago. :annoyed
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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HomerJ
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Re: How much money should I leave my kids?

Post by HomerJ » Fri Jul 31, 2020 12:08 pm

nigel_ht wrote:
Fri Jul 31, 2020 10:32 am
As far as luxury car goes, one of my daughter's friends got a Tesla for her 16th so I asked her if she wanted me to buy her one and she said no, that would be too expensive. Win!
Offering to buy her that car (if you were serious) may have taught her the wrong lesson.

"Oh, your friend got an expensive car? It's important to keep up with the Jones, so I'll buy you one too if you want it"

But it appears that your previous life lessons were better, and she's learned enough to turn down your offer. Good for her and (earlier) you.
Last edited by HomerJ on Fri Jul 31, 2020 12:28 pm, edited 1 time in total.
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FIREchief
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Re: How much money should I leave my kids?

Post by FIREchief » Fri Jul 31, 2020 12:24 pm

Badger97 wrote:
Fri Jul 31, 2020 7:48 am
smitcat wrote:
Fri Jul 31, 2020 7:24 am
southwest_stacker wrote:
Fri Jul 31, 2020 7:05 am
I figure at the current trajectory our net worth will be 8 figures when we croak. I plan on leaving 100% of it to our two kids, divided equally. I can’t think of any other thing or person I care more about than my kids so why wouldn’t I give it to them? If we die at the typical life expectancy age our kids will be in their 40’s. By that age they will likely have kids of their own and likely have their together. If they don’t I guess they will have one heck of a party. Even that would make me happier than giving the money to some charity.
While I tend to agree with you this thread is 5 years old FWIW.
It's old, but still relevant for discussion.

Our approach is to give them the money while we are alive and we can both enjoy it. We considered the alternative and settled on this approach.

- We match them $1 for $1 for any money they earn into a ROTH IRA account. This starts when they start working at 15/16. They don't get a car to drive if they don't have a job. So, they get some work skills, they have some spending money, and they learn about saving. We will continue this after they get out of college as well.
- We agreed we'd pay for university. 100%. But, they have to get the grades to get in. Oldest son got into Top 10 Engineering school at Flagship State U. Very happy to pay. He still had a PT job through HS and has one now in his summer between university semesters.
I think these two are fantastic. We did something similar with the Roth's, but I think it was more than a match. I believe we matched the Roth more than dollar for dollar, but asked them to pay 50% towards the purchase price of their (reasonably priced) used cars. We covered maintenance, gas and insurance (provided that we had the final say in which cars they bought). We also paid for college, but encouraged them to live at home and cover the first two years at community college. That works out great if the family dynamics are right.
- We will take our kids, and their families, on vacations every year. All expense paid. If they don't go, fine, but that's our plan.
- We will fund 529s for our grandkids and ask that our kids match, but it's up to them, with the ability to roll them down to the next generation as well.
We're not quite to this point yet. I have mixed feelings regarding the 529s, as the skilled trades may be the chosen path for at least one grandkid. I also think it's important that they have vacations with just their family. I might rather just pay for that than "tag along." I'm sure every situation is different. Fortunately, we see our kids and grandkids frequently, so there is no deficit of family time to be addressed.
In this way transfer wealth in a way that we can enjoy it together.
I'll be a bit contrarian here. I know that some derive "enjoyment" out of seeing their kids spend some gifted money, but personally I don't care if I'm around for that or not. It really isn't about my happiness, and I probably receive just as much comfort from knowing (hoping?) that when I leave this earth I will be able to make my kid's lives a bit better going forward. I'll be in a better place.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

azianbob
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Re: How much money should I leave my kids?

Post by azianbob » Fri Jul 31, 2020 12:44 pm

I would leave them all my assets and money, distributed evenly. However, I would set up a trust so they only get to withdraw up to $2000 a month or something until they are in their mid 30s so they don't become lazy and entitled. Every decade it will go up by like $1000 a month and at 50 I would give them full access to everything. This way they have some buffer to choose a career they want as opposed to forced to for money, but it also still forces them to be productive can't just do nothing.

