If you are fortunate enough to have a large estate, and you have children, at some point you will have to decide how you plan to distribute your wealth in your estate plan. Specifically, you will need to decide how much of your wealth to leave your children. Your first instinct may be to leave everything to your children. After all, it is likely for them that you worked hard and invested wisely in order to amass the fortune in the first place right? You may, however, wish to reconsider that train of thought and instead consider what Bill Gates said about leaving money to kids “I definitely think leaving kids massive amounts of money is not a favor to them.”
It’s difficult to find someone who doesn’t know who Bill Gates is. Microsoft’s Chairman has reportedly amassed a fortune valued in excess of $65 billion, yet he says he will only leave his children $10 million each. While most of us would be thrilled to inherit $10 million, if your father was worth $65 billion you might feel like you got the short end of the stick. Gates, however, appears to understand why an outright gift of a substantial sum of money is not always in a beneficiary’s best interest, particularly if the beneficiary is a child or young adult.
Even a child who is accustomed to the lifestyle that wealth brings is still a child at heart. While a child cannot inherit directly, when he or she turns 18 any assets held in trust can be distributed to the beneficiary directly. Is it wise though to give a young adults large sums of money? In most cases the answer is “no”. Although the law says a child turns into an adult when he or she turns 18 we all know that a significant and crucial amount of emotional and mental growth continues beyond age 18. It is not surprising then that huge fortunes have been squandered away because they were gifted to a young adult who was simply unprepared to handle such a large fortune at such a young age.
Moreover, giving anyone an obscene amount of money often leads to nothing but problems and heartache, which is precisely what Gates meant when he said “it is not a favor to them”.
If you have a fortune to pass down, think long and hard about what you plan to do with your assets. Of course you want to provide for your children; however, remember that providing for their needs is not the same as giving them everything they want. Consult with your Missouri estate planning attorney about the best way to handle your children in your estate plan. Contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.
- Staying Current is Especially Important in the Pandemic - November 17, 2020
- Staying Current is Especially Important in the Pandemic - October 1, 2020
- How Will You Age in Place and Be Able to Die at Home? - August 16, 2020