Are your adult children grateful for their trust funds?

[Anonymous]

Have others found that their (adult) children appear unappreciative of the trusts you have established for them? While they will receive more one day when my spouse and I pass away (hopefully not for many years!), they each have very substantial trusts that more than cover each of their needs every year, and then some. We made a conscious decision that giving unfettered access to tens of millions of dollars for each of our children would not be the right decision for our family; yet it feels as though the lack of personal control over this money has made them take it for granted as if it were not actually "given" to them.

Although it seems counterintuitive, does the lack of personal control over funds in a trust ultimately make your adult children less appreciative with money, and therefore less responsible? Or is this a phase they will grow out of? (They are all still in their twenties.)

[Anonymous]

Wealth, like respect, is earned not given.

Im setting up a fund that my kids will get some money as they finish high school, as they finish college, as they get married, as they buy a house.

[Anonymous]

Anonymous wrote:Have others found that their (adult) children appear unappreciative of the trusts you have established for them? While they will receive more one day when my spouse and I pass away (hopefully not for many years!), they each have very substantial trusts that more than cover each of their needs every year, and then some. We made a conscious decision that giving unfettered access to tens of millions of dollars for each of our children would not be the right decision for our family; yet it feels as though the lack of personal control over this money has made them take it for granted as if it were not actually "given" to them.

Although it seems counterintuitive, does the lack of personal control over funds in a trust ultimately make your adult children less appreciative with money, and therefore less responsible? Or is this a phase they will grow out of? (They are all still in their twenties.)

You’re putting strings on the money so they probably don’t appreciate it as much as if you’d trust them to use it as they see fit. It’s there, great, but anything with strings attached doesn’t actually seem like a gift.

[Anonymous]

I'll take "Problems only the 1% worry about" for $1000, Alex.

[Anonymous]

Our irrevocable trusts are generation skipping so our adult children will be benefit from all of the income and their children the principal. But, there is plenty of flexibility in the trusts to meet their needs but this is after we are gone. They are all very successful in their own right and we want them to be motivated to build their own net worth and not live off ours. We never benefited from trusts or inheritances. However, we are very generous with them annually and we have well funded 529 plans for their children. They are very grateful for what we do and they know that the trusts can be a big safety net for them right now if needed. Fortunately their spouses want to self fund their lifestyles and not rely on their ILs.

[Anonymous]

You raised your kids to be ungrateful. I know plenty of families living off accumulated wealth of prior generations that are perfectly humble and grateful people.

[Anonymous]

Anonymous wrote:You raised your kids to be ungrateful. I know plenty of families living off accumulated wealth of prior generations that are perfectly humble and grateful people.

+1. Seems this way to me as well.

Also giving the kids access to trusts in their twenties was probably a mistake. I grew up well off and am privileged to have come from generational wealth. My parents were very generous with helping me in my twenties, but there was no access to a huge trust fund. My siblings and I learned to be grateful for their help and to cover as much of our living expenses as possible independently.

Also, are you (the parents) hard working or also beneficiaries of generational wealth? While one of my parents comes from a wealthy family, both of my parents worked very hard in their careers until they retired and they’ve always lived modestly but given generously. They set a good example growing up. On the flip side, I know many people I grew up with who came from family money- their parents lived high on the hog despite not having real careers, and now there is not much left for their kids and grandkids.

[Anonymous]

How much are you distributing to them each year?

I'm an adult child (late 30s) with a trust fund and I wrestle with this myself. I think of generational wealth as having three levels of benefit. Level one is freedom from worry about job loss, car repairs, unexpected expenses, etc. You have a large enough safety net you don't worry about the financial problems most everyone else does. Level two is the freedom to decouple where you live and how you spend your time from working for a living wage. Maybe you move to Jackson Hole and live an adventurous life without working. Or you work for a nonprofit whose mission you believe in. Level three is removing money as a limiting factor for how you spend your time. I think this is what many people think of when they think of trust fund kids - like oh the Alps are getting some great snow, let's fly out to Zermatt tomorrow and enjoy it! See also: the billionaire travel circuit.

We're firmly in level one. We don't have to worry about losing our jobs, car repairs, not making mortgage payments, etc. And since money is a primary stressor in people's lives this is huge and I try to be grateful for it every day. However. My parents are the classic midwesterners with protestant work ethics and all. So while the money is there for us to enjoy a level two lifestyle they've made it clear they want us all to be working full time and, so far, in jobs that can support our lifestyles. And on one hand I understand that impulse but on the other...man. I only live in the DC area for work and I hate living here. I believe strongly that you can give back to society in other ways and still live a happy, fulfilling life. And even within the context of living here there are things I would spend more money on but feel like we can't afford it (household cleaners, more landscaping/yard work, etc).

At the end of the day I remind myself that it's their money and they could give it all away to the circus if they want. I focus on how fortunate I am and try to live in that space but yeah, sometimes I do feel something like resentment sneaking in. That my parent's want to pass their money down to their children but at the same time I don't have access to it now to make different choices in my life can be frustrating.

Also, I didn't start having transparent conversations around family finances with my dad until I was in my mid-30s. My two (younger) siblings still don't have a clear picture of where things stand. Our parents paid our way through college and made sure we had a reliable car at graduation but we've only started getting larger outlays of money for things like downpayments in the last couple years and this year will be our first receiving small recurring trust distributions. I'm always curious about how other families handle things though - so are you distributing enough money for them to not work and live wherever they want? Are they aware of how much money is in their trust(s)?

