Are your adult children grateful for their trust funds?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

I’ve read so many times on DCUM that people think that giving funds to descendants when they’re younger (20s and 30s) would have helped so much more in their lives than getting it all those years later. But I guess you run the risk of having entitled kids.

Well the key is you don't distribute it to the kids if they are entitled. Don't want to go to college or trade school and get a job or have a career path? Then you don't get the money.

Don't try to "live within your means" from your own job? Then you don't get more money.

If you raised your kids right, it is entirely possible to start giving them money at age 24/25 and still have them be motivated good people.

[Anonymous]

Anonymous wrote:

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.

Trusts should be a bit like tax incentives. Incentivize the behavior you want. If they don't like it they can just leave the money there for the next generation.

BINGO!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

I’ve read so many times on DCUM that people think that giving funds to descendants when they’re younger (20s and 30s) would have helped so much more in their lives than getting it all those years later. But I guess you run the risk of having entitled kids.

My family paid for my college education, would have funded grad school had I gone, paid for my wedding and gave me and my siblings access to a lump sum amount of money that most of used for down payments on our first homes. They helped with rent after college until I was paid well enough not to need the help. They helped a lot in my twenties in all those ways. A huge headstart, but not an ongoing trust fund where I’d never need to work. This setup also depends on the parents though - parents who are willing to help but who are not controlling overall.

[Anonymous]

Anonymous wrote:Not only are my kids ungrateful about their trusts, but they also trash the yacht and never park the Bugatti in the correct parking garage.

Complete ingrates!

On a serious note...I do think the example set by the parents is important. Have cousins who had fairly large trusts established for them that they could access at 21 (around $10MM each in the 1990s).

The grandfather made all the money and set up a trust for the dad who basically never worked.

Well, one of the cousins blew all the money and the other blew most of it. Neither worked a career, just a series of lifestyle jobs.

They both managed to marry OK, but live pretty MC lifestyles.

Monkey see monkey do

Whereas if they had a dad who worked in a career they loved while enjoying the perks of the trust, they might be different kids and have successfully utilized the trust fund

[Anonymous]

I am now very thankful that my parents taught me never to touch principal. In my 20s I had access to $ but lived, I'll admit, a boring, 9-5 life and didn't spend a lot. When Covid hit and the music stopped, I was extremely grateful that I let the $ grow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

I think that's awesome. I wasn't trying to imply one way was better than another.

Nobody in my family has been in a position to pass down wealth like this before so we don't have any history of best practices to fall back on. Every option has its pros and cons so for my part I focus on being thankful and working to navigate a path towards living where I want to without larger trust distributions. That said, I have three young children who I expect will inherit even more than I will and threading that needle is already something I'm starting to worry about.

Unrelated to your point but another source of potential frustration I think about is how siblings can affect you. I have two siblings and two of us are, I think, very strong with money. The third has never been good with it from a young age and one of my parents' values has been to treat everyone perfectly equally. For example when they bought each of us a car they gave us a price range and then wrote checks to the two buying less expensive cars to equal out the gift to the dollar. And so I think the kid who's not great with money acts as a bit of a limiting factor when it comes to distributions. Anyway, we'll see how this early trial run goes and maybe that'll change. The common thread is that when you get tangled up in family money like this you find that your life is more impacted by the decisions and actions of others (in this case, your parents and a sibling). That reliance/dependence on others as an adult can be chafing but it means less reliance on an employer so, once again, it's tradeoffs all the way down haha

Definately tradeoffs. We (Spouse and I) are the source of the money for our kids and future generations. We grew up LMC/MC. We had to work our asses off for everything, tons of student loans. We started off very frugal, paid loans off by saving an entire salary plus some for 2 years.

So our goal is to raise motivated kids for whom the money is just "extras". Our kids had no clue we had money until they were teens and even then, no clue how well off. We live a moderate lifestyle, didn't give them everything all their friends had as teens. They knew we were UMC but had no real clue how well off.

The one who is launched is very frugal. Maxes out the 401k/Ira because we match with gifts. But they would do as much as possible on their own. They like to save. At 25 they have over $60K saved in "regular savings" and over 100K in retirement. So we don't believe we are impeding them "being a full adult" by gifting them $$.

The other is in college and is similar.

Both are appreciative of what they get as well.

For now we will try to keep it "even" but in reality that is easier to do when your kids are getting 5-10M+ each and both are good kids/adults. And both manage money well. But I get you. I have. sibling who is a financial mess, despite us growing up in same family.

[Anonymous]

What do you mean by "grateful" exactly? Most of the trustfunders I know realize they are lucky, give to charity, are compassionate, but, ultimately live in a bubble of privilege. Are these your kids? I think it is unavoidable personally. You just have to ignore their sometimes clueless comments.

