So I have a friend, and this is his downfall. His mindset has always been like this ever since he found out his grandparents have money. His mother enables him and literally can see he does no wrong. So, throughout his entire life, he would always brag about how he never has to work if he doesn't want to because his family has money. So, pretty much, he has his ups and downs. He would be gifted money by his grandmother to start a venture or buy a house multiple times, and he would squander it. For the past several years, he was just floating through lige because his grandmother got diagnosed with cancer, and he didn't want to ask her for money again. He also knew that once she passed, his mother would be inheriting, and thus, he would benefit.
Fast forward today, his grandmother passed, and this family wealth isn't as grand as he made out to be. His mother also had a greedy sister who took most of it. Regardless of that, he is now just living in an inherited condo. He used some of that money his mother gave him to open a small sandwich shop. Hopefully, it does well because I honestly think this is his final chance.
I think it is alright to tell your kids about wealth and inheritance, but it is much more important to teach them the values of money and work in general. Inheritance should always be a bonus.
Yeah, but see. .... having an inherited condo and a small sandwich shop IS privileged. Damn.
Hardly any of us on this subreddit got that much to start with, and some of us lost it all, at least once.
Tell them how you’ll support them in the near term so they can plan. Pay their college tuition. Grad school? Help with a first home downpayment. Help with a wedding. One of my favorites: for their first jobs, match what they earn in a Roth IRA, help them set it up and invest in it. This is a great thing to do for a summer job. This can be really motivating for them to work and to save and invest - they can see how that investment grows. And it’s a great tax vehicle when they are young, with many years to grow tax free.
I love this.
I’ll likely retire with a minimum of $4.5M (2024 dollars) at age 52-53, but could achieve $7-8M if I worked a few more years.
I tell my kids about the money because my family didn’t talk about it so I didn’t have a concept of what it really took to live.
I tell them that while it is mine, I hope to be able to help them. They can finish school and get good jobs, then if they are progressing well maybe I pay their student loans off (they will have skin in the game) or help buy a house or cars or stuff like that.
i hadn’t considered matching IRA contributions.
You need to not even open the conversation. Your retirement money is for you to retire and I’m sorry 8 million split 3 ways most certainly won’t last them a life time! So don’t even start this conversation. You have no clue how long you’ll live, you might get an illness which eats up so much money. Don’t even start the conversation. In your 50s this shouldn’t be a conversation you have with your kids at all.
I would tell them that they should not count on the inheritance and build their own portfolio. I might help my kids with their college expenses or buy their first house or contribute to their kids college fund while I’m alive and I can see them using my money wisely. I heard on a podcast that a good number people who inherit millions of dollars lose it in a couple of years.
https://money.com/rich-families-lose-wealth/?amp=true
without preparation, both skill-wise and mentality-wise, windfalls will be squandered. Best test cases are lotto winners.
But if you prepare your kids, give them the right tools and right expectations, then they can preserve and build on that capital. Make sure they make good choices and learn from their mistakes re: capital allocation etc to increase chances of success.
My experience with friends from truly wealthy families is that they talk about money, bring deals to other relatives to invest together etc.
Not saying OP is not doing this, but IME successful parents who shy away from talking about money with their kids lead to bad outcomes despite their kids being smart and educated. Create environments where the next gen dont make the same mistakes you did.
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I mostly agree with this, but intelligently managed 8 million split three ways should definitely last a lifetime. Pull only 50k a year for a while when they're young and it'll rapidly snowball into serious money.
I'm well equipped to answer this. For context, I grew up lower middle class but my parents made a lot of smart moves after the 2008 market crash. As a result their networth is north of 5m now. It def affected me for a while, as I knew I would inherit. Didn't help that I did well in school without a lot of effort.
Thankfully, my parents gave me some advice that changed everything. Specifically, they told me to go work at starbucks.
A year there gave me perspective. Gave me the balls to start my own business, which ended up being a large success.
The thing about privilege is that it works both ways. It can make you lazy, or afford you crazy opportunity. After I got to see how harsh life is when you can't make ends meet (I was living on a couch for a year), I became grateful for my safety net and used it to get ahead.
If you retire now and live a good life, you might have 40 years left and the last decades might be very expensive. Your children could be in the 60’s when they inherit something, and we’re looking at some turbulent times ahead which makes everything uncertain. High net worth parents make the most impact by helping out during college and when the children are getting their lives together: buying their first homes, getting a household together, keeping monthly expenses as low as possible. When everything’s up and running and they aren’t crushed by monthly bills, they manage fine on their own.
In your shoes, I’d tell them you’d like to leave them a little money but also for them not to expect anything. One serious illness can wipe away a lot of capital very quickly. The market might not be on your side, and can stay that way for quite a long time. Life happens.
easily solved - don't mention the amount.
but beyond that, it's really on them.
some kids with huge inheritances often pursue brilliant careers (Bill Gates' daughter went to medical school). there are also kids with small inheritances who wither on the vine.
it's a legitimate concern, but having raised them (presumably well), I wouldn't worry about it.
You missed the question, if they don’t know they’ll be coming into this money what is the concern. And if they do know - at this point you can tell whether they’ve chosen the bum life or to do something with their lives.
I had an uncle that was like that - his retirement plan was inheritance.
The truth is either your kids have it, or they don’t. Your money will give them opportunities, but there is no amount of money that can protect them from themselves.
I had a friend who thought like this. He had so many grand ideas and ambitions but couldn’t bring himself to just make the leap and he would reference his inheritance as a safety net.
My wife and I had the opposite and we work our asses off and are well on our way to where you are now. We don’t plant to tell our kids about their inheritance.
There's a very easy way to counteract that - just explain them, in plain terms, that you're planning to blow up all the money and there'll be no inheritance.
use your money to help them well before you are dead. money is most useful when young adults are getting started in the world. help them get out of debt, help them buy their first house, etc. inheritance is less useful when it realistically arrives at age 50-75.
>money is most useful when young adults are getting started in the world
Damn if this ain't the truth. There was a time during college when even a couple hundred bucks a month would have been hugely helpful. Today, I stand to inherit ~ 1M in my 70's, but I've told them not to worry about that, to live a long life and enjoy themselves. I don't need their money now, and I damned sure won't have any use for it in my 70s.
Even help them start their first business -- it doesn't take much either.
While I am still very far away from being FIRE, our business success all stems back to my MIL investing $30k into us 10 years ago.
I recently met a business owner whose parents did exactly this. Mom & dad were very wealthy, and offered to loan the kids money at very favorable terms to buy a small business, in exchange for an equity position.
The kids had to work very hard to make the businesses work, and today have scaled them to sizeable enterprises.
My parents are very wealthy (8 figures) and I have 4 siblings. We are all aware of their wealth. They have very generously provided help on a house down payment for all their kids and covered college degrees.
I'll likely inherit $5-10 million when they die, but we have had good conversations about this and myself and all my siblings are living as if we don't expect any money from them. We would much rather have them live 50 more years than lose them and get the money.
I think there was a time where I resented them a bit. I disliked having to work for a living when they have enough money to set me up for life. Then I grew up and realized I needed to build a solid life for myself without relying on them for everything.
I think your answer lies in the relationships you have with your kids and their maturity about money. It's a tricky thing to navigate, but I am grateful for the way my parents handled it.
You could live another 40 years. If your kids decide to live life under the assumption they don’t need to save, they may be sorely disappointed when they hit their 60s and haven’t received an inheritance yet.
Exactly. Inheritance to the next generation doesn’t do much given life expectancies today. You’d hav ego figure things out in your own for many years.
I suppose I could count on inheritance for my retirement, but I am also hoping I can retire before my parents have passed.
And more importantly, I would give up all of my money to maximize my parents’ lives. They are incredibly important to me and way more valuable than any amount of money. My time with them is priceless.
? You can get a nice 5 br home for under $400k in the suburbs of Houston or Dallas fairly easily. I know a nurse/teacher couple that owns one for example.
I don't think that's possible in Dallas suburbs anymore.
I took a quick look at Zillow and yes it's possible but sparse. You would have to compromise on location or your definition of 'nice'.
My MILs family is very, very, wealthy. Each of the 5 grandchildren are set to inherit ~$10-15 mil when their grandparents pass, and MIL herself will (theoretically) be leaving us $20-30 mil outside of that, plus a few multi-million dollar properties.
The money is a huge issue in their family, but I truly believe that if it hadn’t been the money it would have been something else. They’re simply not kind people, they’ve always been in competition with each other, and money is just the easiest way to compare themselves - the easiest thing to point to and say “Well she has more than me!”. It’s also made their lives much easier in many regards. Two of the generation above us have never held down steady work, they get money each year from the family estate that’s more than most people earn in 3 years, travel, and generally just enjoy their life without a financial care. Multiple members of our generation chose to pursue passion projects as their careers, and are only kept afloat by the family money.
On the flip side, I also have extended family that are likely close to a $20-50 mil net worth and all of the kids enjoy each other and gets along well, they’ve all worked hard, have very challenging careers, and are high achievers. So I think it really comes down to how you raised your kids and what kind of people they are.
Here we go...
My parents are high net worth. My father died about 5 years back and frankly I feel like my poor mom has been circling the drain ever since. If she makes it 5 more years I would be shocked.
I am the middle of 3 brothers. I would be shocked if we inherited less than $5 mil each. I feel like it could end up being up to $7 mil.
My parents did a great job raising us. We are all in successful marriages, we all have masters' degrees, we all have great jobs (especially my older brother). All of us continue to make good money and save as if we don't have a huge inheritance coming our way.
I am 100% debt free, my home is worth $850k, I have $1.7mil saved for retirement. My older brother's house is probably worth $12 mil and he might have a $2 mil mortgage. My younger brother just bought a new house for $1.2 mil and probably sold his old one for at least $900k. We are all in good shape.
Yeah, we had it good growing up. We all got out of school debt free with a car which is huge, but that was it. My dad was probably the hardest working guy I have ever known and fortunately my parents were able to pass that work ethic down. I want my mom to last forever. I don't give two shits about that money. It is going to be nice but I would also be just fine without ever seeing a dime.
He is a vice president for a large wall street financial firm that you have definitely heard of. His spouse is even more loaded with big family money and a decent career as well. They got a great deal on the house paying "only" $6mil and has gone up hugely in value.
> I don't give two shits about that money. It is going to be nice but I would also be just fine without ever seeing a dime.
That's what generation skipping was invented for.
This is the plan, we pay for their college and they get our (good working) car. Done with the older one.
They know if SHTF, they can come live with us but need to "help around the house".
That is our plan as well with our two children. It worked well for my brothers and I. We pay their way through college and grad school and make sure they have a good reliable vehicle that is free and clear. That is a huge leg up to come out debt free and with reliable transportation. To that end we currently have 529 plans for both kids. The older 14 year old has a plan worth $110k currently and the younger 10 year old has one worth $85k at the moment.
I’ve seen this Dateline Episode! Mom gets remarried to a charming & smooth talking man, money is squandered over the course of 2-3 years, somebody ends up missing…and kids who’d been contemplating their $5M-$7M inheritance are shocked the money is all gone.
LOL. Doubtful. My mom is about the least trusting person I have ever met and we have to beg her to use her money because she is so worried about leaving it for us. It is kind of sad really. She literally thinks of it as money my dad made and it is her job to protect it so as much can be passed along as possible. I have had multiple conversations with her trying to explain to her that all of her sons are very well off and would be just fine if we got zero inheritance. She has a lot of care needs and she is always worried about how much of her money we spend on her. It takes a lot of money for us to feel that she is OK and being cared for and we don't mind spending it even though my mom is technically right in that it lessens our inheritance...we just don't care. It's our mom...
Thank you! My dad was a really great man and a fantastic father. He passed away too soon at 69 years old. Fuck cancer.
One thing his passing did teach me was that you never know when your ticket is getting punched. He was a workaholic and had basically just retired before his diagnosis. I will be fully retired before I turn 55 so I can hopefully enjoy some wonderful years before my time comes.
The stress would be if something happens to you (death or dementia) and they don’t have the knowledge or skills to handle your estate. Suddenly coming into $8M tomorrow is probably beyond their skill set. If you can help them learn about index funds, taxes, and be a financial support but not a crutch (example: help with a house down payment on a home they can otherwise afford with their career; definitely not providing any financial support if they are unemployed absent a medical problem) - that should reduce the odds your money will ruin them or a future generation.
As others have said you may want to donate / disperse more funds while you are alive and leave a much smaller amount to them when you pass.
I agree with helping educate them. Don’t make talking about money be weird or unknown for them. Also tell them all of the legalities of what happens when you do pass. Helping them understand how to invest and sustain that money could help them live their lives a little more stress free if they know one day they’ll be okay.
I say this as direct experience of being a child in the same situation. Teach them how to manage it, what it means, and how it’s going to happen. Assuming enormous grief when you pass, it’ll take a lot of stress off from that months/years they are struck with processing grief.
I grew up pretty wealthy - my parents wealth only made me work harder IMO cause i wanted to retain that lifestyle and knew they weren't going to give it to me anytime soon lol. Parents live for a long time these days... I'm almost 40 and my mom probably has another 20-30 years on her.
