When do you tell kids about family money?

[Anonymous]

Anonymous wrote:

Anonymous wrote:You don’t need to worry about it. The grandparents 2M isn’t really that much. And the 5M each is so far off that it doesn’t matter. It could be a lot more or nothing at all.

Telling your kids anything about it is silly and pretentious, as if you’re telling Simba that he’s inheriting the Serengeti.

Just raise them normally and stop telling everyone they’re sore losers because 2 generations of your family together are worth a whopping 14M (maybe).

You're the only one who thinks people are losers because they're not like OP. Do you have a hard time watching the Olympics because you can't do gymnastics like Simone Biles?

The OP literally called people sore losers. I said don’t say that. But I’m the one calling people losers? Good analysis.

[Anonymous]

Anonymous wrote:Yes i know I sound obnoxious and this is why I could never discuss the topic in real life. And can only do this anonymously.

To answer some questions, neither of us grew up rich. Grandparents made their money later in life (after our kids were in elementary school and we had didn’t need extra money). Don’t get me wrong - they did everything right. Gave their kids an appreciation for the value of hard work and a debt free education. They (both sets of grandparents) were wonderful. One set made enough later in life to set up the $2m trusts for their grandchildren. So we were raised very well but without any expectation of generational family wealth. So I can’t look to our experiences when we think about what to do with our kids.

I don’t expect to tell my kids how much they stand to inherit right away because I want them in their 20’s to work hard to establish themselves. I do wonder how people prepare kids to think about using money appropriately as a tool. What do you talk about? How do you teach them responsibility? Instill a strong work ethic? But with the knowledge that they will have to manage substantial funds earlier in life than they earn it.

You keep acting like this is some massive wealth that will mean they’d be tempted to not work if they knew about it now. It’s not that much money. You’re overthinking it. Don’t talk them about it at all. It’s your money, it’s not their business until it’s their money. When you pass they can figure it out.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes i know I sound obnoxious and this is why I could never discuss the topic in real life. And can only do this anonymously.

To answer some questions, neither of us grew up rich. Grandparents made their money later in life (after our kids were in elementary school and we had didn’t need extra money). Don’t get me wrong - they did everything right. Gave their kids an appreciation for the value of hard work and a debt free education. They (both sets of grandparents) were wonderful. One set made enough later in life to set up the $2m trusts for their grandchildren. So we were raised very well but without any expectation of generational family wealth. So I can’t look to our experiences when we think about what to do with our kids.

I don’t expect to tell my kids how much they stand to inherit right away because I want them in their 20’s to work hard to establish themselves. I do wonder how people prepare kids to think about using money appropriately as a tool. What do you talk about? How do you teach them responsibility? Instill a strong work ethic? But with the knowledge that they will have to manage substantial funds earlier in life than they earn it.

You keep acting like this is some massive wealth that will mean they’d be tempted to not work if they knew about it now. It’s not that much money. You’re overthinking it. Don’t talk them about it at all. It’s your money, it’s not their business until it’s their money. When you pass they can figure it out.

This is a lot of money (especially by the time the kids receive it).

[Anonymous]

You tell them nothing about the grandparent trust until the grandparents are gone. Because anything could happen with that money. My mom’s memory care is $15k a month, they take great care of her and she’s probably going to live ten more years. Let that sink in.

To set your kids up for success don’t make money a taboo topic, teach them the importance of saving as soon as they get their first job, show them a compound interest calculator and spend time with them plugging in different numbers. Stop worrying about what may happen (as in they may have an inheritance down the road). Grandparents money isn’t life changing and they could be in their 60’s by the time they inherit from you. If you really want to start setting them up now gift them the IRS max each year with some of that maxing out a Roth IRA for them. Money for them now is way more impactful than when they’re closing in on their own retirements.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What a ridiculous humble brag. Just insanely ridiculous. Do you really feel superior after writing this? Because you don’t sound superior, you sound pathetic.

Until they actually inherit its all promises and may or may not happen. Nothing to talk about.

This. I had a trust but the payout was structured differently than the everyday trust so the money I could have gotten went to my mother who is a politically radical anti-capitalist and she gave away most of it. I will likely inherit something but it won't be the millions I would have if she'd just invested it. The money isn't yours until it's in your pocket.

That said, I still have a good relationship with my mother because again, she gave away Her money. It's not yours until it's yours.

[Anonymous]

Different scale here, but I will inherit about $2.5m from my parents that is earmarked for my 3 kids education/down payments/cars. Kids- 20, 17,17 - are aware of the sum. We my oldest turned down a $$$$ college for one that offered much merit aid. 2nd child appears poised to do the same. They want to save that $$ as a cushion. Of course, might be different if they had $2m rather $700k.

[Anonymous]

I don't see this as a humble brag. Family money isn't really something to brag about, it's not like being rich from starting your own business. It's just random -ira like bragging you won the lottery.

[Anonymous]

Oh oh OP are you like really really rich? Like super duper rich? You must be so awesome. Wow wow! You are the best! Your kids are the best! Wow!