[Anonymous]

Start living it up now. Plan big family trips and create spectacular memories.

and then start donating meaningfully to causes who serve people in need. I guaranty those people will truly appreciate it, and you will do more good that way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Have others found that their (adult) children appear unappreciative of the trusts you have established for them? While they will receive more one day when my spouse and I pass away (hopefully not for many years!), they each have very substantial trusts that more than cover each of their needs every year, and then some. We made a conscious decision that giving unfettered access to tens of millions of dollars for each of our children would not be the right decision for our family; yet it feels as though the lack of personal control over this money has made them take it for granted as if it were not actually "given" to them.

Although it seems counterintuitive, does the lack of personal control over funds in a trust ultimately make your adult children less appreciative with money, and therefore less responsible? Or is this a phase they will grow out of? (They are all still in their twenties.)

You’re putting strings on the money so they probably don’t appreciate it as much as if you’d trust them to use it as they see fit. It’s there, great, but anything with strings attached doesn’t actually seem like a gift.

Maybe I'm just too poor to understand the problem, but "here's a trust that pays out enough to cover all of your needs ever year without any qualifications, and there will be millions more when your parents die" doesn't seem very "strings attached" to me.

[Anonymous]

Anonymous wrote:How much are you distributing to them each year?

I'm an adult child (late 30s) with a trust fund and I wrestle with this myself. I think of generational wealth as having three levels of benefit. Level one is freedom from worry about job loss, car repairs, unexpected expenses, etc. You have a large enough safety net you don't worry about the financial problems most everyone else does. Level two is the freedom to decouple where you live and how you spend your time from working for a living wage. Maybe you move to Jackson Hole and live an adventurous life without working. Or you work for a nonprofit whose mission you believe in. Level three is removing money as a limiting factor for how you spend your time. I think this is what many people think of when they think of trust fund kids - like oh the Alps are getting some great snow, let's fly out to Zermatt tomorrow and enjoy it! See also: the billionaire travel circuit.

We're firmly in level one. We don't have to worry about losing our jobs, car repairs, not making mortgage payments, etc. And since money is a primary stressor in people's lives this is huge and I try to be grateful for it every day. However. My parents are the classic midwesterners with protestant work ethics and all. So while the money is there for us to enjoy a level two lifestyle they've made it clear they want us all to be working full time and, so far, in jobs that can support our lifestyles. And on one hand I understand that impulse but on the other...man. I only live in the DC area for work and I hate living here. I believe strongly that you can give back to society in other ways and still live a happy, fulfilling life. And even within the context of living here there are things I would spend more money on but feel like we can't afford it (household cleaners, more landscaping/yard work, etc).

At the end of the day I remind myself that it's their money and they could give it all away to the circus if they want. I focus on how fortunate I am and try to live in that space but yeah, sometimes I do feel something like resentment sneaking in. That my parent's want to pass their money down to their children but at the same time I don't have access to it now to make different choices in my life can be frustrating.

Also, I didn't start having transparent conversations around family finances with my dad until I was in my mid-30s. My two (younger) siblings still don't have a clear picture of where things stand. Our parents paid our way through college and made sure we had a reliable car at graduation but we've only started getting larger outlays of money for things like downpayments in the last couple years and this year will be our first receiving small recurring trust distributions. I'm always curious about how other families handle things though - so are you distributing enough money for them to not work and live wherever they want? Are they aware of how much money is in their trust(s)?

OTOH, some of us want our kids to see that money now. We do (and will continue) to gift our kids $$ to "make their life easier". In a heartbeat I'd give you (if you were my kid) the money to get out of DC and get a job somewhere you want to live. Life is too short to work and live somewhere you don't want to be. However, like your parents we still require the kids to have full time jobs and career goals. They just know there is the Level 1 fall backs so they don't have to stress about finances. So far both kids are well adjusted adults, fiscally frugal and saving a ton. It helps that most of their friends are recent college grads with loans and car payments so they don't want to take fancy trips/etc.

[Anonymous]

No trust funds here, but both kids have expressed gratitude for having their college paid with no loans. Most of their friends were not as lucky.

[Anonymous]

I'm adult child with a trust fund and I am super super grateful.

I had a small one from my grandparents' that I used to put myself through college and grad school.

I didn't know more was coming, but my parents set up and gave me access to one around age forty. I am my own trustee and have the HEMS standard.

I think back on how having it earlier would have changed me. I think I would have been less stressed out and would have pursued a creative career rather than a business career. I would have down stuff like go to events like destination thirtieth birthday parties, bachelorette parties, weddings, etc.

I spend about 50k a year of it and am trying to save most of it for retirement and then split among charities and descendants when I die.

It's nice and I am extremely grateful. My grandfather and father worked very hard and I am benefitting. I went to my grandfather's grave and thanked him.

[Anonymous]

Just curious, how much are in these trust funds? $200,000, $1,000,000 $15 mil?

[Anonymous]

Anonymous wrote:I'll take "Problems only the 1% worry about" for $1000, Alex.

0.1%

Stop letting the ultra wealthy villians use wage earning professionals and entrepreneura as human shields.