Would you want your adult kids to inherit money?

[btk2333]

Would you want your kids to inherit money at a relatively young age, like mid 20's to mid 30's? My folks are wanting to make a skip-generation trust for a lot of reasons, but mostly due to a sibling's poor choices. I totally get why this sibling can't inherit anything due to the current circumstance, but I'm not really sure that I want my own kids inheriting anything substantial in young adulthood via a skip-generation trust either. I am really raising my kids to understand money and frugality, and I feel like an inheritance in their 20's or 30's could undermine what I am teaching them if that makes sense.

This is stressing me out. Ideally I'd love to see my parents spend every cent they have or else donate it to charity, but neither is likely. I don't even know how to deal with this with my parents at this point, or if I'm concerned for nothing.

Absolutely- money is stressful- I would love if my kids inherited enough money that they could pursue their dreams without having to worry about paying their bills. Would I want them to inherit $10 million when they're in college, no, but I hope I can leave them enough that they won't be stressed about day to day expenses.

 

[eliza61]

I know my parents would want me to continue becoming a more financial stable and independent adult and I would want that for myself as well. Sure, I could use some of it to travel and do something I really love but I would put a large portion aside.

One doesn't preclude the other. it very interesting, not long ago the 20's were the time you wanted your kid to make mistakes. now it seems that if at 21our kids are not living on their own, with a 401k, 10 grand in savings and saving for a house they are some how "irresponsible".
Last week, there was a thread where folks declared that paying for your adult kid to go on vacation with the family some how prevents them from becoming "responsible".

Lol, I find it funny that we call them adults but only if they do things we deem "acceptable". personally I think a 20 something that travels around the world safely and enjoyable is on his way to definitely being stable and independent

I'm always fascinated at the matrix we use to measure if our kids are "adults"

 

[DisneyRunner2009]

In the trust DH and I have, the plan is to release the money, in increments, at two different ages. Hopefully eliminating stupid money handling skills at an early age, with the hope of being wiser at a later age.

 

[Gumbo4x4]

No. The worst that can happen is that they learn to live high off the hog and continue to do so after the money is gone. I've watched that happen with a friend, and I don't want it to happen to my kids.

I think a MORE likely scenario is they learn how quickly money can go away if you're not careful with it - as was the case with one person I know who got a large inheritance young. Oh, and despite blowing it all, he loved every minute & has a lot of great memories of those days.

 

[AquaDame]

You'll know your kids, but as an early 30 something I wish I were so lucky! No inheritances at all for anyone in our families thus far, which goes to prove that wisdom and age don't always go hand in hand. My husband and I are on track to do better than them all, but if we were irresponsible now I doubt it'd resolve itself due to age alone.

 

[Barnabe]

I've known kids who have inherited money in their 20's and they spent through most of it. I'm not saying this happens all of the time, but I think people need to have incentives to work and save money. If it's doled out, there's no incentive. I just think Waiting until someone is older may be a more sensible approach.

 

[Gumbo4x4]

I've known kids who have inherited money in their 20's and they spent through most of it. I'm not saying this happens all of the time, but I think people need to have incentives to work and save money. If it's doled out, there's no incentive. I just think Waiting until someone is older may be a more sensible approach.

Of course, if I knew I had a windfall coming in 10-15 years, what's to stop me from spending like a drunken sailor today?

 

[Madteaparty001]

I've known kids who have inherited money in their 20's and they spent through most of it. I'm not saying this happens all of the time, but I think people need to have incentives to work and save money. If it's doled out, there's no incentive. I just think Waiting until someone is older may be a more sensible approach.

There are plenty of 30, 40, and 50 year olds who have won the lottery and blew through the money ending up worse off then before they won. I, and many others, are saying age isn't a determining factor in being financially savvy. Teaching them from an early age how money works and how to spend and save properly is the best you can do. Trying to control your children when they are already adults only leads to resentment. I do agree with not telling them they have the money coming to them before hand as circumstances can always change.

 

[MillauFr]

My dad always brings up this subject and I tell him every time to make sure he spends every last dollar so he won't have to give any money away. It is his money and he should enjoy it not anyone else.

 

[lauradis]

Of course, if I knew I had a windfall coming in 10-15 years, what's to stop me from spending like a drunken sailor today?

If we are all going to be honest Disney would get some of that money. And in my late 40s I sure would spend some of that money, being a drunken sailor

 

[Judique]

I inherited a decent sum of money when I was in my 20's. I did not go hog-wild. I paid off a car, some other bills, and got myself in a comfortable position.