[Anonymous]

Anonymous wrote:We are not wealthy in a way that kids know about it. We do go on nice vacations but middle class home/cars/clothes etc. Public school. Kids are not particularly spendy. I don’t think they ask for more than if we were a middle class family with ok assets. They do make judgements (not worth it at that price). We have told them that we will pay for college. Our eldest is at an Ivy with the concomitant costs. Our youngest will likely choose similar.

When do we start teaching them about how to deal with inheriting relatively large trusts. From their grandparents alone they will get $2M each. They don’t know about this. From us, they will likely inherit at least that much, probably closer $5M each. I wonder how we should be parenting differently to keep them grounded. Right how they are great kids - hard working and planning on taking care of themselves in the future - and I want to see it continue.

Not sure why you feel it necessary to coddle your kids with large amounts of inheritance. Are they incapable of making it on their own? Do they lack the skills, ability, and intellect to self-sustain? This is a parenting failure 101. “Give a man a fish, and you feed him for a day; teach a man to fish and you feed him for a lifetime.” DH and I prefer the latter strategy and our kids have been better off for it.

You should be using your accumulation of wealth to establish scholarships for the greater good of society. This is what we have done. As a result, we have not only raised three fantastic, independent, and successful kids, but we’ve also funded full-ride scholarships for over 300 other rising young stars in the past 20 years. Wouldn’t you and your kids feel better having done that?

[Anonymous]

Anonymous wrote:Oh oh OP are you like really really rich? Like super duper rich? You must be so awesome. Wow wow! You are the best! Your kids are the best! Wow!

Just caught another loser here!

[Anonymous]

Don’t tell them amounts. Tell them what you own, who you owe, and where to find it. If you don’t have 2M dollars hiding in a box in the basement, you don’t know the value or tax treatment of the assets you have at the time they inherit them, so any extraneous information has no meaning.

[Anonymous]

Anonymous wrote:Good question! We raised them talking about getting a good education and saving money and they actually listened. It wasn’t until they were married with good careers that we started educating them about our estate plans. They have a rough estimate about the value of the trusts we have set up but the trusts are also to benefit their children and maybe grandchildren. They won’t benefit from the trusts until we are gone and they seem to want us to live forever so they don’t build it into their retirement plans except they do know it’s there. Over the last two years we have gifted them a lot of money outside the trusts because they are very responsible and can handle it. We are blessed with very responsible children which has made this process pretty easy.

Honest question---why don't you want them to benefit at all until you are gone? I get making sure you will be well cared for in old age. But wouldn't your kids and grandkids benefit more from having it sooner? Our kids are not married, but they know we will provide for grandkids education (we believe in public schools, so would also provide help with downpayment so they can live in best neighborhood with good school, unless a specific special need requires private) and college will be fully funded for any grandkids. For us, that will make such a huge difference in their life overall, versus waiting until they are 50-60+.

[Anonymous]

Anonymous wrote:

Anonymous wrote:People on this forum are such sore losers. This is a genuine question to me. I'm also interested in knowing how people approach this.

We have money. What is there to approach? This area is full of rich people, some who are showy about it and some who aren’t. The idea that if your kids know they’re rich that they are not gonna work hard is just stupid. Lots of rich kids who know they are rich still work hard. It’s called parenting. God this is a stupid thread.

I mean, in OP’s own case, for example, she grew up with money. Right? Her parents are rich. Why can’t she just do what her own parents did?

Also, as others have noted, it is really not a given at all that the kids are going to get as much money as OP thinks. Anything can happen. The fat lady has not sung yet. In my own estate planning, we have some people saying we will die with a couple million and we have other people saying we will die with 30 million. So what the hell?

+1000

Our kids always knew we were doing well. They didn't know how well until late HS/College when a transaction happened that took us to the next level. Before that, it was obvious we had money but we didn't live anywhere close to the level of money we have.
With that transaction, the kids now know more details about our networth, and what will be coming their way. We raised them well, the are highly motivated to do well in life. We are starting to gift them money now, as it makes the most difference now.
However, they are frugal/fiscally sound. They use it for savings and only spend a small portion. The 25 yo has over $250K invested between retirement and regular investing. They'd rather invest than spend on something silly.
They also greatly appreciate they don't have student loans, and that we paid for a new car for them when they graduated. They are saving for a downpayment and plan to do it "on their own". However, we plan to gift them money for that when it's appropriate because it will be most helpful now

However, our kids know that if they don't have a job and ambitions, we are not supporting them. Thankfully they are still highly motivated, despite knowing money will be coming. I think that is the case with most kids. If you raise them well, helping them will not dwindle their ambitions.

[Anonymous]

My dad always told us this:

- the money is a safety net, not for keeping up with the Jones'
- never touch the capital, it takes 1.43 dollars to replace it for each dollar spent
- the goal is to keep it going for later generations
- general ok uses for it are education, health, and buying a home
- safe/conservative low-fee investments only (SPY, etc.)

[Anonymous]

Anonymous wrote:Maybe find some really good charitable causes where you can make a big difference instead of giving your kids so much. They would be well enough off with $2m each

You don’t want to disincentivize them to work. I work with/for very rich people and I see some of these grown kids and it doesn’t end well

And I've lived it and seen many grown kids who grew up with money. All of them are highly motivated to excel in life and at their careers. It's all in how you raise them (well 95% is).