I don't think I would leave them a 529 in case they decide not to go to college or get a scholarship.

However, chances are we won't even have that much money to leave them, so just theoretical thinking here.

nigel_ht
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Re: How much money should I leave my kids?

Post by nigel_ht » Fri Jul 31, 2020 1:01 pm

HomerJ wrote:
Fri Jul 31, 2020 12:08 pm
nigel_ht wrote:
Fri Jul 31, 2020 10:32 am
As far as luxury car goes, one of my daughter's friends got a Tesla for her 16th so I asked her if she wanted me to buy her one and she said no, that would be too expensive. Win!
Offering to buy her that car (if you were serious) may have taught her the wrong lesson.

"Oh, your friend got an expensive car? It's important to keep up with the Jones, so I'll buy you one too if you want it"

But it appears that your previous life lessons were better, and she's learned enough to turn down your offer. Good for her and (earlier) you.
I would have been mildly disappointed if she had said yes but I'd have gotten her one. We don't keep up with the Jones and sometimes that's been a little sad for her. Like leading a horse to water but not letting it drink.

The schools are good here and it's a pleasant place to live but her peers end up being more apparently affluent than she is. Larger houses, nicer cars, fancier vacations, branded clothing, etc. The platitudes of delayed gratification and the value of saving are not that useful in navigating high school.

Buying a Tesla would make the statement, both to her and to others, that we choose to live the way we do, not because we must live the way we do and that we can afford it because we save in other areas.

I don't believe that our way is necessarily better or worse either. These other kids assume that they will have similarly financially rewarding careers as their parents and are on the path to med school or whatever with good enough grades and test scores. They don't seem any less driven than any other kids.

I'm sure there are more than a couple with "affluenza" but that's more a function of their parents than simply having nice stuff.

sd323232
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Re: How much money should I leave my kids?

Post by sd323232 » Fri Jul 31, 2020 3:02 pm

smitcat wrote:
Fri Jul 31, 2020 10:44 am
sd323232 wrote:
Fri Jul 31, 2020 10:13 am
i have known cases where some kids knew they would get inheritance and lived it up and borrowed money to wazzoo knowing that eventually the money will come in to pay all debt off. in which case there was unhealthy situation where parents lived for very long time and that made their kids very stressed out with debt keep piling up LOL
Sorry to hear that ... it is not the case with our experiences.
i know, money make people do weird stuff.

smitcat
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Re: How much money should I leave my kids?

Post by smitcat » Fri Jul 31, 2020 3:11 pm

sd323232 wrote:
Fri Jul 31, 2020 3:02 pm
smitcat wrote:
Fri Jul 31, 2020 10:44 am
sd323232 wrote:
Fri Jul 31, 2020 10:13 am
i have known cases where some kids knew they would get inheritance and lived it up and borrowed money to wazzoo knowing that eventually the money will come in to pay all debt off. in which case there was unhealthy situation where parents lived for very long time and that made their kids very stressed out with debt keep piling up LOL
Sorry to hear that ... it is not the case with our experiences.
i know, money make people do weird stuff.
We have many examples in our area that would suggest that this would not be the case. The most compelling examples are with familes of mutiple kids where they are all aware they will receive funds but only one of the two or three were affected by it and the other(s) were definately not.

oldfort
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Re: How much money should I leave my kids?

Post by oldfort » Fri Jul 31, 2020 4:10 pm

FIREchief wrote:
Fri Jul 31, 2020 12:24 pm
Badger97 wrote:
Fri Jul 31, 2020 7:48 am
smitcat wrote:
Fri Jul 31, 2020 7:24 am
southwest_stacker wrote:
Fri Jul 31, 2020 7:05 am
I figure at the current trajectory our net worth will be 8 figures when we croak. I plan on leaving 100% of it to our two kids, divided equally. I can’t think of any other thing or person I care more about than my kids so why wouldn’t I give it to them? If we die at the typical life expectancy age our kids will be in their 40’s. By that age they will likely have kids of their own and likely have their together. If they don’t I guess they will have one heck of a party. Even that would make me happier than giving the money to some charity.
While I tend to agree with you this thread is 5 years old FWIW.
It's old, but still relevant for discussion.