I would hope that by their 20's, my kids would have the same fiscal responsibility I had...if not, I would feel I failed that aspect of parenting.

Hopefully your kids will have your good qualities.

But don't feel like a failure if you did what you possibly could. There is a point where the child must make decisions and be responsible for themselves.

In my family one sibling has 2 children. They were brought up together with very educated parents in a household where all needs were met. One went up/one went down, without getting into specifics. Parents are still supportive of both. They excelled as parents, but in the end, it is the child that has failed - they just didn't use all their gifts and chose the wrong paths.

 

[Mrs. Ciz]

I really think it depends on how you raise your kids and what kind of values you teach them about money. I have inherited money twice, once from my great grandmother and again from her daughter, my grandmother. Great Grandma's husband was a stock broker and taught all his kids the value of saving and investing. We grew up hearing how my grandma got an allowance each week for groceries from her husband. She shopped around for the best bargains and banked what was left over. When she had enough, she'd buy stocks. Over the years she amassed 1 million dollars just from her grocery savings! She had other family money that had been kept intact and passed down. We were told that's the way it's done in our family.

In her last years, the interest income from all her investments paid for her nursing home and living expenses. My parents and other children were so grateful to her for making her own arrangements and shouldering the financial responsibility for her own care. They felt it was the greatest gift she could give them.

The amount ($10,000) I got from my Great Grandma came to me in high school. I didn't touch it. At 22, fresh out of college, I used a little of it to buy a used car. The rest went towards the down payment for my first house a couple of years later.

When I inherited a pretty large sum from my grandma, I used $2000 to take my family to a family reunion in Hawaii. I used some to pre -pay for 1 year of college for each of my kids using the Virginia College Savings Plan. The other years of college were funded using their savings accounts, a couple of big tax returns and monthly income over the years. Then I invested the bulk of the money for retirement. It has been growing nicely for the past 10 years. I would like to follow in my grandma's footsteps by providing for myself in my old age.

Could I have spent it all on stupid stuff? Yes, but that was not how I was raised.

 

[disney-inspired]

I really think it depends on how you raise your kids and what kind of values you teach them about money. I have inherited money twice, once from my great grandmother and again from her daughter, my grandmother. Great Grandma's husband was a stock broker and taught all his kids the value of saving and investing. We grew up hearing how my grandma got an allowance each week for groceries from her husband. She shopped around for the best bargains and banked what was left over. When she had enough, she'd buy stocks. Over the years she amassed 1 million dollars just from her grocery savings! She had other family money that had been kept intact and passed down. We were told that's the way it's done in our family.

In her last years, the interest income from all her investments paid for her nursing home and living expenses. My parents and other children were so grateful to her for making her own arrangements and shouldering the financial responsibility for her own care. They felt it was the greatest gift she could give them.

The amount ($10,000) I got from my Great Grandma came to me in high school. I didn't touch it. At 22, fresh out of college, I used a little of it to buy a used car. The rest went towards the down payment for my first house a couple of years later.

When I inherited a pretty large sum from my grandma, I used $2000 to take my family to a family reunion in Hawaii. I used some to pre -pay for 1 year of college for each of my kids using the Virginia College Savings Plan. The other years of college were funded using their savings accounts, a couple of big tax returns and monthly income over the years. Then I invested the bulk of the money for retirement. It has been growing nicely for the past 10 years. I would like to follow in my grandma's footsteps by providing for myself in my old age.

Could I have spent it all on stupid stuff? Yes, but that was not how I was raised.

I would like to think I would be so wise with any inheritance I receive later in life.

 

[disney1990]

It really depends on your kids. Both of our daughters are very careful with money. Our youngest at only 19 was on the Disney College program and came home with money, even though most kids can't survive on what they make week to week. When our youngest was in her mid 20's, we gave her all her savings bonds from over the years. She used some to buy a used car and 5 years later still has $5,000 worth that she hasn't spend. Both daughters were taught at a young age to save & go without. I totally would trust them with an inheritance.

 

[lauradis]

I think a MORE likely scenario is they learn how quickly money can go away if you're not careful with it - as was the case with one person I know who got a large inheritance young. Oh, and despite blowing it all, he loved every minute & has a lot of great memories of those days.

That's because you can always make more money, but the one thing you can't get back is time.

Money holds no real value, but to get me the things I need, then want.