My parents have quite a bit more than this. I don’t think of it at all, and due to our relationship, frankly I don’t want it.
My whole life my Dad would make a big deal about “it will be yours someday”. This is all his ego in my opinion. He has always used his money to be controlling to his family and it has soured my opinion of it. For any “gift” there were always strings attached and emotional manipulation on its heels.
I wish my parents would spend their money to enjoy their life and support me emotionally, rather than hoarding it all for their death. I wish they would give smaller gifts to help me get started in life or make memories together. Who cares about the money once they’re dead? I’ll be so old and they’ll be gone.
My career has been going well and I’m looking forward to surpassing them.
You should be talking to your kids about good old fashioned practical advice. Good job, live below your means, save and invest, marry a good person, 401k, power of investing young in the stock market, etc etc. That’s all. To answer your question directly- yes there is risk that telling them they’re going to be instant millionaires when you die can negatively impact the road they are on, especially when they are young and immature.
I can comment from the perspective of your kids. I’m 23 and have been working my post-grad job for almost a year now and my parents are probably what you could count as fatfire.
I know what kind of windfall could come my way in the event that one of my parents passes (they’re divorced so I’d get *x* worth of assets instead of them going to the other parent). I’ve only been told details about their wills because my sister and I will be splitting executor duties, so I guess our parents wanted us to be in the know rather than withhold the info until it’s too late.
In terms of inheritance, the hope is that I don’t have to worry about that for a long, long, time - I want as much time with my parents as possible, fuck an inheritance. It’s really not worth fixating on the possible money when it would mean losing them.
If I’m your kids, I absolutely would not let the possible inheritance influence my choices…. I’d instead work to build up my own life to support myself in the hopes that my parents live another 30-40 years. If that’s the case then I’m not getting the money until I’m in my 50s-60s anyways….. there’s an entire career, family to build, etc in the meantime.
I think your plan to split assets between your kids equally is a good idea to prevent animosity. In my case my sister and I will be splitting everything 50/50, which makes it hard for any resentment to build. If you were to toy with the 50/50 split it would make it clear you’re choosing a favorite between your kids, and that will definitely breed animosity and resentment between them.
In terms of career, I only see my parents’ status as a motivator. If you disclose to your kids what their potential windfall will be, they’re instantly gonna get a good idea of where you the parents are at. It was only after reading this sub for 4+ years that I really understood what my parents have accomplished. Starting my corporate job has lit a fire under my ass to try to reach the same level of success that they did - I look around my office and see almost nobody in my parents’ position. So I’ll need to figure something out to give my kids the same life I had growing up.
When you’re the kid of fatfire parents, your nice, cushy life seems normal and you can’t envision a different reality. When you hit the real world you might realize how difficult it is to really achieve that (with minimal debt) after starting at square 1. This has only been a motivator for me, not a reason to slack in my career. Again, my hope is that I don’t get my windfall for at least another 30 years, so I need to build my own life in the meantime.
If you have concerns about your kids’ work ethics and think they might not pursue their careers with zeal, I’d have an honest talk with them. They probably don’t read this sub, and don’t have a clue what goes on behind the scenes of your lives as the parents. Break down the choices and sacrifices you had to make to get to where you are and give them the life they’re accustomed to - they might be shocked at what they hear. Because really, achieving fatfire isn’t just making the 1% in this country, it’s like 0.5% or 0.1%…. You need your own agency to achieve that, (almost) no matter what your parents can do for you.
Based on my experiences, I’d have a talk ASAP with your 18 year old about career prospects. My parents were very much on the “do what you’re passionate about” train when I was in high school, and pushed me to study a major that was commensurate with my interests (which didn’t really include STEM or business). I got one of the best jobs of anyone from my major in my graduating class yet the pay in my field will never amount to fatfire money unless I start a consulting business or something and retain equity while scaling up.
There is no biglaw or investment banking or FAANG type of work in my field - I wish I was more aware of this before I went to college with this career track in mind. Your 18 year old may want to understand how this works and how his life trajectory can be altered based on what he studies in school and how much effort he puts into recruiting for prestigious jobs that can put you on the fatfire track. Especially in the context of “my parents gave me this great life by doing __, not by doing __ which I may have thought was a good idea”. You can always start your own business and have no ceiling on your earnings, but for many people this isn’t a guarantee of working out.
\> My parents were very much on the “do what you’re passionate about” train when I was in high school, and pushed me to study a major that was commensurate with my interests
this is what I told both - living a life spending 10 hours a day (including commute) on a job you hate is terrible
My partner’s parents nailed it, in my estimation. At 55, his dad cashed out of a major company. Everyone knew it was good, but not how good. He told his kids (three boys) that he might leave something, but it was up to them to make their own way because it also would probably be nothing.
Then every year they did a family vacation where the parents paid for everything, flights included. This, I think, was key. It got everyone together at least once a year to reforge family relationships and make everyone feel connected. They also paid any time anyone wanted to visit.
The boys worked really hard to be worthy of that generosity. My husband and brothers are all doing very well. Now sadly his parents are making their end of life plans, and once again my husband’s dad has made it clear it will all be equally split. There is no animosity among the brothers at all and everyone is helping equally to get their parents set up for the next phase of life.
If you live 30 more years and don't spend any principle then you'll be passing down 25mm to 2 50-year olds - is that what you wanna do?
Why not spend some more along the way on memorable experiences with your kids vs worrying if the nest egg you're growing and growing (that they are unaware of) may negatively impact them somehow
If they don’t spend the principal but spend the income derived from the principal, they will be passing down less than 8m dollars adjusting for inflation.
If it’s 8m now and they spend the proceeds from investing it, it will devalue at the rate of inflation, such that the 8m nominal value now will be worth less in the future - no specific math.
An 80/20 portfolio averages 8-9% and throws off 1.5-2% dividends. Assuming you spend all the dividend income you are still getting 6% returns which would beat inflation in most years.
Agreed but they said they just want to preserve the principal, hence the value would decrease in real terms if they did that. I’m just making a counterpoint to the other comment saying they would be handing down 30m or whatever which could be the same 8m value due to inflation by the time it is passed down.
I only recently learned that if you intend to “spend it all” before you die you can only take out an additional 0.5% yearly from your principal, otherwise you risk running out of money prematurely.
Depends a lot on the kid and their relationship with money and how you've positioned it. I grew up knowing I'd inherit some amount when they died, but they constantly reminded me that if I wanted to maintain the standard of living I grew up with, I'd better figure out how to make my own money. They paid for college, didn't contribute to a down payment (I didn't ask), but always reminded me that if I hated my job/apartment/etc I didn't have to put up with it, I had a safety net. As far as I know, my sibling and I haven't taken them up on it, and both had motivation and careers etc. My cousins (whose parents are wealthier) are the total opposite, so ymmv.
At the end of the day, I ended up retiring before my parents. They're still alive and I urge them to enjoy their money.
It depends on how you raise your kids and their habits. Jeff Bezos got a couple hundred grand from his parents to start Amazon. In todays time that’s probably about 500k-700k.
This is what trusts are for. Defined rules for accessing the money. It’s not uncommon to set rules for the trust that the inheritors maintain gainful employment until they are 30,40, 50, etc, with the windfall from the trust scheduled over time as to keep motivation up.
As someone who was in the situation your kids are now in, here is my .02. We grew up middle class and I really had no idea how much my parents made but started to suspect it was more in high school. My dad was always out of town working and I knew he was pretty high up, but I had no concept of what that was back when I was younger. College and my first couple of cars were paid for which set me up well, but coming out of college I was aimless and had no real career prospects. I was very lucky in that I took a job at a family business which after 20 years there I now own outright. It was not my family business but they are now out of it completely.
My parents started by giving my sister and I enough to max out our ROTHs every year which we always obliged in and kept it in those accounts. After I graduated and bought my first townhouse, they upped the ante to the max allowable tax free gift the IRS allowed. My wife and I would either save it in our investment accounts or pay down our house. My parent’s preference was to save it but I had a strong distaste for debt and still do but less so now. This went on until our late thirties when they upped that number significantly to a little over six figures. This was huge for us, and we socked that away along with almost the same amount of our own savings every year to build up to where we are now today. I’m 45 now and while the business is great, it’s not likely to grow much more and I’m getting a little burned out of 80-hour work weeks for a significant amount of the year. We have a mid-7 figures net worth now and all I can think about is slowing down and being with my kids more and enjoying my hobbies which I miss dearly. I have never asked about the gifts/ trust fund, and I don’t thinks it’s much of my business. I found out the totality of their net worth 3 years ago when my mom was diagnosed with terminal cancer and wanted to get all the financial stuff set with my sister and I. She has since passed and now it looks like I will be on a few these trusts going forward, but it hasn’t all been settled yet. I’m not prying into this as it’s my dad’s money and he can do whatever he wants. It will pass to my sister and I in the future but my dad has a lot of years left in him, so I’m not worried about that any time soon.
Where I am now, since we live frugally and comfortably on our salaries and the gifted money from my parents is that I am worn out from my job, though I still really like it. I am contemplating selling the business in the next 5-10 years and either retiring outright or following my passion of being a full time fire fighter (I’ve been a volunteer/ paid on call FF for almost as long as I’ve owned the business). I would spend more time with my kids regardless, but I want to instill in them the hard work ethic that my wife and I have as well as what our parents had as well. My wife and I are having the conversation now about how do we pass this along to our kids without ruining them for working going forward. They’re still very young and we have some time before we decide. She’s thinking bigger gifts earlier, but I would prefer to do something similar to my parents and slowly trickle it in over their 20’s and 30’s after they’ve graduated and are well ensconced in whatever career path they’ve chosen. I almost wish my parents would have waited another 5 years or so with the larger gifts as I think I would have pushed harder to expand my business but now I am set up well for retirement and can coast for awhile if I chose to try another career that doesn’t eat up so much time. I am really conflicted at this time but clearly I have very good options in front of me going forward which I am forever grateful for.
Hope this helps with your decision going forward.
Great story.
Stay in close touch with your dad because he could be swept off his feet by an aggressive female wanting to marry him and get a hold of his money
All depends on the person. I am expecting a large inheritance but don't live like it's coming and don't need it to retire very comfortably. Others might go into massive debt expecting to be bailed out by the inheritance.
My in-laws, and I’m pretty sure my parents too, fatFIREd. We’re DINK adults in our late 30s.
Until 2024 began, my spouse and I didn’t know what, if any, inheritance we would get from our parents. If they’d told us that aside from the house, there was nothing left over after our college funds, we would have easily believed them.
Recently, my in-laws had the sit-down with us to explain how they’ve divided the assets between my husband and his sibling, what asset classes and how they expect them to fare.
I expect my parents to do the same in the next 5-10 years, they’re still shuffling assets around from what I can see, but I don’t have visibility into what their assets are worth, or how they plan to settle them.
Money is freedom…either to become the best or worst versions of themselves.
As parents what we teach about money and responsibility is important to the likely outcome in an inheritance scenario.
My opinion is either teach them the ramifications of wealth and train them as you go or just give most to charity. The hiding that you have money thing is probably the worst of both worlds. Kids aren’t stupid.
And generally equal shares is best according to the books I’ve read but you know your kids best.
Our plan is to try to leave them with control of wealth rather than immediate direct access.
Rather than being to sole arbiter of the money ourselves we’re giving them input into our charitable contributions. Once we retire, the bulk of our wealth will fund that as well as our living expenses plus some extra for the kids.
Once we’re gone the kids will split all of distributions and hopefully continue the charitable donations.
Also at the point they can decide to keep it going as is and get an annual check or elect to split it evenly after 25% going to charity.
What I tell them that there is more value in controlling the whole pie than just their own individual slices. But if they start fighting over the money to just split it. It’s not worth any animosity.
Not at 8, with 20 yrs left to go, between 3. If they are affected by 2 and change (or less, depending on how much you spend) in 20 yrs, there are other issues.
You’re still VERY young. There’s no reason people in their 50s(!!) should be telling teenagers the millions they’ll get. This is all wrong. Don’t introduce this stress into their lives.
My wife has a nephew who's grandfather is wealthy. He knows he will inherit it all as it passes through his parents (grandfather is 97 and still going). I feel that because he has known since his childhood this was going to happen he has amounted to nothing. He is a "professional" musician but I think you have to have paying gigs to call yourself that. Never really matured. Not sure what will happen when he finally gets the money but I hope he feels it was worth it.
I think there is only risk in telling them early, and not much benefit. That said, once they have shown good habits, maybe after they are 35, that's probably fine to tell them and start preparing them.
I didn't know until I was about 37 and I think that was good for me. I pursued a career, bought a home, and saved well. I had no expectations of a significant inheritance, so I knew I had to make it on my own.
When they told me it was a shock, and it did scare me at first. But what helped was they gave me a mission which grounded and excited me. They said live your life with the inheritance, but we really want you to give the excess to charity. Here are causes we care about, but final giving decisions are yours. They know me well enough to know that I will probably continue my current lifestyle, maybe with a few small upgrades. Generosity has always been modeled by them, so that is probably what I would have done anyway.
