When do you tell kids about family money?

[Anonymous]

Anonymous wrote:

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).

It is but also personality. I know families with and without money and kids end up who they are regardless

[Anonymous]

Anonymous wrote: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.

We gift our 20 something kids the max yearly now. Best way to transfer wealth and at an age it will make major impact. Our kids have great careers and work hard. They live within their means (which means they live in an apartment they can afford on their own, and still save for a downpayment and still save decently for retirement). However our gifts goes 99% for savings---retirement is maxed and that allows them to save even more on their own.
As long as they continue to be responsible and fiscally responsible, we will continue to gift.
If they choose to quit their job, sit at home and play video games all day and try to live off our gifts, then perhaps the gifts will stop.

But for now, by the time they are 30, they will have $600-700K+ in retirement and savings. they will have enough for a downpayment on a nice home. They will not have to worry about saving a ton for retirement when they have kids (they will still save but will be able to direct money to daycare and kid expenses as needed). They also know we will fund grandkids education, so they dont' need to save for college. We will superfund a 529 for each grandkid once they are born (I think it's $100K you can do). Let that grow 18+ years and they will have enough for almost any school (and we will add more if needed).

So if I only had $5M, I wouldn't be doing all of this---just gift them for 2-4 years and be done. But we are worth much more than that, and have more most likely coming in a few years.
So we prefer to see the benefits while we are alive and also while it has the greatest benefit (which is in their 20/30s, not when they are 60+)

[Anonymous]

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.

So, people are losers if they are not born into wealth? Nice

[Anonymous]

Anonymous wrote:OP it’s not enough to worry about. People can live a long time and elder care costs can be staggering. Just deal with it when it comes up.

Life is fragile and unpredictable. Anyone can mess up their life and anyone can die.

[Anonymous]

Anonymous wrote:

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+.

PP - they are benefiting. At birth we put $100k into each grandchild’s 529. At Christmas each couple receives $50k. Outside of the trusts each of our adult children has received $1.5 million in the past two years. I didn’t include that detail because I figured someone would say we are indulging them!

[Anonymous]

Anonymous wrote:

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?

well goody for you

We are choosing to dontate/use for external good a portion of our funds, and then also set our kids up (and grandkids) for the future. Yes, our kids will be self sufficient and have careers they love. But we worked hard for our money, so yes, we plan to ensure our own family is well taken care of.

So you can do both. I'd prefer to fund only 275 scholarships and ensure my kids and grandkids are well taken care of as well.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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+.

PP - they are benefiting. At birth we put $100k into each grandchild’s 529. At Christmas each couple receives $50k. Outside of the trusts each of our adult children has received $1.5 million in the past two years. I didn’t include that detail because I figured someone would say we are indulging them!

Good for you! ( I mean that---I'm not the obnoxious PP). We plan to do the same for college (once grandkids arrive). We gift our kids yearly as well. In reality, once you do all of that, the inheritance doesn't matter as much. Not having to save for college and getting $50K/year will set up almost any responsible person for an amazing UMC+ lifestyle.
I used to think---just give it all away. But as our kids hit college and beyond and I see what good people they are and how motivated they are, I have less and less issue leaving majority for them.

[Anonymous]

My kids and DH know who to call first for help if I pass and where the money is at this age that’s all they need to know. I also have them saving and investing on their own

[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.

So, people are losers if they are not born into wealth? Nice

OP here. Just to be clear. The person you quoted is not me. Most of my friends are not born into wealth and I most certainly don’t consider them losers. Maybe they have family wealth I dont know about or maybe not. Doesn’t change anything. As I said, this is not something I can or wish to discuss with them.

[Anonymous]

Anonymous wrote:

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.

No I did not. That was not me.

[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.

I told you that we come from middle class backgrounds and so this seems like an absurd amount of wealth to me. My kids have trusts in their name from their grandparents. We, their parents, plan to leave them somewhere between $2-$5M but as you say that is out money and not theirs. But thanks for the reality check. Maybe we don’t need to teach them anything different.

[Anonymous]

Anonymous wrote: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.)

Thank you. This is great.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.)

Thank you. This is great.

Yes, if done correctly (ie your kids have a job/career and function as if they don't have a trust fund, except for education and house downpayment and any major medical issues--yes I realize those are huge perks, but they still work hard and make good money themselves and don't live a life of luxury unless their job enables it) and you can easily keep the money going for generations.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.)

Thank you. This is great.

You’re welcome. I meant to write principal instead of capital but you get my drift.

[Anonymous]

I’m 40 and my parents have been pretty open about their estate plans. My siblings and our children will all benefit in many ways. My parents are very generous with us now but we really just invest it for our retirement, not to subsidize a lifestyle we can’t afford on our own. My dad wrote us all a letter detailing how he hopes we deal with their generosity and it’s a really good roadmap. They have set up trusts for us and our children that are fully funded and when they pass the remainder of their estate will go to a charitable foundation that my siblings will oversee. I hate talking about it with my parents because it’s estate planning!