Everyone's needs and wants very.

 

[North of Mouse]

Ah, I should have added that my kids are currently 6 and 9. If they were already adults and had demonstrated their ability to manage money I would be worried

'And', you're worrying now about something that 'may' happen 20-30 years down the road?? Especially about something you will have no control over. If we decide to leave something to our 'grands' we will do so - they would be adults then. However they should decide to use it is entirely up to them, although, for sure, we would hope it would be wisely used. We will not ask our children's (their parents) input on this however.

 

[North of Mouse]

My sister's daughter in law received a $120,000 life insurance policy at the age of 20 when her father died. She blew through the money in less than a year and has nothing to show for it. I would not turn over a large inheritance to someone in their 20s.

So, to you, all adults in their mid 20's are totally irresponsible?? Dh & I had two children by age 25, buying a home, no debt otherwise, and now being retired, own our home with no debt. I was a SAHM with 3 children and we were always responsible with money - we were both raised to be that way.

Exactly. This is what I saw happen as well, only it was well more than 120K and it came in 2 chunks with the recipient managed to blow in short order with nothing to show for it. Then she continued living high off the hog and digging more and more into debt. This is what scares me.

Short of convincing my parents not to leave money to my kids, is there anything I can really do about this? I know that I can disclaim any inheritance as a legal adult, but I can't do that for my children can I? They are minors now, but wouldn't inherit it until adulthood.

No, you can't do anything about it when they're adults - just raise them to be responsible now, and don't compare every person with - 'just look what so and so did'!! 'That' can be a worry with 'any' life's choices that you see individuals make - just let it go. There's lots more things with children that young that you can be using your energy and mind on than worrying so far into the future about things that 'may' happen and you 'can't' control.

 

[ceecee]

I agree with the above poster, dole it out in increments with stipulations. That is how we are setting ours up once DD is out of school. At $500 plus a day at a lot of nursing homes it does eat up a lot of money. You may be stressing for nothing.

 

[I'mfarfaraway]

Would you want your kids to inherit money at a relatively young age, like mid 20's to mid 30's? My folks are wanting to make a skip-generation trust for a lot of reasons, but mostly due to a sibling's poor choices. I totally get why this sibling can't inherit anything due to the current circumstance, but I'm not really sure that I want my own kids inheriting anything substantial in young adulthood via a skip-generation trust either. I am really raising my kids to understand money and frugality, and I feel like an inheritance in their 20's or 30's could undermine what I am teaching them if that makes sense.

This is stressing me out. Ideally I'd love to see my parents spend every cent they have or else donate it to charity, but neither is likely. I don't even know how to deal with this with my parents at this point, or if I'm concerned for nothing.

I am not sure why this would stress you out. I think it is an incredibly generous thing that your parents are planning. If yo are teaching your children to understand money and what it can do for you then you should trust that your lessons will be taken. By the time your children are in their late 20's they are adults and their choices at that point should be theirs and theirs alone. The same goes for your parents. The choices are up to them. I am thinking that you,(and your partner) make your own choices and would not welcome someone else interfering?
How would an inheritance undermine your lesson? If they invested it, paid off student loans, or gave to charity how would that be a bad thing?

 

[NeverlandClub23]

I have been an estate planning paralegal for 7 years and have seen many unfortunate situations and circumstances in my career in regards to inheritances. Every situation is different, but I feel like my favorite trusts to prepare are ones with distributions that are staggered (like half at 30 and half at 40). I've never been a fan of trusts that bypass the children for the benefit of the grandchildren as I would hate it if unforeseen circumstances (medical, divorce, etc.) late in life stripped my child of their financial means and savings so then they're having to ask their children for money or help. Of course, that's only if the clients are doing it with the thought that their kids have the financial means to support themselves. It's a whole different story if they just don't like their kids! I am a big fan of grandchildren educational trusts, though, where you can have the bulk of your money go to the children and a set amount set aside for the grand kids education (and then to the grand kids if money is left over from the set amount after college).

I can't begin to tell you the amount of trusts I've done where the clients set out leaving a huge chunk to their grandchildren and then come back in every 6-12 months to take grand kids out that don't call to say thank you after receiving gifts from their grandparents. So always call your parents/grandparents and thank them! lol

I would like to use this opportunity as a PSA: please don't leave petty, passive aggressive distributions to people. Just leave them out. Leaving $150 in loose change to a child is sad, especially when you name their sibling as a Trustee to carry out the dirty work.