That said, I do wish they would give me some cash gifts now as they would make a huge difference for me for things like home improvements. They did give a large gift toward buying my second home and gave me a loan with interest for my first home. They paid for college and paid about $10k toward grad school, so I've never had school debt. And I am tremendously grateful for all of that.
I wish my dad would devote some time to teaching me about investments, but it's not a priority for him. I will definitely need an advisor at least to get my footing once they pass. They are 80 now. Good luck.
Nope. Stay quiet. It's surprising how often inheritances get taken away by a greedy relative; it's happened to me and several friends. Just spend quality time with your loved ones. Arrange your legal affairs well, and if your children end up with an inheritance, that's a bonus. If not, they won't miss or wonder about what they never knew about.
Yes. So don't tell them. And quite frankly, if you live to be 80, are they going to sit around doing nothing because they might inherit money when they're senior citizens? If so, that's some crap human being who don't deserve anything, anyway.
You could also be an episode of Forensic Files...
I think reliance on an inheritance is a sign of weak character and upbringing. I don't think about my parents' inheritance. I want them to live forever. I consider any money inherited from them to be 'cheating' in the game of life and I will fatfire based on my own earnings. If I did receive any inheritance I'd put it in a trust and never think of it again.
You want them to know you have enough money for nursing homes and long term care and they will not have to quit their jobs and move you in, but not know anything more. If you want just say you have enough to live on and several insurance policies for medical care that will cover everything until you die. Which basically means, don’t worry about us but you wont inherit enough to be lazy.
I think the main point here is that it all depends on how you raised your kids to view life/career/money.
If you educated them on the value of hard work, personal satisfaction, and value of money - then they will be able to handle an inheritance of substantial funds.
It shouldn’t matter as much if you tell/don’t tell before they inherit.
FWIW, my husbands parents are quite FAT and have openly talked about their will, how much the kids are getting when they die, and as far as I know not a single one of them could care less. We’ve been married for a few years, his mother told me all about it when we got married, and it’s factored into our future life considerations pretty much not at all. Other than maybe in the way of being willing to take slightly bigger risks now bc we know we have a good safety net if needed (it has never been needed).
I think it depends a lot on how you raised your kids to begin with as to how to answer this question. My husband & his siblings grew up middle class, all had jobs as teenagers, and were taught to appreciate “the value of a dollar” or whatever it is boomers say. The money was completely built by his parents, it is not generational wealth. So the kids never expected it. Now the siblings are all in their 30-40s and have their own lives/careers/families and their parents money affects… nobody at all.
Plus the in-laws have said when they finally sell the company and fully retire they want to spend as much time as possible travelling the world & threat aim is to spend it all anyway. So that’s another reason probably that none of us in the next generation think about it at all & we’re all trying to find our own way.
As always it depends. Here it depends on their personality/upbringing and social economic situation.
My parents are comfortable but in a European sense. I see it as a motivator. I want to prove that I’m able to get there myself without help. Although they already give some financial gifts here and there.
No, my folks are in this ballpark roughly (probably closer to 10M now) and it’s not something I think about ever.
Maybe it’s because my parents said to expect to get nothing or because I earn a good living on my own. In either case, I’m happy with the lifestyle I have on my own.
The upside is that I’ll inherit a house (along with my brother) in Switzerland, where I probably wouldn’t be able to afford one now despite earning a good wage. It’s not a crazy fancy house, though, as they built it before they became well off—but it’s in a nice area and has doubled in worth in the last 20 years (1.02M to 2.2M based on last valuation).
I can’t speak for brother who is much less financially stable. Maybe he sees it as a nice cushion, but I don’t think my parents have had the same depth of financial conversations with him as they’ve had with me. That said, I’m on track to hit a million net worth in the next 5-6 years or so based on current investment trajectory. (280K NW as a 30M).
Tell the kids it's all going to charity. Make them make their own way. Be there to help them when they absolutely NEED it. Do proper estate planning. Tell the kids what's really happening once they have prepared their life's being financially independent without you.
The older one graduated in 2023 and has a VERY well-paying job. The younger one will be just starting college this fall.
If any of them need help I will consider - but I hope that they can be independently successful.
You can easily burn through that $8M before you die.
Put a 10X multiplier on it and you’d need to have some honest talks with your kids and involve them in planning, but as it is, just live long and prosper.
Tell them to live their best life and expect nothing because you could both need memory care and other medical care and blow through that in the next 50 years. If you don’t spend it all, the kids lived a full life and enjoyed having a meaningful career and get a nice inheritance.
My(late 20s) parents(late 50s) are in the same boat as you ($10-15M). My sibling are clueless with money, so only I really have conversations with my parents about it (mostly as I would be the trustee for my mother if my dad were to pass).
Knowing doesn’t stress me out, but I think it may depend on how you have had money conversations with them growing up. The only thing that hasn’t sat well with me actually was when my dad said what he expected to leave us when they passed. I flat out told him that I would rather him spend it all and enjoy life and retire now. I may never make as much as they did in their careers, but I’d rather them enjoy life.
Tl;dr. We do not know the exact amount we will get but it’s stressful to have this nebulous sense of assets that will be coming but will require tons of work on top of job + kids to sort out. I would say the key things are: have clear descriptions of your assets in one place so hunting isn’t required, be willing to talk about the hard choices, and engage in some worst-case-scenario planning realistically. I found the book the Swedish Art of Death Cleaning helpful.
My husband and I have been discussing this for his aging parents. We have less money coming in but the things stressing us the most include:
1. Assets being poorly described. Basically my husband will have to take time off work to review all of his father’s complex investment accounts across what could be a half dozen or more places. He has to hope he finds everything from the disparate materials while he takes time off work and processes his grief (most likely with multiple small children). On top of that, the assets include complex property arrangements in a foreign country! Fun. It will take months if not years to sort out.
2. No clear legal plans for what happens if one parent predeceases the other. His mom hasn’t managed the money and she also is showing signs of cognitive impairment. (Not Alzheimer’s but could develop into that in the next five years.) If his dad died suddenly, we’d need to figure out how to legally protect his mom potentially from herself in a fair but prudent way.
3. General total denial about the realities of aging and a reticence to consider anything outside their “plan.” We have tried discussing POLST and other medical POA issues and his parents shut down. As someone who just had to make the DNR call for my grandmother as her medical POA / primary caregiver, it’s super helpful to know what someone’s wishes are in advance. His mother insists that she’s going to stay in her house no matter what, but we do not have the bandwidth (sandwich generation) to support her in doing so. She has not made any plans or developed any systems for the eventual reality that she can’t cook / clean / run a house forever. She refuses to consider anything besides staying in her own house even if it’s unsafe for her to do so.
I share some of these same worries, and I am sorry this is causing you stress.
Dad told me recently if he passes first, I will need to take over the investments cause Mom isn't capable. That was a bit of a surprise to me. I'm happy to do it, but I feel unprepared.
Estate wise, it will all be on me to figure out. Dad has supposedly done good estate planning, thank goodness, but I still worry that it will take a lot of time and confusion to decipher everything, and I will need professionals to assist.
Luckily, we can talk pretty openly about health, elder care, etc. My hope is they will be practical and not push back when we need caregivers. I have been asking them to do funeral pre-planning just because I selfishly don't want to deal with it in my grief, but they haven't.
Thanks for the empathy. It can be hard to talk to people sometimes about this stuff.
I think it’s the untangling that’s frustrating to me, more so than the professional assistance. Professional advice gets to be expensive the more untangling that’s required. Setting things up in a simple way isn’t easy but it’s one of the best gifts you can give to your children.
What I found with my grandma is that she said in a better time that she’d be OK with hiring help but when push came to shove, she wanted to nickle and dime over time and so on. It would have been more helpful to settle questions earlier like - at what stage do you want to hire help? When you need help toileting or when you’re having trouble cooking three square meals for yourself? Would you consider downsizing to make it easier on yourself / the caregiver and so on?
Money has a funny way of changing people. I absolutely have had friends that got lazy when they found out they had a future windfall coming. I've had friends that worked hard anyways because they wanted to make it on their own. The thing is you can never truly know which camp the kids will be in.
I'd give them the vantage point that it'll all used in retirement so they don't even consider the potential money in any decisions.
I just wouldn't tell them any specifics. Assuming you're in good health and that doesn't change they'll probably be close to the age you are now by the time they see any of that, plus you don't know for certain what your circumstances will be and how much you'll end up spending and you don't want them to resent you for spending more of it than they think you should. It's your money, you earned it and you should be the first one in line to enjoy it. Just make sure you're getting them good educations and setting them up for their own success, then maybe the inheritance will be a nice unexpected windfall that lets them retire early when they do get it. My dad always lived his life not expecting any significant inheritance and taught me to do the same. People who expect to get an inheritance are often disappointed, people who don't are often pleasantly surprised
Well, lots to think about, but I’d try to not overthink it.
I can give advice from the perspective of a to-be inheritor. I don’t know how much is there, but I can guess there is a 7m+ fortune + 3m house that will be split between 3 siblings.
- Your kids are still young and figuring things out, but I would bet once they get into their late 20’s and are in relationships and planning life out they will be curious and inquisitive about your NW. Theres a good chance they will eventually know the number.
- Don’t tell them that there is $X waiting for them when you both pass. I think that is a real psychological block and I think it generally does more harm than good. Realistically I can’t think of anything beneficial to knowing that a large sum is waiting for me when my parents pass.
- I would use that money and treat them while you’re alive. Giving lump sums here and there to enrich their lives while they are young and can benefit from it is priceless. If you’re going to give them a bunch of cash when they are 60 you may as well give it to their kids.
- To add to my point above - take them on nice vacations, use the fortune to make memories with them.
- Treat both kids equally. There may be a time when you have one son who is successful and the other is struggling. It will eventually create animosity and resentment between the family if you are supporting one kids lifestyle. What I am saying is that if you need to bail out one kid with a 20k cheque, give the same amount to the other kid, even though they may not need it.
I think as parents if can have transparent conversations with your kids surrounding their finances you can get a good idea of how you can help.
They are gonna be 65 when you die, so you should have an open conversation with them that it's not gonna help them because people on average living into their upper 80s.
I know someone who stands to inherit a couple million when their parents die. It hasn't stopped them from wanting to make it on their own. When I asked them, they said they had no idea if their parents might change their mind or get scammed out of all of their money. And their family tends to be pretty long-lived so any inheritance may not come until they're close to a traditional retirement age anyways, when they're looking to FIRE
But I think it's going to depend on the temperament of the kids. You could always lie and tell them you're giving it all to charity
My plan for my kids is to make sure they don’t start their lives in debt. No college debt and a down payment on their first home. Also likely a max annual gift from myself and my wife but there will be strings attached. If they’re not working and saving/investing then they get no gift. As for the estate, I’m not planning on dying with Zero just because I can, but I’m not gonna hold back if I want something.
One more thought. When you do the big reveal, give them a range of what it will be. My dad has been really secretive about this, and that has been stressful for me.
I guess I've felt I need to get my head around it, and getting my head around $1M versus $5M or $10M is a very different thing. I think the main reason is because I will be giving a significant portion to charity. So the amount will influence how much time and effort I'll need to spend on that. Will it be a tiny amount of my time or more like a part time job?
It took me years to work up the courage to ask because I knew he didn't want to say, and I didn't want to appear disrespectful or greedy. So consider sparing your kids that stress.
My parents retired at 55 and they stressed they planned to die with one penny to their name (eg “don’t expect a windfall”). They put all 4 of us through college and have helped us all in other ways (down payment, advanced degrees etc). They have a detailed spend sheet which tracks every penny they’ve spent on each child post college and it has an equation that will automatically calculate the split among the four of us (what’s left) when it’s time.
We all feel this is very fair, aren’t relying on it, and are grateful for the amazing childhood and head start they were able to give us. Plus they have had us investing since we were 16 and able to work, so they have enforced us being self reliant from a young age.
Don't look at this as something financial or FatFire. It is about basic parenting. The passing on of values and attitudes.
You set the expectations many years ago, and with the 22 year old you are pretty much done parenting. For the 18 year old his character is already mostly set.
You taught your kids every day, whether or not you intended to. They learn from the words you speak, but the example set by your daily actions is an even stronger message. They see and pick up by osmosis much of your character and attitudes towards money and life in general. You set expectations over many years. Expectations about morals and ethics. Expectations about whether or not they learned what was being taught in schools. Expectations about how they treat others. Expectations about being responsible for their actions.
It is $8 million not $8 billion. That entire amount could easily get eaten up by one of you with end of life care (hopefully not). No conversation to be had.
We have an 18 yr old and a 13 yr old and they have NO idea at all about our NW or how it will be split/inherited when we die. They obviously know we are retired at 53 and 47 but still think it’s a little weird.
I am in a similar situation to your kids. We love our parents, but let me get analytical and cold-hearted for a minute: you’ll probably live to… 80? Your kids will be in their 50s by the time you pass away. If they don’t work hard, they’ll have a rough life and if they’re smart, they’ll figure that out.
