How Much of an Inheritance is Too Much for Kids

[Anonymous]

Anonymous wrote:

Anonymous wrote:Nice brag!

I'm not bragging. I am looking for advice from people because I think they might have a different perspective or potentially anecdotes on how this worked out for someone in their family/social circle.

Please….you bragging and most likely lying.

[Anonymous]

Structured philanthropy is s good model for kids to show some values and yes, noblesse oblige. Family foundations don't have to be huge to involve everyone in a meaningful way.

[Anonymous]

Anonymous wrote:Structured philanthropy is s good model for kids to show some values and yes, noblesse oblige. Family foundations don't have to be huge to involve everyone in a meaningful way.

Alright, maybe I can think about that if I end up having significantly more assets than expected.

[Anonymous]

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

Yes. The too much that I see is when adults are given so much that they don’t have to work. Then they tend to be unhappy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

I definitely will have this much money and I will 100% have kids, so this is not a question. First kid will be born within 1-2 years year or so. I did not include my inheritance in this calc either. I'm not planning on it and I would prefer that my family members spend it on themselves instead, but 99% chance it happens unless there is WW3 or something. If I get very unlucky and I don't have any kids my sister has some already, so the question is still relevant.

Really? Are you with their designated parent already, and you've decided to try in the near future? How old is the mother? Are you sure you won't run into fertility issues? Women older than 35 often have issues. IVF is not a 100% sure bet, far from it.

The certainty with which you write about your future family is just so naive, OP.
You have a lot to learn on that front.

Also, your question is stupid. If your kids aren't even born yet, and they are set to inherit the paltry sums you speak of, it really won't change their lives enormously. By that time, the millions you will leave won't be worth all that much.

Time to grow up instead of fantasizing.

[Anonymous]

There is NO TOO MUCH!! Set it up in trusts, structure it wisely, take care of your family for generations!! This is the dream!

[Anonymous]

You don't even have kids yet? So this is just bragging about a hypothetical? You have no idea what life might hold

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

I definitely will have this much money and I will 100% have kids, so this is not a question. First kid will be born within 1-2 years year or so. I did not include my inheritance in this calc either. I'm not planning on it and I would prefer that my family members spend it on themselves instead, but 99% chance it happens unless there is WW3 or something. If I get very unlucky and I don't have any kids my sister has some already, so the question is still relevant.

Really? Are you with their designated parent already, and you've decided to try in the near future? How old is the mother? Are you sure you won't run into fertility issues? Women older than 35 often have issues. IVF is not a 100% sure bet, far from it.

The certainty with which you write about your future family is just so naive, OP.
You have a lot to learn on that front.

Also, your question is stupid. If your kids aren't even born yet, and they are set to inherit the paltry sums you speak of, it really won't change their lives enormously. By that time, the millions you will leave won't be worth all that much.

Time to grow up instead of fantasizing.

I will never said it was a lot and these estimates are inflation adjusted. Just curious what is too much.

[Anonymous]

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

This is the truest statement. So the answer, Op, is $2-3m. They would still need to work - but could live incredibly well even on a teacher or hairdresser's salary if that's the field they chose. More than $5 million and believe me, they will do nothing. My most worthless manchild cousins are the ones who received $10M -- unemployed, not involved in the community, and still cry to mommy for more.

[Anonymous]

Anonymous wrote:You don't even have kids yet? So this is just bragging about a hypothetical? You have no idea what life might hold

My sister has kids already so they will get the money if it’s impossible for me to have kids.

[Anonymous]

Anonymous wrote:

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

This is the truest statement. So the answer, Op, is $2-3m. They would still need to work - but could live incredibly well even on a teacher or hairdresser's salary if that's the field they chose. More than $5 million and believe me, they will do nothing. My most worthless manchild cousins are the ones who received $10M -- unemployed, not involved in the community, and still cry to mommy for more.

Thank your giving thoughtful feedback. But how do I discourage them from taking a low paying job and making up for it with the inheritance. If they are not capable of working in a higher paying jobs it’s fine, but I don’t want a lazy smart kid to rely on the money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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

This is the truest statement. So the answer, Op, is $2-3m. They would still need to work - but could live incredibly well even on a teacher or hairdresser's salary if that's the field they chose. More than $5 million and believe me, they will do nothing. My most worthless manchild cousins are the ones who received $10M -- unemployed, not involved in the community, and still cry to mommy for more.

Thank your giving thoughtful feedback. But how do I discourage them from taking a low paying job and making up for it with the inheritance. If they are not capable of working in a higher paying jobs it’s fine, but I don’t want a lazy smart kid to rely on the money.

You seriously have nothing better to do with your time? How sad that a man with no kids in his thirties is spending his time like this. Me? I’m in my 50s and am a parent, so I have an excuse. Once you actually make real money, you will go to a lawyer who specializes in estate planning like all the rich grown ups do. She will tell you what her other rich clients do and the pros and cons of structuring trusts. You will learn that you set up trusts with conditions, etc. For now, why you do something more productive.

[Anonymous]

Anonymous wrote:There isn't a too much, rather a too soon.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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

This is the truest statement. So the answer, Op, is $2-3m. They would still need to work - but could live incredibly well even on a teacher or hairdresser's salary if that's the field they chose. More than $5 million and believe me, they will do nothing. My most worthless manchild cousins are the ones who received $10M -- unemployed, not involved in the community, and still cry to mommy for more.

Thank your giving thoughtful feedback. But how do I discourage them from taking a low paying job and making up for it with the inheritance. If they are not capable of working in a higher paying jobs it’s fine, but I don’t want a lazy smart kid to rely on the money.

There are plenty of worthwhile "low paying" jobs. And ones that really matter to society at that. And don't try to control them with money. Either give it to them or don't.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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

This is the truest statement. So the answer, Op, is $2-3m. They would still need to work - but could live incredibly well even on a teacher or hairdresser's salary if that's the field they chose. More than $5 million and believe me, they will do nothing. My most worthless manchild cousins are the ones who received $10M -- unemployed, not involved in the community, and still cry to mommy for more.

Thank your giving thoughtful feedback. But how do I discourage them from taking a low paying job and making up for it with the inheritance. If they are not capable of working in a higher paying jobs it’s fine, but I don’t want a lazy smart kid to rely on the money.

So then you don't give them an inheritance. Smart lazy kids in low-paying or unmeaningful jobs and relying on family money everywhere.