How Much of an Inheritance is Too Much for Kids

[Anonymous]

I am figuring out some aspects of my estate and retirement planning, and I'm curious how much people think is appropriate to leave as an inheritance for your kids. Is there an amount of inheritance that would level that would be too much for each kid? I plan to max out Roth IRA contributions until retirement and not touch this money to leave it as an inheritance for my kids. This means our Roth IRAs will likely have a total inflation-adjusted value of around 3-6 million when I turn 80.

Here's a summary of my projected retirement situation for context.
4,000 monthly pretax pension
2,000 monthly social security (assuming SSI benefits are cut substantially due to current funding issues. The actual amount will likely be around 4k between me and my spouse assuming a 20% cut in benefits)
$5,000 monthly pretax from 401ks (assuming a 4% withdrawal rate and worst historical returns from Cfiresims calculator)
Brokerage account
$2500 a month from our brokerage account (minimum estimate, will likely be more but inflation-adjusted value of brokerage account will certainly exceed 1M in retirement)
A few rental properties (combined value of around 1.4M. I am unsure about the amount of after-tax income so I'm ignoring them for retirement purposes)


Primary residence is worth around 850k, and the mortgage will be paid off before retirement.

In conclusion, if things go very badly, my kids will split an inheritance of at least 8M. However, if market returns are closer to historical norms (25th-50th percentile returns), they will inherit 15M+. I am only going to have 2 or 3 kids, so I am somewhat hesitant about whether this is an appropriate amount to leave my kids or if it is too much.

[Anonymous]

3-4 mil to each (assuming 2) and some generation-skipping trusts for the rest of the funds? Some charitable giving, too?

[Anonymous]

$10 million per kid is plenty.

In reality, it depends on the kid - for example, if they are an addict it's not a good idea to give them cash - better to structure a trust to pay for needs, treatment.

You don't even have kids yet, so I assume you are in your 20's-30s. Talk to an estate planner and then update the plan every 10 years or so. It's not worth worrying about these details now, lots of in-between will happen that may shift your plans as you hopefully live another 50 or so years.

[Anonymous]

Anonymous wrote:3-4 mil to each (assuming 2) and some generation-skipping trusts for the rest of the funds? Some charitable giving, too?

No charitable giving unless I end up being worth like 50M+. Need to ensure the next 2-3 generations of my family will not be in need of charity before I feel comfortable donating.

[Anonymous]

I don't think there is a "too much" until you get into the billions, OP.

I plan to leave a similar amount to my kids, and I don't consider it life-changing for them in the slightest.

Most people, including intelligent people on DCUM, are unable to assess inflation correctly.
Your 8-20M won't provide what you think it can provide when you finally kick the bucket.

[Anonymous]

Enough to do anything they want with their lives. Not so much that they can do nothing.

[Anonymous]

Anonymous wrote:
Most people, including intelligent people on DCUM, are unable to assess inflation correctly.
Your 8-20M won't provide what you think it can provide when you finally kick the bucket.

Presumably the 8-20mln is in investments that will at least keep up with inflation, so when the kids get it, it will be worth a higher amount.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
Most people, including intelligent people on DCUM, are unable to assess inflation correctly.
Your 8-20M won't provide what you think it can provide when you finally kick the bucket.

Presumably the 8-20mln is in investments that will at least keep up with inflation, so when the kids get it, it will be worth a higher amount.

Then you should re-read the OP.

[Anonymous]

Anonymous wrote:I am figuring out some aspects of my estate and retirement planning, and I'm curious how much people think is appropriate to leave as an inheritance for your kids. Is there an amount of inheritance that would level that would be too much for each kid? I plan to max out Roth IRA contributions until retirement and not touch this money to leave it as an inheritance for my kids. This means our Roth IRAs will likely have a total inflation-adjusted value of around 3-6 million when I turn 80.

Here's a summary of my projected retirement situation for context.
4,000 monthly pretax pension
2,000 monthly social security (assuming SSI benefits are cut substantially due to current funding issues. The actual amount will likely be around 4k between me and my spouse assuming a 20% cut in benefits)
$5,000 monthly pretax from 401ks (assuming a 4% withdrawal rate and worst historical returns from Cfiresims calculator)
Brokerage account
$2500 a month from our brokerage account (minimum estimate, will likely be more but inflation-adjusted value of brokerage account will certainly exceed 1M in retirement)
A few rental properties (combined value of around 1.4M. I am unsure about the amount of after-tax income so I'm ignoring them for retirement purposes)


Primary residence is worth around 850k, and the mortgage will be paid off before retirement.

In conclusion, if things go very badly, my kids will split an inheritance of at least 8M. However, if market returns are closer to historical norms (25th-50th percentile returns), they will inherit 15M+. I am only going to have 2 or 3 kids, so I am somewhat hesitant about whether this is an appropriate amount to leave my kids or if it is too much.

Then why are you even asking the question, OP?

If you're young enough that you don't have kids, you have no idea what lies in store for your life. Maybe you won't have that money to leave to your kids. Maybe you won't have kids.

You're ridiculous.

[Anonymous]

OP one option is to not allow distribution of the $ until the receipients reach a specified age. I guess someone would have to be designated to manage the $ until it is distributed.

[Anonymous]

There isn't a too much, rather a too soon.

[Anonymous]

The timing is just as important as the money. Don't give them too early to kill the need to work, but don't make work full time and go to school.
There's no too much. Leave some for next generations in case earlier one messes it all up.

[Anonymous]

Why are you worrying about this if you don't have kids, OP?

How old are you?

Have you even met the future mother of your kids?

Very weird.

[Anonymous]

^ or future father, of course.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
Most people, including intelligent people on DCUM, are unable to assess inflation correctly.
Your 8-20M won't provide what you think it can provide when you finally kick the bucket.

Presumably the 8-20mln is in investments that will at least keep up with inflation, so when the kids get it, it will be worth a higher amount.

I plugged my retirement savings and contributions into cfiresims and the account balance numbers for estimating retirement income are using the worst case inflation adjusted historical market outcome over the past 150 years.