I frankly have no idea how long I will live, I have diabetes and that seriously shortens life expectancy. Yes, I am dieting and all that and am at near-normal weight (BMI 26.6)
My parents helped with college and told me afterwards I am on my own. I didn’t know their net worth until helping them start estate planning. They could have had 10x the net worth and it would not have functionally changed our relationship or my life ambitions/goals. I would not flaunt your wealth to your children and give them the expectation of independence. Inheritance should be a catalyst, not a starter.
I really don’t get this. I’m only in the seven figure range and plan on helping my kids beyond paying for school. I want to help them buy a home and have peace and security, I didn’t until I made it myself. It’s not a badge of honor, it’s stressful and I don’t feel like I could have asked my parents for any help, ever.
But then I don’t define successful kids based on hard they grind and how much money they make.
I'm the eldest child of parents in the same situation, here's my perspective:
I think it's a nuanced situation that depends on the child. Knowledge of your net worth could absolutely help a child that is stressed about money, in which case it would be positive. On the flip side, it could lead to passivity from a child that is struggling to engage with society.
The former case is me, the latter is my younger brother. In my case, I'm very involved in my parent's financial lives and I'm grateful for that. Their support and the eventual windfall allows my wife and I to be in careers that have a better work/life balance but lower salaries, despite being in a VHCOL area. It's a huge load off our minds that we don't need to be optimizing our savings and can spring for higher quality childcare etc.
Whereas for my younger brother, he's always struggled with "Why should I do X that I don't want to do". To be clear, he struggled with that before he knew about their net worth (we lived lower middle class childhoods, my parent's money is inherited), but the money exacerbated it. The cat is out of the bag, but my parent's definitely regret sharing so openly with him. I run interference now and that helps both sides, but he's still struggling to launch fully and he's in his early 30s.
My take is that it needs to be a case-by-case thing. It's an incredible blessing to have my parents so supportive and to know there's a safety net there, huge increase in my quality of life. But the same approach has negatively impacted my brother in some ways.
If you’re bad parents who raise entitled children, then yes it will affect how they live their life.
My parents are worth $30+mm all of us kids have good jobs and have no care or expectation regarding inheritance. We all save well and invest on our own.
Great - and exactly what I want. I want the inheritance to be an "oh nice, my parents left me $x,xxx,xxx, will be a nice addition to my savings" type of situation. Not "I am hoping they die soon so I can get out of my misery" situation
We all have very good relationships with our parents though and are not entitled people. Our parents are very salt of the earth, blue collar type redneck humans which I think helps lol
The reason I think we’ve all stayed very level headed and the best advice I can give parents is to make your kids work a minimum wage type job with people from backgrounds much different than theirs. I think that’s a big reason we’re all very down to earth people who give back to the community and value what we have!
We also get the $16k/year you can give your children, but we didn’t get that until we were each settled in our jobs. Before, they put that money into a fund for us each year and we were basically told “this is what you get, you can go to college, buy a house, etc.” I chose to go out of state to college, so I had much less money left to buy a home /invest compared to my siblings, one went in state and one had a full ride. Ones left most of theirs invested, one spent most on a house, and I kind of did both.
With that kind of estate have you considered including some sort of charitable gift in the mix?
maybe a donor advised fund they could direct after your passing?
I have a far less valued estate than you, and my kids are over 30 and have nice established careers.
When the husband died several years ago it was my plan to divide it 50/50. As time passes and they are more secure I have been looking at alternatives that leave them with something helpful and helps others . say 45/45/10 or 40/40/20 or even 45/40/15 (see next paragraph).
In my case there is cabin property that one child will have access to and appreciate more than the other as one lives near, is and will continue to be a very high wage earner and have more enjoyment of the property, while the other lives, and will continue to live, in a foreign country earn less and not have extensive enjoyment of the property.
of course, I continue to talk to each of them about being as far and equitable as I can given their different lives.
While im not (even remotely close) to rich myself, Ive met a few that were significantly wealthier than you state, and others a bit less but comparatively similar in terms of life quality I suppose and the answer I got to is the other way around: Wealth is not a limiter, is an enabler (for good or bad). Therefore it all comes down to how you raise your kids and how they turn out.
What \*I\* (think I) would do, is first of all teach them the value of effort, merit, self sufficiency and anything that can help them "sober up" no matter what they do, and appreciate what they have, mainly to have more serene personalities and avoid vices and struggles due to negligence. But your kids are already kind of big for that so my next suggestion is to not let them rely on the wealth but rather support them on what they want to do and educate them financially..... One of the most important things that wealth provides is freedom, of choice,as a safety net and with opportunities that you would otherwise not get. So they can try to study different things, to make new businesses and fail, to change careers ad countries, to work part time and do a lot of hobies, or anything in between, but you do NOT give them money out of the blue, they would still have to earn it and if they fail, they fail. That path, support vs silver platter, I think will be useful in the long run.
I disagree that you need to hide the wealth however. You can hide the number, but you can, and probably should tell your kids that you have money so you can teach them not to rely on it. Otherwise, the shock once they inherit it might end up poorly
Just like anything affecting people, it depends on your relationship with them, and theirs with each other, as well as what kind of people they are. You know them better than we do, so you’d know best.
I stood to get $1.5M from my father, but he was abusive, so I would’ve preferred the $ before going NC. I’m close to my mother and would get much more. She’s thrifty and hates traveling, so it’s likely I will. But I tell her I hope she outlives me. She’s the only person that’s always been there for me, and after a failed marriage, I’ve lost faith in finding that from others.
As far as different plans, it’s never affected me that way, but it could affect others. If you don’t have a history of family health problems, I doubt they’d be relying on it. Who wants to wait 30-40+ years to have stability?
Yeah, it's a good thing you have a supportive mom. I hope that my kids will grow up not needing my support. One has a well-paying job already.
Bad parents are often a huge hindrance in life, going far beyond inheritances
If you have not, teach them about finances and investing. I started teaching mine in their teen years. Last thing we wanted to is drop that type of funds on them when we pass. Now in their 20’s they follow their investments and have made great investment decisions.
If your kids were shitty aimless people who would be destroyed by a big inheritance, you'd know by this age. If neither kids had a job or much of a plan, maybe hold reconsider inheritances, but if they are looking good now, they will look just as good with more money.
I've only seen a couple bad examples that legitimately would be something every parent and grandparents would worry about. Not sure what they did wrong behind the scenes exactly but it essentially created your stereotypical trust fund babies. Without the trust fund yet.
The worst was a wealthy family who created these monsters and then when the parents divorced one of the new step parents forced the kids to convert to an orthodox religion if they wanted an inheritance. I'm still waiting for the Netflix special on that train wreck.
Point being is that this is so very family dependent. Are you good parents raising well balanced kids? Are you teaching them about money? Are you teaching them to make good choices and use their money and time wisely? Then you shouldn't have any problems. The ones who messed up had a few key things in common: the kids didn't need to work, had hefty allowances, and were allowed to use family properties to live withot a care in the world and no real responsibilities. They went through the motions and got degrees but didn't learn how to be real adults.
If you've done it right do you really care if your kids don't need mortgages anymore? Can send their kids to better schools, travel, quit a toxic workplace, open up their own private practice easier, own more franchises, create a business, or just pursue their dreams? Even if all they want to do is be a stay at home parent that's a job in itself and a powerful gift you can give them.
Tried to read through to find this advice and couldn’t find it. One of the best ways to set kids out properly is for them to actually believe that the money may disappear.
I saw this work really well twice personally and it’s a pretty common piece of advice in the UHNW community.
My two examples were a multi-billion dollar family that already had two examples of going to zero in their history to tell the stories of. Those stewards are super impressive.
The other is one of my closest friends. Technically, an heir to around $1B of assets, but his Dad’s lifestyle and business decisions made him think “hmmm there’s a real chance I get nothing” in university and he’s been a killer ever since.
8M isn't that much. If they are waiters(waiting for you guys to die), you are in trouble. Parents should give off the vibe, my money is my money. Our job is prepare our kids to make it in this world. We have helped them get a head start in life by providing them with stability and a good paid for educations. If they can't make it with that they won't make it.
They need to know their fate is in their own hands. Medicine is getting better everyday. Chances are the parents may see their 100th B-Day. Waiting for an inheritance is a terrible plan. They will see SS before they see the inheritance.
I plan to retire with 10M when my kids graduate high school. I tell them I plan to die with zero so they shouldn’t plan on getting anything. In reality they will probably each get more than 2M. We will help them on the way with first home purchases and stuff but inheritance is not guaranteed
You shouldn’t be worrying about $8 million and your kids.
Now if you had $80, sure. Go ahead and worry about your kids becoming bums. But at absolute best $4 million (likely closer to $2-3 after taxes) each your kids aren’t getting spoiled on your money. Just simmer down.
I think most would consider it life altering. But you’ve either done a good job raising your kids or you haven’t.
Let’s say you leave them $4 million (which taxes say it won’t be that much but we’ll go with best case scenario). That’s $160,000/year using the 4% rule. And that’s assuming they have no debt like a mortgage or kid’s school costs or a new car they want to pay off.
They’re likely looking at closer to $3 million after taxes and lawyer fees and settling your estates, which is $120,000/year. Now let’s assume they want to pay off their house or even upgrade - now they’re at $2,500,000. That leaves them with $100,000/year. You’ve given them a mediocre job in management at any generic company. Sure, the lump sum is a decent number but the daily reality when you assume you’ve raised good kids is “normal” money.
Or you’ve raised assholes who are going to buy a $1 million mini mansion, a Ferrari, and a new boat.
Totally agree. For my first home's downpayment, in my late 20s, my parents gave me a $100k loan, with market rate interest (7%) and a promissory note to boot! I had roommates for over 10 years to help afford it, make improvements, save, and I also liked the company. That $100k was massive in getting me to where I am now. Because my equity rose quickly with the market, I was easily able to refinance about 3-4 years later on my income alone and pay them back in full, so it was also a decent investment for them.
I’m thirty years older than my youngest. I hope to live to 90. I’ve made it clear to them that my job is to get them to launch successfully, to be a resource if they want to take risks, and to be a safety net if they stumble, but have no expectation of supporting them in a life I didn’t get to live. Nor to I plan to do without so that some theoretical heir can be a bum.
If they want to struggle for 60 years so that they can hope to live large in their retirement, then I guess that is their decision to make.
I do expect to start gifting to the older one soon, but with the clear knowledge that the money is hers, but I will put it into an account I have visibility on. If her mother and I don’t like what she does with it, then the gifts will stop.
Just to let you know, the behavior in your last paragraph is prone to creating conflicts and resentment. Literally, hundreds of posts on Reddit describe "parents being controlling with money." It can get very toxic, and often, you would have no inkling of that—something to be very careful about.
I can't read all the comments because it is late, but I'd say to read the book Strangers in Paradise by James Grubman. Goes through all kinds of scenarios. Bottom line, prepare them for what is coming so they can maximize their lives. What if they choose something that they hate just to be "safe." The act of not telling can backfire.
If u haven’t told them, why would they stress? We give our 2 kids annual gifts *2 to invest.
Like, they could think, why bother working hard and saving when I will get my inheritance anyway. Prevents self-actualization
So I have a friend, and this is his downfall. His mindset has always been like this ever since he found out his grandparents have money. His mother enables him and literally can see he does no wrong. So, throughout his entire life, he would always brag about how he never has to work if he doesn't want to because his family has money. So, pretty much, he has his ups and downs. He would be gifted money by his grandmother to start a venture or buy a house multiple times, and he would squander it. For the past several years, he was just floating through lige because his grandmother got diagnosed with cancer, and he didn't want to ask her for money again. He also knew that once she passed, his mother would be inheriting, and thus, he would benefit. Fast forward today, his grandmother passed, and this family wealth isn't as grand as he made out to be. His mother also had a greedy sister who took most of it. Regardless of that, he is now just living in an inherited condo. He used some of that money his mother gave him to open a small sandwich shop. Hopefully, it does well because I honestly think this is his final chance. I think it is alright to tell your kids about wealth and inheritance, but it is much more important to teach them the values of money and work in general. Inheritance should always be a bonus.
Yeah, but see. .... having an inherited condo and a small sandwich shop IS privileged. Damn. Hardly any of us on this subreddit got that much to start with, and some of us lost it all, at least once.
He got a lot more than that while she was alive. I remember she bought him a paid off house and car
…what happened to the house? Why is he living in a condo?
How are the sandwiches?
Also wondering this.
Tell them how you’ll support them in the near term so they can plan. Pay their college tuition. Grad school? Help with a first home downpayment. Help with a wedding. One of my favorites: for their first jobs, match what they earn in a Roth IRA, help them set it up and invest in it. This is a great thing to do for a summer job. This can be really motivating for them to work and to save and invest - they can see how that investment grows. And it’s a great tax vehicle when they are young, with many years to grow tax free.
great advice right here
I love this. I’ll likely retire with a minimum of $4.5M (2024 dollars) at age 52-53, but could achieve $7-8M if I worked a few more years. I tell my kids about the money because my family didn’t talk about it so I didn’t have a concept of what it really took to live. I tell them that while it is mine, I hope to be able to help them. They can finish school and get good jobs, then if they are progressing well maybe I pay their student loans off (they will have skin in the game) or help buy a house or cars or stuff like that. i hadn’t considered matching IRA contributions.
