Reply to Are your adult children grateful for their trust funds?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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 [i]huge[/i] 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)? [/quote]

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.

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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[/quote]

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.

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