For Parents who Think that their Kids are Unfit for Inheritance, Try Brewster’s Millions

Some wealthy parents think that their kids are not qualified to inherit their fortune.

According to CNBC, (bold emphasis mine)

A new study from U.S. Trust says that only half of millionaire baby boomers think it’s important to leave money to their kids. A third of them said they would rather leave the money to charity rather than their kids.

There are two explanations for their stinginess.

The kind explanation is that today’s boomers want their kids to grow up with the same middle-class values they had. They want their offspring to learn struggle and hard work and failure and the joys of earned success and all the other lessons that helped the boomers become successful (those, along with 30 years of bull markets and strong economic growth).

As Warren Buffett said, he wants leave his kids enough to do anything they want, but not so much that they can do nothing.

Aligned with this benevolent explanation is their commitment to charity and the broader world.

The second and perhaps more realistic explanation is that boomers don’t think their kids can handle all that money. Only 32 percent of baby boomers are confident their children will be prepared emotionally and financially to receive a financial legacy.

Granted, not all generations feel this way. Gen-Xers and Gen-Yers, along with the generation older than the baby boomers, are more disposed to leave money to their kids. More than two thirds of those aged 18 to 46 and those over 67 say it’s important to leave a financial inheritance to their children.

“Our survey points to a shift in generational behavior and outlook, most likely shaped by personal experience and societal responses to economic realities,” said Keith Banks, president of U.S. Trust. “The next generation has not experienced the consistently strong economic growth or investment returns that baby boomers experienced during the longest bull market in history.”

And there may be a third explanation: the baby boomers plan to spend most of their money. Given the low investment returns in today’s markets, their long lifespan and their famously non-apologetic lifestyles, the boomers are probably burning through their fortunes at a rate that won’t leave much for the next generation.

In the end, however, the phenomenon outlined in the survey boils down to a simple problem: The baby boomers have raised kids who are unequipped to inherit large amounts unearned wealth.

I think that this subject is strictly subjective and a familial issue which can NOT be judged as a one-size-fits all thing as every family has their own idiosyncrasies.

The issue of inheritance derives from many complex intertwined factors in terms of people relationships—particularly psychological, behavioral and ethical aspects—that includes among others the perception of the degree of interpersonal relationship, individual attitudes, values and work ethics, learning ability, acquired traits, and more.

Nonetheless, for the heck (or fun) of it, parents who think that their children are unfit for inheritance, may want to try the Rupert Horn approach (the great uncle of Monty Brewster from the 1985 comedy film Brewster’s Million starred by the late Richard Pryor-and also the late John Candy).