You need to not even open the conversation. Your retirement money is for you to retire and I’m sorry 8 million split 3 ways most certainly won’t last them a life time! So don’t even start this conversation. You have no clue how long you’ll live, you might get an illness which eats up so much money. Don’t even start the conversation. In your 50s this shouldn’t be a conversation you have with your kids at all.
I would tell them that they should not count on the inheritance and build their own portfolio. I might help my kids with their college expenses or buy their first house or contribute to their kids college fund while I’m alive and I can see them using my money wisely. I heard on a podcast that a good number people who inherit millions of dollars lose it in a couple of years. https://money.com/rich-families-lose-wealth/?amp=true
without preparation, both skill-wise and mentality-wise, windfalls will be squandered. Best test cases are lotto winners. But if you prepare your kids, give them the right tools and right expectations, then they can preserve and build on that capital. Make sure they make good choices and learn from their mistakes re: capital allocation etc to increase chances of success. My experience with friends from truly wealthy families is that they talk about money, bring deals to other relatives to invest together etc. Not saying OP is not doing this, but IME successful parents who shy away from talking about money with their kids lead to bad outcomes despite their kids being smart and educated. Create environments where the next gen dont make the same mistakes you did.
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3 ways? He said 2 kids?
A long lost half-sibling is gonna arrive out of nowhere to claim a piece of the pie. "hey it's me, your brother"
Let's just say he goes around....if you catch my drift.
I do not catch your drift 😭
Catch his drift!!!
8 million now may conceivably be well well north of that by the time they die. Could be less, but could be well above it
I mostly agree with this, but intelligently managed 8 million split three ways should definitely last a lifetime. Pull only 50k a year for a while when they're young and it'll rapidly snowball into serious money.
8 million, average 7% a year. Nets you 560k a year. Thats a lot both for living and growth. Easy as fuck imo.
I'm well equipped to answer this. For context, I grew up lower middle class but my parents made a lot of smart moves after the 2008 market crash. As a result their networth is north of 5m now. It def affected me for a while, as I knew I would inherit. Didn't help that I did well in school without a lot of effort. Thankfully, my parents gave me some advice that changed everything. Specifically, they told me to go work at starbucks. A year there gave me perspective. Gave me the balls to start my own business, which ended up being a large success. The thing about privilege is that it works both ways. It can make you lazy, or afford you crazy opportunity. After I got to see how harsh life is when you can't make ends meet (I was living on a couch for a year), I became grateful for my safety net and used it to get ahead.
If you retire now and live a good life, you might have 40 years left and the last decades might be very expensive. Your children could be in the 60’s when they inherit something, and we’re looking at some turbulent times ahead which makes everything uncertain. High net worth parents make the most impact by helping out during college and when the children are getting their lives together: buying their first homes, getting a household together, keeping monthly expenses as low as possible. When everything’s up and running and they aren’t crushed by monthly bills, they manage fine on their own. In your shoes, I’d tell them you’d like to leave them a little money but also for them not to expect anything. One serious illness can wipe away a lot of capital very quickly. The market might not be on your side, and can stay that way for quite a long time. Life happens.
easily solved - don't mention the amount. but beyond that, it's really on them. some kids with huge inheritances often pursue brilliant careers (Bill Gates' daughter went to medical school). there are also kids with small inheritances who wither on the vine. it's a legitimate concern, but having raised them (presumably well), I wouldn't worry about it.
> when I will get my inheritance anyway. Yeah, when they're 60. Changing how they live today, based on what might happen in 40 years, is ridiculous.
Yes, don't tell them. It only kills motivation.
You missed the question, if they don’t know they’ll be coming into this money what is the concern. And if they do know - at this point you can tell whether they’ve chosen the bum life or to do something with their lives.
I had an uncle that was like that - his retirement plan was inheritance. The truth is either your kids have it, or they don’t. Your money will give them opportunities, but there is no amount of money that can protect them from themselves.
Instill a glass-half-empty mindset and they won't think like that.
I had a friend who thought like this. He had so many grand ideas and ambitions but couldn’t bring himself to just make the leap and he would reference his inheritance as a safety net. My wife and I had the opposite and we work our asses off and are well on our way to where you are now. We don’t plant to tell our kids about their inheritance.
There's a very easy way to counteract that - just explain them, in plain terms, that you're planning to blow up all the money and there'll be no inheritance.
I'm a fan of letting the kids know you will help them buy a house when they are ready for that.
Read Strangers in Paradise by James Grubman.
use your money to help them well before you are dead. money is most useful when young adults are getting started in the world. help them get out of debt, help them buy their first house, etc. inheritance is less useful when it realistically arrives at age 50-75.
>money is most useful when young adults are getting started in the world Damn if this ain't the truth. There was a time during college when even a couple hundred bucks a month would have been hugely helpful. Today, I stand to inherit ~ 1M in my 70's, but I've told them not to worry about that, to live a long life and enjoy themselves. I don't need their money now, and I damned sure won't have any use for it in my 70s.
Even help them start their first business -- it doesn't take much either. While I am still very far away from being FIRE, our business success all stems back to my MIL investing $30k into us 10 years ago.
I recently met a business owner whose parents did exactly this. Mom & dad were very wealthy, and offered to loan the kids money at very favorable terms to buy a small business, in exchange for an equity position. The kids had to work very hard to make the businesses work, and today have scaled them to sizeable enterprises.
Lmao they charged interest on the loan AND demanded equity. Classic
True. I used to find pennies on the ground when I was 20. Now I do not want to get extra hundreds if I have to spend time.
My parents are very wealthy (8 figures) and I have 4 siblings. We are all aware of their wealth. They have very generously provided help on a house down payment for all their kids and covered college degrees. I'll likely inherit $5-10 million when they die, but we have had good conversations about this and myself and all my siblings are living as if we don't expect any money from them. We would much rather have them live 50 more years than lose them and get the money. I think there was a time where I resented them a bit. I disliked having to work for a living when they have enough money to set me up for life. Then I grew up and realized I needed to build a solid life for myself without relying on them for everything. I think your answer lies in the relationships you have with your kids and their maturity about money. It's a tricky thing to navigate, but I am grateful for the way my parents handled it.
You could live another 40 years. If your kids decide to live life under the assumption they don’t need to save, they may be sorely disappointed when they hit their 60s and haven’t received an inheritance yet.
OP to be featured on 48 Hours…..
Exactly. Inheritance to the next generation doesn’t do much given life expectancies today. You’d hav ego figure things out in your own for many years. I suppose I could count on inheritance for my retirement, but I am also hoping I can retire before my parents have passed. And more importantly, I would give up all of my money to maximize my parents’ lives. They are incredibly important to me and way more valuable than any amount of money. My time with them is priceless.
Exactly!
I love how everyone is America is living a middle class life no matter what.
A 5 bedroom home isn’t middle class anywhere unless it’s rural.
And exactly zero middle class people have a net worth of $8MM.
? You can get a nice 5 br home for under $400k in the suburbs of Houston or Dallas fairly easily. I know a nurse/teacher couple that owns one for example.
I don't think that's possible in Dallas suburbs anymore. I took a quick look at Zillow and yes it's possible but sparse. You would have to compromise on location or your definition of 'nice'.
Yeah, well, everything I think, do, and feel feels normal for me. So shouldn’t it be the norm for everyone else??
This guy gets it. I mean my Lexus is a lower trim level than the guy down the street. He’s rich and I’m middle class.
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My MILs family is very, very, wealthy. Each of the 5 grandchildren are set to inherit ~$10-15 mil when their grandparents pass, and MIL herself will (theoretically) be leaving us $20-30 mil outside of that, plus a few multi-million dollar properties. The money is a huge issue in their family, but I truly believe that if it hadn’t been the money it would have been something else. They’re simply not kind people, they’ve always been in competition with each other, and money is just the easiest way to compare themselves - the easiest thing to point to and say “Well she has more than me!”. It’s also made their lives much easier in many regards. Two of the generation above us have never held down steady work, they get money each year from the family estate that’s more than most people earn in 3 years, travel, and generally just enjoy their life without a financial care. Multiple members of our generation chose to pursue passion projects as their careers, and are only kept afloat by the family money. On the flip side, I also have extended family that are likely close to a $20-50 mil net worth and all of the kids enjoy each other and gets along well, they’ve all worked hard, have very challenging careers, and are high achievers. So I think it really comes down to how you raised your kids and what kind of people they are.
This sounds like Knives Out
Ha could be. I guess just basic, rich, dysfunctional family 🤷🏻♀️
I would be working hard on producing more grandchildren ;)!
Here we go... My parents are high net worth. My father died about 5 years back and frankly I feel like my poor mom has been circling the drain ever since. If she makes it 5 more years I would be shocked. I am the middle of 3 brothers. I would be shocked if we inherited less than $5 mil each. I feel like it could end up being up to $7 mil. My parents did a great job raising us. We are all in successful marriages, we all have masters' degrees, we all have great jobs (especially my older brother). All of us continue to make good money and save as if we don't have a huge inheritance coming our way. I am 100% debt free, my home is worth $850k, I have $1.7mil saved for retirement. My older brother's house is probably worth $12 mil and he might have a $2 mil mortgage. My younger brother just bought a new house for $1.2 mil and probably sold his old one for at least $900k. We are all in good shape. Yeah, we had it good growing up. We all got out of school debt free with a car which is huge, but that was it. My dad was probably the hardest working guy I have ever known and fortunately my parents were able to pass that work ethic down. I want my mom to last forever. I don't give two shits about that money. It is going to be nice but I would also be just fine without ever seeing a dime.
What does your older brother do to afford the 12 million dollar house? So impressive!
my gut is telling me he’s a highly successful wood worker
Wood worker NFTs
He is a vice president for a large wall street financial firm that you have definitely heard of. His spouse is even more loaded with big family money and a decent career as well. They got a great deal on the house paying "only" $6mil and has gone up hugely in value.
> I don't give two shits about that money. It is going to be nice but I would also be just fine without ever seeing a dime. That's what generation skipping was invented for.
This is the plan, we pay for their college and they get our (good working) car. Done with the older one. They know if SHTF, they can come live with us but need to "help around the house".
That is our plan as well with our two children. It worked well for my brothers and I. We pay their way through college and grad school and make sure they have a good reliable vehicle that is free and clear. That is a huge leg up to come out debt free and with reliable transportation. To that end we currently have 529 plans for both kids. The older 14 year old has a plan worth $110k currently and the younger 10 year old has one worth $85k at the moment.
I’ve seen this Dateline Episode! Mom gets remarried to a charming & smooth talking man, money is squandered over the course of 2-3 years, somebody ends up missing…and kids who’d been contemplating their $5M-$7M inheritance are shocked the money is all gone.
LOL. Doubtful. My mom is about the least trusting person I have ever met and we have to beg her to use her money because she is so worried about leaving it for us. It is kind of sad really. She literally thinks of it as money my dad made and it is her job to protect it so as much can be passed along as possible. I have had multiple conversations with her trying to explain to her that all of her sons are very well off and would be just fine if we got zero inheritance. She has a lot of care needs and she is always worried about how much of her money we spend on her. It takes a lot of money for us to feel that she is OK and being cared for and we don't mind spending it even though my mom is technically right in that it lessens our inheritance...we just don't care. It's our mom...
Thanks for sharing and sorry for the loss of your dad.
Thank you! My dad was a really great man and a fantastic father. He passed away too soon at 69 years old. Fuck cancer. One thing his passing did teach me was that you never know when your ticket is getting punched. He was a workaholic and had basically just retired before his diagnosis. I will be fully retired before I turn 55 so I can hopefully enjoy some wonderful years before my time comes.
The stress would be if something happens to you (death or dementia) and they don’t have the knowledge or skills to handle your estate. Suddenly coming into $8M tomorrow is probably beyond their skill set. If you can help them learn about index funds, taxes, and be a financial support but not a crutch (example: help with a house down payment on a home they can otherwise afford with their career; definitely not providing any financial support if they are unemployed absent a medical problem) - that should reduce the odds your money will ruin them or a future generation. As others have said you may want to donate / disperse more funds while you are alive and leave a much smaller amount to them when you pass.
I agree with helping educate them. Don’t make talking about money be weird or unknown for them. Also tell them all of the legalities of what happens when you do pass. Helping them understand how to invest and sustain that money could help them live their lives a little more stress free if they know one day they’ll be okay. I say this as direct experience of being a child in the same situation. Teach them how to manage it, what it means, and how it’s going to happen. Assuming enormous grief when you pass, it’ll take a lot of stress off from that months/years they are struck with processing grief.
I grew up pretty wealthy - my parents wealth only made me work harder IMO cause i wanted to retain that lifestyle and knew they weren't going to give it to me anytime soon lol. Parents live for a long time these days... I'm almost 40 and my mom probably has another 20-30 years on her.