[Anonymous]

Anonymous wrote: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.

Sounds like a good way to hemorrhage money and ensure there is nothing left for your grandkids. Truly not my style. My grandkids are a better charity to me than random strangers.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

Sounds like a good way to hemorrhage money and ensure there is nothing left for your grandkids. Truly not my style. My grandkids are a better charity to me than random strangers.

If you can't do both than this thread probably isn't about you.

[Anonymous]

I'm a grateful adult child, but fwiw I don't think money is a good way to control your adult children. We've set up our own estate plan to include as few strings as possible, really just some safeguards against young adults in full crisis.

If my kids want to take the family fortune and spend it all on hookers and blow, that's really up to them. If my kids want to spend the family fortune on hookers and blow and they're just stymied by some trustee I've put in place? That doesn't sound better to me. In some ways it sounds worse.

I'm especially adamant about not trying to control the things that happen after my death. I'll let you know how it works out, lol.

It's weird to me how I have relatives who will go ON AND ON about how government assistance makes people soft and reliant and discourages bootstrapping and this and that, and then they set up trusts that are the much cushier version of the same thing.

If my adult children squander the family fortune, it will go back out into the world and maybe end up with someone more worthy. A hooker with a heart of gold. A skillful entreprenuerial phone scammer. Etc.

[Anonymous]

Anonymous wrote:I'm a grateful adult child, but fwiw I don't think money is a good way to control your adult children. We've set up our own estate plan to include as few strings as possible, really just some safeguards against young adults in full crisis.

If my kids want to take the family fortune and spend it all on hookers and blow, that's really up to them. If my kids want to spend the family fortune on hookers and blow and they're just stymied by some trustee I've put in place? That doesn't sound better to me. In some ways it sounds worse.

I'm especially adamant about not trying to control the things that happen after my death. I'll let you know how it works out, lol.

It's weird to me how I have relatives who will go ON AND ON about how government assistance makes people soft and reliant and discourages bootstrapping and this and that, and then they set up trusts that are the much cushier version of the same thing.

If my adult children squander the family fortune, it will go back out into the world and maybe end up with someone more worthy. A hooker with a heart of gold. A skillful entreprenuerial phone scammer. Etc.

Not sure how that sounds worse - it's certainly better for your grandkids if the "family fortune" is not evaporated by one person's addiction.

[Anonymous]

My parents and their friends have been waiving a trust fund that my grandparents set up for me and my parent on that side of the family since my grandparents died.

That money has not made a significant impact on my quality of life at all. If anything, the nagging and hassling I have had to endure over it has outweighed any money I have ever received from it.

That doesn’t mean I’m ungrateful at all. My grandparents would be very upset if they knew how their family would use this structure to manipulate me. That was not their intent.

I find the healthiest approach to be living my life as if that money didn’t exist, from a mental and practical standpoint. Any money I receive from it is just an embellishment.

[Anonymous]

Anonymous wrote:What do you mean by "grateful" exactly? Most of the trustfunders I know realize they are lucky, give to charity, are compassionate, but, ultimately live in a bubble of privilege. Are these your kids? I think it is unavoidable personally. You just have to ignore their sometimes clueless comments.

NP - I think you describe me quite well. I chose a public sector career and day-to-day live within my means based on my salary, but I truly can't begin to imagine the stress I'd carry day to day if I had student loans to pay, or if the safety net I know is there were to just disappear one day. I recognize how privileged I am not not personally know that stress, though I am close to people who know it well (including the family that established the trust, and my husband). Other than not knowing the money exists at all, I don't know how I could have avoided that bubble. But isn't that kind of one point of a trust? Ideally it doesn't strip the individual of any sense of purpose in life, but it alleviates or eliminates a major source of stress that is otherwise quite common?

[Anonymous]

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

Exactly. Unfettered access to 10's of millions.

Or my favorite category, Humble Brag of the Day

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

Sounds like a good way to hemorrhage money and ensure there is nothing left for your grandkids. Truly not my style. My grandkids are a better charity to me than random strangers.

If you can't do both than this thread probably isn't about you.

Let's make it clear. There is no amount of money that will ever be spare to me. All of it will go to MY future generations. My future generations are my charity. Even if I were a Billionaire - now I'm "only" in the XX millions. BTW I pay tons of taxes and view that as charity. The government uses that money for schools, roads, public infrastructure, subsidized housing, food for the poor, natural disasters, etc. I see no need for me to contribute more. I already contribute more to those causes through taxes than 90% of Americans make in a year.