Reply to Generational wealth. What's behind the obsession?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I’d rather have my children enjoy generational wealth than slave away at Google, Morgan Stanley, a federal agency, or other soul crushing office work. If they pursue the arts, great. If they pursue being a teacher or something low paying, great. If they want to just work out and travel and live well with their own families, great. Any of it is better than the toil and striving and stress you see on this forum and in the DMV. [/quote]

I have no idea how much wealth you have, but have in laws on my spouse's side where the grandparents left $50MM to a son and two grandchildren...and it's all gone now (happened over 20 years).  The all "traveled and lived well"...literally.  None of the three ever held a real job...just a series of lifestyle businesses that ate capital and went nowhere, in addition to traveling a ton, living in resort towns and spending without abandon.

Look...if the kids hadn't been such dumbf**ks of course they could have lived well off just the dividends, but the grandparents who made the money kind of had the same attitude as you and didn't instill any kind of stewardship over the estate.

BTW, the money was all in generational trusts...if the ones who benefit from the trusts want to get at the principal, they can.  In this case, it was all their stupid business ideas.  The trustee was not going to risk getting sued for not releasing the principal even though they probably thought the ideas were not going anywhere.

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That was poor planning on the grandfathers part and poor advice from whoever set up the trusts. The trusts should have had professional trustees with that amount of money involved.  I doubt there was any thinking of preserving money for future generation.

If they had been generational trusts, the money would have been more tightly controlled.  It would be used for housing, education, household needs, medical, vacations etc.   The trustee would ask the beneficiaries to fill out a form listing all of the their expenses and the trustee would send a monthly payment.  If a car was needed, new housing, the trustee would wire the money directly to the dealership or real estate agent.

That’s how you preserve money and leave incentive for them to work if they want some kind of lavish lifestyle.   [/quote]

Not sure how many times it needs to be said, but often times these trusts allow for significant capital for a business as one example.  That sounds like a “good” use of funds, but can be easily abused.

A professional trustee isn’t going to be able to deny the money because it’s a bad business idea…they only do what the trust guidelines indicate.

The problem is that the kids and grandkids weren’t raised with a strong work ethic.  A motivated heir who really wants the principal will get their hands on it one way or another.

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