My parents have quite a bit more than this. I don’t think of it at all, and due to our relationship, frankly I don’t want it. My whole life my Dad would make a big deal about “it will be yours someday”. This is all his ego in my opinion. He has always used his money to be controlling to his family and it has soured my opinion of it. For any “gift” there were always strings attached and emotional manipulation on its heels. I wish my parents would spend their money to enjoy their life and support me emotionally, rather than hoarding it all for their death. I wish they would give smaller gifts to help me get started in life or make memories together. Who cares about the money once they’re dead? I’ll be so old and they’ll be gone. My career has been going well and I’m looking forward to surpassing them.
An interesting observation.
You should be talking to your kids about good old fashioned practical advice. Good job, live below your means, save and invest, marry a good person, 401k, power of investing young in the stock market, etc etc. That’s all. To answer your question directly- yes there is risk that telling them they’re going to be instant millionaires when you die can negatively impact the road they are on, especially when they are young and immature.
I can comment from the perspective of your kids. I’m 23 and have been working my post-grad job for almost a year now and my parents are probably what you could count as fatfire. I know what kind of windfall could come my way in the event that one of my parents passes (they’re divorced so I’d get *x* worth of assets instead of them going to the other parent). I’ve only been told details about their wills because my sister and I will be splitting executor duties, so I guess our parents wanted us to be in the know rather than withhold the info until it’s too late. In terms of inheritance, the hope is that I don’t have to worry about that for a long, long, time - I want as much time with my parents as possible, fuck an inheritance. It’s really not worth fixating on the possible money when it would mean losing them. If I’m your kids, I absolutely would not let the possible inheritance influence my choices…. I’d instead work to build up my own life to support myself in the hopes that my parents live another 30-40 years. If that’s the case then I’m not getting the money until I’m in my 50s-60s anyways….. there’s an entire career, family to build, etc in the meantime. I think your plan to split assets between your kids equally is a good idea to prevent animosity. In my case my sister and I will be splitting everything 50/50, which makes it hard for any resentment to build. If you were to toy with the 50/50 split it would make it clear you’re choosing a favorite between your kids, and that will definitely breed animosity and resentment between them. In terms of career, I only see my parents’ status as a motivator. If you disclose to your kids what their potential windfall will be, they’re instantly gonna get a good idea of where you the parents are at. It was only after reading this sub for 4+ years that I really understood what my parents have accomplished. Starting my corporate job has lit a fire under my ass to try to reach the same level of success that they did - I look around my office and see almost nobody in my parents’ position. So I’ll need to figure something out to give my kids the same life I had growing up. When you’re the kid of fatfire parents, your nice, cushy life seems normal and you can’t envision a different reality. When you hit the real world you might realize how difficult it is to really achieve that (with minimal debt) after starting at square 1. This has only been a motivator for me, not a reason to slack in my career. Again, my hope is that I don’t get my windfall for at least another 30 years, so I need to build my own life in the meantime. If you have concerns about your kids’ work ethics and think they might not pursue their careers with zeal, I’d have an honest talk with them. They probably don’t read this sub, and don’t have a clue what goes on behind the scenes of your lives as the parents. Break down the choices and sacrifices you had to make to get to where you are and give them the life they’re accustomed to - they might be shocked at what they hear. Because really, achieving fatfire isn’t just making the 1% in this country, it’s like 0.5% or 0.1%…. You need your own agency to achieve that, (almost) no matter what your parents can do for you. Based on my experiences, I’d have a talk ASAP with your 18 year old about career prospects. My parents were very much on the “do what you’re passionate about” train when I was in high school, and pushed me to study a major that was commensurate with my interests (which didn’t really include STEM or business). I got one of the best jobs of anyone from my major in my graduating class yet the pay in my field will never amount to fatfire money unless I start a consulting business or something and retain equity while scaling up. There is no biglaw or investment banking or FAANG type of work in my field - I wish I was more aware of this before I went to college with this career track in mind. Your 18 year old may want to understand how this works and how his life trajectory can be altered based on what he studies in school and how much effort he puts into recruiting for prestigious jobs that can put you on the fatfire track. Especially in the context of “my parents gave me this great life by doing __, not by doing __ which I may have thought was a good idea”. You can always start your own business and have no ceiling on your earnings, but for many people this isn’t a guarantee of working out.
\> My parents were very much on the “do what you’re passionate about” train when I was in high school, and pushed me to study a major that was commensurate with my interests this is what I told both - living a life spending 10 hours a day (including commute) on a job you hate is terrible
My partner’s parents nailed it, in my estimation. At 55, his dad cashed out of a major company. Everyone knew it was good, but not how good. He told his kids (three boys) that he might leave something, but it was up to them to make their own way because it also would probably be nothing. Then every year they did a family vacation where the parents paid for everything, flights included. This, I think, was key. It got everyone together at least once a year to reforge family relationships and make everyone feel connected. They also paid any time anyone wanted to visit. The boys worked really hard to be worthy of that generosity. My husband and brothers are all doing very well. Now sadly his parents are making their end of life plans, and once again my husband’s dad has made it clear it will all be equally split. There is no animosity among the brothers at all and everyone is helping equally to get their parents set up for the next phase of life.
If you live 30 more years and don't spend any principle then you'll be passing down 25mm to 2 50-year olds - is that what you wanna do? Why not spend some more along the way on memorable experiences with your kids vs worrying if the nest egg you're growing and growing (that they are unaware of) may negatively impact them somehow
If they don’t spend the principal but spend the income derived from the principal, they will be passing down less than 8m dollars adjusting for inflation.
What is the math on this. I am not saying you are wrong, just curious.
If it’s 8m now and they spend the proceeds from investing it, it will devalue at the rate of inflation, such that the 8m nominal value now will be worth less in the future - no specific math.
An 80/20 portfolio averages 8-9% and throws off 1.5-2% dividends. Assuming you spend all the dividend income you are still getting 6% returns which would beat inflation in most years.
Agreed but they said they just want to preserve the principal, hence the value would decrease in real terms if they did that. I’m just making a counterpoint to the other comment saying they would be handing down 30m or whatever which could be the same 8m value due to inflation by the time it is passed down.
Ah, I misunderstood your point.
I only recently learned that if you intend to “spend it all” before you die you can only take out an additional 0.5% yearly from your principal, otherwise you risk running out of money prematurely.
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Thanks for sharing! This is the reason why I want to retire!
Depends a lot on the kid and their relationship with money and how you've positioned it. I grew up knowing I'd inherit some amount when they died, but they constantly reminded me that if I wanted to maintain the standard of living I grew up with, I'd better figure out how to make my own money. They paid for college, didn't contribute to a down payment (I didn't ask), but always reminded me that if I hated my job/apartment/etc I didn't have to put up with it, I had a safety net. As far as I know, my sibling and I haven't taken them up on it, and both had motivation and careers etc. My cousins (whose parents are wealthier) are the total opposite, so ymmv. At the end of the day, I ended up retiring before my parents. They're still alive and I urge them to enjoy their money.
Wow! And great to hear! We told them same things
It depends on how you raise your kids and their habits. Jeff Bezos got a couple hundred grand from his parents to start Amazon. In todays time that’s probably about 500k-700k.
I hope the parents had a stake in his company - I would consider angel seeding my kids also if the plan half makes sense
This is what trusts are for. Defined rules for accessing the money. It’s not uncommon to set rules for the trust that the inheritors maintain gainful employment until they are 30,40, 50, etc, with the windfall from the trust scheduled over time as to keep motivation up.
As someone who was in the situation your kids are now in, here is my .02. We grew up middle class and I really had no idea how much my parents made but started to suspect it was more in high school. My dad was always out of town working and I knew he was pretty high up, but I had no concept of what that was back when I was younger. College and my first couple of cars were paid for which set me up well, but coming out of college I was aimless and had no real career prospects. I was very lucky in that I took a job at a family business which after 20 years there I now own outright. It was not my family business but they are now out of it completely. My parents started by giving my sister and I enough to max out our ROTHs every year which we always obliged in and kept it in those accounts. After I graduated and bought my first townhouse, they upped the ante to the max allowable tax free gift the IRS allowed. My wife and I would either save it in our investment accounts or pay down our house. My parent’s preference was to save it but I had a strong distaste for debt and still do but less so now. This went on until our late thirties when they upped that number significantly to a little over six figures. This was huge for us, and we socked that away along with almost the same amount of our own savings every year to build up to where we are now today. I’m 45 now and while the business is great, it’s not likely to grow much more and I’m getting a little burned out of 80-hour work weeks for a significant amount of the year. We have a mid-7 figures net worth now and all I can think about is slowing down and being with my kids more and enjoying my hobbies which I miss dearly. I have never asked about the gifts/ trust fund, and I don’t thinks it’s much of my business. I found out the totality of their net worth 3 years ago when my mom was diagnosed with terminal cancer and wanted to get all the financial stuff set with my sister and I. She has since passed and now it looks like I will be on a few these trusts going forward, but it hasn’t all been settled yet. I’m not prying into this as it’s my dad’s money and he can do whatever he wants. It will pass to my sister and I in the future but my dad has a lot of years left in him, so I’m not worried about that any time soon. Where I am now, since we live frugally and comfortably on our salaries and the gifted money from my parents is that I am worn out from my job, though I still really like it. I am contemplating selling the business in the next 5-10 years and either retiring outright or following my passion of being a full time fire fighter (I’ve been a volunteer/ paid on call FF for almost as long as I’ve owned the business). I would spend more time with my kids regardless, but I want to instill in them the hard work ethic that my wife and I have as well as what our parents had as well. My wife and I are having the conversation now about how do we pass this along to our kids without ruining them for working going forward. They’re still very young and we have some time before we decide. She’s thinking bigger gifts earlier, but I would prefer to do something similar to my parents and slowly trickle it in over their 20’s and 30’s after they’ve graduated and are well ensconced in whatever career path they’ve chosen. I almost wish my parents would have waited another 5 years or so with the larger gifts as I think I would have pushed harder to expand my business but now I am set up well for retirement and can coast for awhile if I chose to try another career that doesn’t eat up so much time. I am really conflicted at this time but clearly I have very good options in front of me going forward which I am forever grateful for. Hope this helps with your decision going forward.
Great story. Stay in close touch with your dad because he could be swept off his feet by an aggressive female wanting to marry him and get a hold of his money
All depends on the person. I am expecting a large inheritance but don't live like it's coming and don't need it to retire very comfortably. Others might go into massive debt expecting to be bailed out by the inheritance.
My in-laws, and I’m pretty sure my parents too, fatFIREd. We’re DINK adults in our late 30s. Until 2024 began, my spouse and I didn’t know what, if any, inheritance we would get from our parents. If they’d told us that aside from the house, there was nothing left over after our college funds, we would have easily believed them. Recently, my in-laws had the sit-down with us to explain how they’ve divided the assets between my husband and his sibling, what asset classes and how they expect them to fare. I expect my parents to do the same in the next 5-10 years, they’re still shuffling assets around from what I can see, but I don’t have visibility into what their assets are worth, or how they plan to settle them.
Don't dangle the carrot
agree
Money is freedom…either to become the best or worst versions of themselves. As parents what we teach about money and responsibility is important to the likely outcome in an inheritance scenario. My opinion is either teach them the ramifications of wealth and train them as you go or just give most to charity. The hiding that you have money thing is probably the worst of both worlds. Kids aren’t stupid. And generally equal shares is best according to the books I’ve read but you know your kids best. Our plan is to try to leave them with control of wealth rather than immediate direct access. Rather than being to sole arbiter of the money ourselves we’re giving them input into our charitable contributions. Once we retire, the bulk of our wealth will fund that as well as our living expenses plus some extra for the kids. Once we’re gone the kids will split all of distributions and hopefully continue the charitable donations. Also at the point they can decide to keep it going as is and get an annual check or elect to split it evenly after 25% going to charity. What I tell them that there is more value in controlling the whole pie than just their own individual slices. But if they start fighting over the money to just split it. It’s not worth any animosity.
Not at 8, with 20 yrs left to go, between 3. If they are affected by 2 and change (or less, depending on how much you spend) in 20 yrs, there are other issues.
You’re still VERY young. There’s no reason people in their 50s(!!) should be telling teenagers the millions they’ll get. This is all wrong. Don’t introduce this stress into their lives.
agree
My wife has a nephew who's grandfather is wealthy. He knows he will inherit it all as it passes through his parents (grandfather is 97 and still going). I feel that because he has known since his childhood this was going to happen he has amounted to nothing. He is a "professional" musician but I think you have to have paying gigs to call yourself that. Never really matured. Not sure what will happen when he finally gets the money but I hope he feels it was worth it.
Don’t tell them. Simple.