Our approach is to give them the money while we are alive and we can both enjoy it. We considered the alternative and settled on this approach.

- We match them $1 for $1 for any money they earn into a ROTH IRA account. This starts when they start working at 15/16. They don't get a car to drive if they don't have a job. So, they get some work skills, they have some spending money, and they learn about saving. We will continue this after they get out of college as well.
- We agreed we'd pay for university. 100%. But, they have to get the grades to get in. Oldest son got into Top 10 Engineering school at Flagship State U. Very happy to pay. He still had a PT job through HS and has one now in his summer between university semesters.
I think these two are fantastic. We did something similar with the Roth's, but I think it was more than a match. I believe we matched the Roth more than dollar for dollar, but asked them to pay 50% towards the purchase price of their (reasonably priced) used cars. We covered maintenance, gas and insurance (provided that we had the final say in which cars they bought). We also paid for college, but encouraged them to live at home and cover the first two years at community college. That works out great if the family dynamics are right.
- We will take our kids, and their families, on vacations every year. All expense paid. If they don't go, fine, but that's our plan.
- We will fund 529s for our grandkids and ask that our kids match, but it's up to them, with the ability to roll them down to the next generation as well.
We're not quite to this point yet. I have mixed feelings regarding the 529s, as the skilled trades may be the chosen path for at least one grandkid. I also think it's important that they have vacations with just their family. I might rather just pay for that than "tag along." I'm sure every situation is different. Fortunately, we see our kids and grandkids frequently, so there is no deficit of family time to be addressed.
In this way transfer wealth in a way that we can enjoy it together.
I'll be a bit contrarian here. I know that some derive "enjoyment" out of seeing their kids spend some gifted money, but personally I don't care if I'm around for that or not. It really isn't about my happiness, and I probably receive just as much comfort from knowing (hoping?) that when I leave this earth I will be able to make my kid's lives a bit better going forward. I'll be in a better place.
This is a necro thread. The OP left five years ago.

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FIREchief
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Re: How much money should I leave my kids?

Post by FIREchief » Fri Jul 31, 2020 4:19 pm

oldfort wrote:
Fri Jul 31, 2020 4:10 pm
FIREchief wrote:
Fri Jul 31, 2020 12:24 pm
I think these two are fantastic......
This is a necro thread. The OP left five years ago.
Yes, but since there were 25 new posts prior to mine, I felt I was joining an active/current discussion. Any particular reason why you chose to challenge my posting?? Have me and the other several dozen new posters done something that isn't allowed and/or hasn't been done many time before? :confused
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

flyingaway
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Re: How much money should I leave my kids?

Post by flyingaway » Fri Jul 31, 2020 4:25 pm

KlangFool wrote:
Wed Dec 09, 2015 10:52 am
OP,

My answer will be leave NOTHING to your children. Donate your money to charities and causes that you believe.

1) If you need to give them something in order for them to survive, you could never give enough. Hence, it would not matter.

2) If they do not need anything from you, why give them anything?? The money would not matter anyhow. Donate the money to others that need it more. The money would matter to others.

KlangFool
If I am not mistaken, I believe that you have some Asian background. I cannot believe that you said the above statement.

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Re: How much money should I leave my kids?

Post by LadyGeek » Fri Jul 31, 2020 4:28 pm

This thread has run its course and is locked (relationship issue, bumped from 2015, contentious). See: Acceptable Topics and Subforum Guidelines
This is an investing and personal finance forum. We also maintain a subforum that allow our members to discuss consumer goods and services and recreational activities. Anything else is considered "Off Topic" and is not acceptable on this forum.
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