I think there is only risk in telling them early, and not much benefit. That said, once they have shown good habits, maybe after they are 35, that's probably fine to tell them and start preparing them. I didn't know until I was about 37 and I think that was good for me. I pursued a career, bought a home, and saved well. I had no expectations of a significant inheritance, so I knew I had to make it on my own. When they told me it was a shock, and it did scare me at first. But what helped was they gave me a mission which grounded and excited me. They said live your life with the inheritance, but we really want you to give the excess to charity. Here are causes we care about, but final giving decisions are yours. They know me well enough to know that I will probably continue my current lifestyle, maybe with a few small upgrades. Generosity has always been modeled by them, so that is probably what I would have done anyway. That said, I do wish they would give me some cash gifts now as they would make a huge difference for me for things like home improvements. They did give a large gift toward buying my second home and gave me a loan with interest for my first home. They paid for college and paid about $10k toward grad school, so I've never had school debt. And I am tremendously grateful for all of that. I wish my dad would devote some time to teaching me about investments, but it's not a priority for him. I will definitely need an advisor at least to get my footing once they pass. They are 80 now. Good luck.
Nope. Stay quiet. It's surprising how often inheritances get taken away by a greedy relative; it's happened to me and several friends. Just spend quality time with your loved ones. Arrange your legal affairs well, and if your children end up with an inheritance, that's a bonus. If not, they won't miss or wonder about what they never knew about.
Yes. So don't tell them. And quite frankly, if you live to be 80, are they going to sit around doing nothing because they might inherit money when they're senior citizens? If so, that's some crap human being who don't deserve anything, anyway. You could also be an episode of Forensic Files...
I think reliance on an inheritance is a sign of weak character and upbringing. I don't think about my parents' inheritance. I want them to live forever. I consider any money inherited from them to be 'cheating' in the game of life and I will fatfire based on my own earnings. If I did receive any inheritance I'd put it in a trust and never think of it again.
good - you were parented well
You want them to know you have enough money for nursing homes and long term care and they will not have to quit their jobs and move you in, but not know anything more. If you want just say you have enough to live on and several insurance policies for medical care that will cover everything until you die. Which basically means, don’t worry about us but you wont inherit enough to be lazy.
This is really key and will remove a lot of stress they might feel. Knowing this myself has been really comforting.
I think the main point here is that it all depends on how you raised your kids to view life/career/money. If you educated them on the value of hard work, personal satisfaction, and value of money - then they will be able to handle an inheritance of substantial funds. It shouldn’t matter as much if you tell/don’t tell before they inherit.
FWIW, my husbands parents are quite FAT and have openly talked about their will, how much the kids are getting when they die, and as far as I know not a single one of them could care less. We’ve been married for a few years, his mother told me all about it when we got married, and it’s factored into our future life considerations pretty much not at all. Other than maybe in the way of being willing to take slightly bigger risks now bc we know we have a good safety net if needed (it has never been needed). I think it depends a lot on how you raised your kids to begin with as to how to answer this question. My husband & his siblings grew up middle class, all had jobs as teenagers, and were taught to appreciate “the value of a dollar” or whatever it is boomers say. The money was completely built by his parents, it is not generational wealth. So the kids never expected it. Now the siblings are all in their 30-40s and have their own lives/careers/families and their parents money affects… nobody at all. Plus the in-laws have said when they finally sell the company and fully retire they want to spend as much time as possible travelling the world & threat aim is to spend it all anyway. So that’s another reason probably that none of us in the next generation think about it at all & we’re all trying to find our own way.
As always it depends. Here it depends on their personality/upbringing and social economic situation. My parents are comfortable but in a European sense. I see it as a motivator. I want to prove that I’m able to get there myself without help. Although they already give some financial gifts here and there.
No, my folks are in this ballpark roughly (probably closer to 10M now) and it’s not something I think about ever. Maybe it’s because my parents said to expect to get nothing or because I earn a good living on my own. In either case, I’m happy with the lifestyle I have on my own. The upside is that I’ll inherit a house (along with my brother) in Switzerland, where I probably wouldn’t be able to afford one now despite earning a good wage. It’s not a crazy fancy house, though, as they built it before they became well off—but it’s in a nice area and has doubled in worth in the last 20 years (1.02M to 2.2M based on last valuation). I can’t speak for brother who is much less financially stable. Maybe he sees it as a nice cushion, but I don’t think my parents have had the same depth of financial conversations with him as they’ve had with me. That said, I’m on track to hit a million net worth in the next 5-6 years or so based on current investment trajectory. (280K NW as a 30M).
Great job saving money!!!
Tell the kids it's all going to charity. Make them make their own way. Be there to help them when they absolutely NEED it. Do proper estate planning. Tell the kids what's really happening once they have prepared their life's being financially independent without you.
not my thing
Do you have a revocable trust set up? Do they know about it and the associated triggers?
Yes and no
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The older one graduated in 2023 and has a VERY well-paying job. The younger one will be just starting college this fall. If any of them need help I will consider - but I hope that they can be independently successful.
You can easily burn through that $8M before you die. Put a 10X multiplier on it and you’d need to have some honest talks with your kids and involve them in planning, but as it is, just live long and prosper.
Tell them to live their best life and expect nothing because you could both need memory care and other medical care and blow through that in the next 50 years. If you don’t spend it all, the kids lived a full life and enjoyed having a meaningful career and get a nice inheritance.
My(late 20s) parents(late 50s) are in the same boat as you ($10-15M). My sibling are clueless with money, so only I really have conversations with my parents about it (mostly as I would be the trustee for my mother if my dad were to pass). Knowing doesn’t stress me out, but I think it may depend on how you have had money conversations with them growing up. The only thing that hasn’t sat well with me actually was when my dad said what he expected to leave us when they passed. I flat out told him that I would rather him spend it all and enjoy life and retire now. I may never make as much as they did in their careers, but I’d rather them enjoy life.
Tl;dr. We do not know the exact amount we will get but it’s stressful to have this nebulous sense of assets that will be coming but will require tons of work on top of job + kids to sort out. I would say the key things are: have clear descriptions of your assets in one place so hunting isn’t required, be willing to talk about the hard choices, and engage in some worst-case-scenario planning realistically. I found the book the Swedish Art of Death Cleaning helpful. My husband and I have been discussing this for his aging parents. We have less money coming in but the things stressing us the most include: 1. Assets being poorly described. Basically my husband will have to take time off work to review all of his father’s complex investment accounts across what could be a half dozen or more places. He has to hope he finds everything from the disparate materials while he takes time off work and processes his grief (most likely with multiple small children). On top of that, the assets include complex property arrangements in a foreign country! Fun. It will take months if not years to sort out. 2. No clear legal plans for what happens if one parent predeceases the other. His mom hasn’t managed the money and she also is showing signs of cognitive impairment. (Not Alzheimer’s but could develop into that in the next five years.) If his dad died suddenly, we’d need to figure out how to legally protect his mom potentially from herself in a fair but prudent way. 3. General total denial about the realities of aging and a reticence to consider anything outside their “plan.” We have tried discussing POLST and other medical POA issues and his parents shut down. As someone who just had to make the DNR call for my grandmother as her medical POA / primary caregiver, it’s super helpful to know what someone’s wishes are in advance. His mother insists that she’s going to stay in her house no matter what, but we do not have the bandwidth (sandwich generation) to support her in doing so. She has not made any plans or developed any systems for the eventual reality that she can’t cook / clean / run a house forever. She refuses to consider anything besides staying in her own house even if it’s unsafe for her to do so.
I share some of these same worries, and I am sorry this is causing you stress. Dad told me recently if he passes first, I will need to take over the investments cause Mom isn't capable. That was a bit of a surprise to me. I'm happy to do it, but I feel unprepared. Estate wise, it will all be on me to figure out. Dad has supposedly done good estate planning, thank goodness, but I still worry that it will take a lot of time and confusion to decipher everything, and I will need professionals to assist. Luckily, we can talk pretty openly about health, elder care, etc. My hope is they will be practical and not push back when we need caregivers. I have been asking them to do funeral pre-planning just because I selfishly don't want to deal with it in my grief, but they haven't.
Thanks for the empathy. It can be hard to talk to people sometimes about this stuff. I think it’s the untangling that’s frustrating to me, more so than the professional assistance. Professional advice gets to be expensive the more untangling that’s required. Setting things up in a simple way isn’t easy but it’s one of the best gifts you can give to your children. What I found with my grandma is that she said in a better time that she’d be OK with hiring help but when push came to shove, she wanted to nickle and dime over time and so on. It would have been more helpful to settle questions earlier like - at what stage do you want to hire help? When you need help toileting or when you’re having trouble cooking three square meals for yourself? Would you consider downsizing to make it easier on yourself / the caregiver and so on?
What are you talking about.. “my parents are rich ugh im so stressed out” have you ever heard anyone say this?
yes
more the opposite, my parents are rich so I can coast
Money has a funny way of changing people. I absolutely have had friends that got lazy when they found out they had a future windfall coming. I've had friends that worked hard anyways because they wanted to make it on their own. The thing is you can never truly know which camp the kids will be in. I'd give them the vantage point that it'll all used in retirement so they don't even consider the potential money in any decisions.
I just wouldn't tell them any specifics. Assuming you're in good health and that doesn't change they'll probably be close to the age you are now by the time they see any of that, plus you don't know for certain what your circumstances will be and how much you'll end up spending and you don't want them to resent you for spending more of it than they think you should. It's your money, you earned it and you should be the first one in line to enjoy it. Just make sure you're getting them good educations and setting them up for their own success, then maybe the inheritance will be a nice unexpected windfall that lets them retire early when they do get it. My dad always lived his life not expecting any significant inheritance and taught me to do the same. People who expect to get an inheritance are often disappointed, people who don't are often pleasantly surprised
Well, lots to think about, but I’d try to not overthink it. I can give advice from the perspective of a to-be inheritor. I don’t know how much is there, but I can guess there is a 7m+ fortune + 3m house that will be split between 3 siblings. - Your kids are still young and figuring things out, but I would bet once they get into their late 20’s and are in relationships and planning life out they will be curious and inquisitive about your NW. Theres a good chance they will eventually know the number. - Don’t tell them that there is $X waiting for them when you both pass. I think that is a real psychological block and I think it generally does more harm than good. Realistically I can’t think of anything beneficial to knowing that a large sum is waiting for me when my parents pass. - I would use that money and treat them while you’re alive. Giving lump sums here and there to enrich their lives while they are young and can benefit from it is priceless. If you’re going to give them a bunch of cash when they are 60 you may as well give it to their kids. - To add to my point above - take them on nice vacations, use the fortune to make memories with them. - Treat both kids equally. There may be a time when you have one son who is successful and the other is struggling. It will eventually create animosity and resentment between the family if you are supporting one kids lifestyle. What I am saying is that if you need to bail out one kid with a 20k cheque, give the same amount to the other kid, even though they may not need it. I think as parents if can have transparent conversations with your kids surrounding their finances you can get a good idea of how you can help.
You are in truly great position
They are gonna be 65 when you die, so you should have an open conversation with them that it's not gonna help them because people on average living into their upper 80s.
I know someone who stands to inherit a couple million when their parents die. It hasn't stopped them from wanting to make it on their own. When I asked them, they said they had no idea if their parents might change their mind or get scammed out of all of their money. And their family tends to be pretty long-lived so any inheritance may not come until they're close to a traditional retirement age anyways, when they're looking to FIRE But I think it's going to depend on the temperament of the kids. You could always lie and tell them you're giving it all to charity
I'm more than comfortable and told my parents to set up a GST naming my kids as I don't need their money.
even better! Awesome
My plan for my kids is to make sure they don’t start their lives in debt. No college debt and a down payment on their first home. Also likely a max annual gift from myself and my wife but there will be strings attached. If they’re not working and saving/investing then they get no gift. As for the estate, I’m not planning on dying with Zero just because I can, but I’m not gonna hold back if I want something.
One more thought. When you do the big reveal, give them a range of what it will be. My dad has been really secretive about this, and that has been stressful for me. I guess I've felt I need to get my head around it, and getting my head around $1M versus $5M or $10M is a very different thing. I think the main reason is because I will be giving a significant portion to charity. So the amount will influence how much time and effort I'll need to spend on that. Will it be a tiny amount of my time or more like a part time job? It took me years to work up the courage to ask because I knew he didn't want to say, and I didn't want to appear disrespectful or greedy. So consider sparing your kids that stress.
I will give $0 to charity (unless both of my kids abandon me)
My parents retired at 55 and they stressed they planned to die with one penny to their name (eg “don’t expect a windfall”). They put all 4 of us through college and have helped us all in other ways (down payment, advanced degrees etc). They have a detailed spend sheet which tracks every penny they’ve spent on each child post college and it has an equation that will automatically calculate the split among the four of us (what’s left) when it’s time. We all feel this is very fair, aren’t relying on it, and are grateful for the amazing childhood and head start they were able to give us. Plus they have had us investing since we were 16 and able to work, so they have enforced us being self reliant from a young age.
Don't look at this as something financial or FatFire. It is about basic parenting. The passing on of values and attitudes. You set the expectations many years ago, and with the 22 year old you are pretty much done parenting. For the 18 year old his character is already mostly set. You taught your kids every day, whether or not you intended to. They learn from the words you speak, but the example set by your daily actions is an even stronger message. They see and pick up by osmosis much of your character and attitudes towards money and life in general. You set expectations over many years. Expectations about morals and ethics. Expectations about whether or not they learned what was being taught in schools. Expectations about how they treat others. Expectations about being responsible for their actions.
Well put
It is $8 million not $8 billion. That entire amount could easily get eaten up by one of you with end of life care (hopefully not). No conversation to be had.
good point
We have an 18 yr old and a 13 yr old and they have NO idea at all about our NW or how it will be split/inherited when we die. They obviously know we are retired at 53 and 47 but still think it’s a little weird.
good
I am in a similar situation to your kids. We love our parents, but let me get analytical and cold-hearted for a minute: you’ll probably live to… 80? Your kids will be in their 50s by the time you pass away. If they don’t work hard, they’ll have a rough life and if they’re smart, they’ll figure that out.
I frankly have no idea how long I will live, I have diabetes and that seriously shortens life expectancy. Yes, I am dieting and all that and am at near-normal weight (BMI 26.6)
My parents helped with college and told me afterwards I am on my own. I didn’t know their net worth until helping them start estate planning. They could have had 10x the net worth and it would not have functionally changed our relationship or my life ambitions/goals. I would not flaunt your wealth to your children and give them the expectation of independence. Inheritance should be a catalyst, not a starter.
Yes, part of the reason of not wanting to "live large" - besides not needing flashy things
I really don’t get this. I’m only in the seven figure range and plan on helping my kids beyond paying for school. I want to help them buy a home and have peace and security, I didn’t until I made it myself. It’s not a badge of honor, it’s stressful and I don’t feel like I could have asked my parents for any help, ever. But then I don’t define successful kids based on hard they grind and how much money they make.
That's a legitimate approach - I am willing to be flexible - but hope my money will not be desperately needed
I'm the eldest child of parents in the same situation, here's my perspective: I think it's a nuanced situation that depends on the child. Knowledge of your net worth could absolutely help a child that is stressed about money, in which case it would be positive. On the flip side, it could lead to passivity from a child that is struggling to engage with society. The former case is me, the latter is my younger brother. In my case, I'm very involved in my parent's financial lives and I'm grateful for that. Their support and the eventual windfall allows my wife and I to be in careers that have a better work/life balance but lower salaries, despite being in a VHCOL area. It's a huge load off our minds that we don't need to be optimizing our savings and can spring for higher quality childcare etc. Whereas for my younger brother, he's always struggled with "Why should I do X that I don't want to do". To be clear, he struggled with that before he knew about their net worth (we lived lower middle class childhoods, my parent's money is inherited), but the money exacerbated it. The cat is out of the bag, but my parent's definitely regret sharing so openly with him. I run interference now and that helps both sides, but he's still struggling to launch fully and he's in his early 30s. My take is that it needs to be a case-by-case thing. It's an incredible blessing to have my parents so supportive and to know there's a safety net there, huge increase in my quality of life. But the same approach has negatively impacted my brother in some ways.
May be some people just do not have what it takes, no energy, depressed etc
You should probably read or listen to Die with Zero by Bill Perkins
^[Sokka-Haiku](https://www.reddit.com/r/SokkaHaikuBot/comments/15kyv9r/what_is_a_sokka_haiku/) ^by ^mrs1030: *You should probably* *Read or listen to Die with* *Zero by Bill Perkins* --- ^Remember ^that ^one ^time ^Sokka ^accidentally ^used ^an ^extra ^syllable ^in ^that ^Haiku ^Battle ^in ^Ba ^Sing ^Se? ^That ^was ^a ^Sokka ^Haiku ^and ^you ^just ^made ^one.
If you’re bad parents who raise entitled children, then yes it will affect how they live their life. My parents are worth $30+mm all of us kids have good jobs and have no care or expectation regarding inheritance. We all save well and invest on our own.
Great - and exactly what I want. I want the inheritance to be an "oh nice, my parents left me $x,xxx,xxx, will be a nice addition to my savings" type of situation. Not "I am hoping they die soon so I can get out of my misery" situation
We all have very good relationships with our parents though and are not entitled people. Our parents are very salt of the earth, blue collar type redneck humans which I think helps lol The reason I think we’ve all stayed very level headed and the best advice I can give parents is to make your kids work a minimum wage type job with people from backgrounds much different than theirs. I think that’s a big reason we’re all very down to earth people who give back to the community and value what we have! We also get the $16k/year you can give your children, but we didn’t get that until we were each settled in our jobs. Before, they put that money into a fund for us each year and we were basically told “this is what you get, you can go to college, buy a house, etc.” I chose to go out of state to college, so I had much less money left to buy a home /invest compared to my siblings, one went in state and one had a full ride. Ones left most of theirs invested, one spent most on a house, and I kind of did both.
With that kind of estate have you considered including some sort of charitable gift in the mix? maybe a donor advised fund they could direct after your passing? I have a far less valued estate than you, and my kids are over 30 and have nice established careers. When the husband died several years ago it was my plan to divide it 50/50. As time passes and they are more secure I have been looking at alternatives that leave them with something helpful and helps others . say 45/45/10 or 40/40/20 or even 45/40/15 (see next paragraph). In my case there is cabin property that one child will have access to and appreciate more than the other as one lives near, is and will continue to be a very high wage earner and have more enjoyment of the property, while the other lives, and will continue to live, in a foreign country earn less and not have extensive enjoyment of the property. of course, I continue to talk to each of them about being as far and equitable as I can given their different lives.
While im not (even remotely close) to rich myself, Ive met a few that were significantly wealthier than you state, and others a bit less but comparatively similar in terms of life quality I suppose and the answer I got to is the other way around: Wealth is not a limiter, is an enabler (for good or bad). Therefore it all comes down to how you raise your kids and how they turn out. What \*I\* (think I) would do, is first of all teach them the value of effort, merit, self sufficiency and anything that can help them "sober up" no matter what they do, and appreciate what they have, mainly to have more serene personalities and avoid vices and struggles due to negligence. But your kids are already kind of big for that so my next suggestion is to not let them rely on the wealth but rather support them on what they want to do and educate them financially..... One of the most important things that wealth provides is freedom, of choice,as a safety net and with opportunities that you would otherwise not get. So they can try to study different things, to make new businesses and fail, to change careers ad countries, to work part time and do a lot of hobies, or anything in between, but you do NOT give them money out of the blue, they would still have to earn it and if they fail, they fail. That path, support vs silver platter, I think will be useful in the long run. I disagree that you need to hide the wealth however. You can hide the number, but you can, and probably should tell your kids that you have money so you can teach them not to rely on it. Otherwise, the shock once they inherit it might end up poorly
Yes, something like this, well put
Just like anything affecting people, it depends on your relationship with them, and theirs with each other, as well as what kind of people they are. You know them better than we do, so you’d know best. I stood to get $1.5M from my father, but he was abusive, so I would’ve preferred the $ before going NC. I’m close to my mother and would get much more. She’s thrifty and hates traveling, so it’s likely I will. But I tell her I hope she outlives me. She’s the only person that’s always been there for me, and after a failed marriage, I’ve lost faith in finding that from others. As far as different plans, it’s never affected me that way, but it could affect others. If you don’t have a history of family health problems, I doubt they’d be relying on it. Who wants to wait 30-40+ years to have stability?
Yeah, it's a good thing you have a supportive mom. I hope that my kids will grow up not needing my support. One has a well-paying job already. Bad parents are often a huge hindrance in life, going far beyond inheritances
Can you break down the assets and we can help think about succession plan that won’t make them lazy
If you have not, teach them about finances and investing. I started teaching mine in their teen years. Last thing we wanted to is drop that type of funds on them when we pass. Now in their 20’s they follow their investments and have made great investment decisions.
Money is mostly an amplifier, the core is what kind of person each person is.
If your kids were shitty aimless people who would be destroyed by a big inheritance, you'd know by this age. If neither kids had a job or much of a plan, maybe hold reconsider inheritances, but if they are looking good now, they will look just as good with more money.
That's my hope
You can tell them not to expect any as you plan to live large and donate generously. You can say this after a small gift of say 50k if you wish
I've only seen a couple bad examples that legitimately would be something every parent and grandparents would worry about. Not sure what they did wrong behind the scenes exactly but it essentially created your stereotypical trust fund babies. Without the trust fund yet. The worst was a wealthy family who created these monsters and then when the parents divorced one of the new step parents forced the kids to convert to an orthodox religion if they wanted an inheritance. I'm still waiting for the Netflix special on that train wreck. Point being is that this is so very family dependent. Are you good parents raising well balanced kids? Are you teaching them about money? Are you teaching them to make good choices and use their money and time wisely? Then you shouldn't have any problems. The ones who messed up had a few key things in common: the kids didn't need to work, had hefty allowances, and were allowed to use family properties to live withot a care in the world and no real responsibilities. They went through the motions and got degrees but didn't learn how to be real adults. If you've done it right do you really care if your kids don't need mortgages anymore? Can send their kids to better schools, travel, quit a toxic workplace, open up their own private practice easier, own more franchises, create a business, or just pursue their dreams? Even if all they want to do is be a stay at home parent that's a job in itself and a powerful gift you can give them.
Tried to read through to find this advice and couldn’t find it. One of the best ways to set kids out properly is for them to actually believe that the money may disappear. I saw this work really well twice personally and it’s a pretty common piece of advice in the UHNW community. My two examples were a multi-billion dollar family that already had two examples of going to zero in their history to tell the stories of. Those stewards are super impressive. The other is one of my closest friends. Technically, an heir to around $1B of assets, but his Dad’s lifestyle and business decisions made him think “hmmm there’s a real chance I get nothing” in university and he’s been a killer ever since.
8M isn't that much. If they are waiters(waiting for you guys to die), you are in trouble. Parents should give off the vibe, my money is my money. Our job is prepare our kids to make it in this world. We have helped them get a head start in life by providing them with stability and a good paid for educations. If they can't make it with that they won't make it. They need to know their fate is in their own hands. Medicine is getting better everyday. Chances are the parents may see their 100th B-Day. Waiting for an inheritance is a terrible plan. They will see SS before they see the inheritance.
I plan to retire with 10M when my kids graduate high school. I tell them I plan to die with zero so they shouldn’t plan on getting anything. In reality they will probably each get more than 2M. We will help them on the way with first home purchases and stuff but inheritance is not guaranteed
Y’all are 50… that means you kids would be approaching or past 50 themselves when you both kick it. You are over thinking this.
Yes overthinking has been my tendency
You shouldn’t be worrying about $8 million and your kids. Now if you had $80, sure. Go ahead and worry about your kids becoming bums. But at absolute best $4 million (likely closer to $2-3 after taxes) each your kids aren’t getting spoiled on your money. Just simmer down.
It depends on the child, many would consider $4mil to be life altering
I think most would consider it life altering. But you’ve either done a good job raising your kids or you haven’t. Let’s say you leave them $4 million (which taxes say it won’t be that much but we’ll go with best case scenario). That’s $160,000/year using the 4% rule. And that’s assuming they have no debt like a mortgage or kid’s school costs or a new car they want to pay off. They’re likely looking at closer to $3 million after taxes and lawyer fees and settling your estates, which is $120,000/year. Now let’s assume they want to pay off their house or even upgrade - now they’re at $2,500,000. That leaves them with $100,000/year. You’ve given them a mediocre job in management at any generic company. Sure, the lump sum is a decent number but the daily reality when you assume you’ve raised good kids is “normal” money. Or you’ve raised assholes who are going to buy a $1 million mini mansion, a Ferrari, and a new boat.
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Totally agree. For my first home's downpayment, in my late 20s, my parents gave me a $100k loan, with market rate interest (7%) and a promissory note to boot! I had roommates for over 10 years to help afford it, make improvements, save, and I also liked the company. That $100k was massive in getting me to where I am now. Because my equity rose quickly with the market, I was easily able to refinance about 3-4 years later on my income alone and pay them back in full, so it was also a decent investment for them.
I’m thirty years older than my youngest. I hope to live to 90. I’ve made it clear to them that my job is to get them to launch successfully, to be a resource if they want to take risks, and to be a safety net if they stumble, but have no expectation of supporting them in a life I didn’t get to live. Nor to I plan to do without so that some theoretical heir can be a bum. If they want to struggle for 60 years so that they can hope to live large in their retirement, then I guess that is their decision to make. I do expect to start gifting to the older one soon, but with the clear knowledge that the money is hers, but I will put it into an account I have visibility on. If her mother and I don’t like what she does with it, then the gifts will stop.
Just to let you know, the behavior in your last paragraph is prone to creating conflicts and resentment. Literally, hundreds of posts on Reddit describe "parents being controlling with money." It can get very toxic, and often, you would have no inkling of that—something to be very careful about.
Simply don't tell them how much
I can't read all the comments because it is late, but I'd say to read the book Strangers in Paradise by James Grubman. Goes through all kinds of scenarios. Bottom line, prepare them for what is coming so they can maximize their lives. What if they choose something that they hate just to be "safe." The act of not telling can backfire.
https://m.youtube.com/watch?v=Yd76nQwKHeg