When it comes to passing on wealth to the next generation, people seem to fall firmly into one of two camps: either they want to leave all the riches they’ve accumulated during their lifetimes to their children, or they adopt the worldview that inherited wealth, in and of itself, is not necessarily a good thing.
The philanthropists who signed the Giving Pledge this summer tend to fall into the second camp. Through the Pledge, Bill Gates and Warren Buffett invited the wealthiest Americans to commit to giving away the majority of their money philanthropically. Those who have signed the pledge seem to share the sense that, although they’ve made sure their children are provided for, there’s a point at which you really can have too much of a good thing.
Here’s a sampling of quotes on the subject from some of the signatories:
- Bernie Marcus “[I]t has always been my belief that leaving enormous wealth for our children does nothing to stimulate their ability to make it on their own.”
- T. Boone Pickens “I’m not a big fan of inherited wealth. It generally does more harm than good.”
- Tom Steyer and Kat Taylor “Our original impetus for saving money revolved around wanting our kids to enjoy the same educational opportunities that we had, so that they could succeed on their own terms, assuming that they worked hard…We never aimed to endow our children with wealth. After honest conversations with each of them, singly and together, we know that they don’t want that either…We want to leave our kids a different kind of inheritance, an example of at least trying to lead a worthy life.”
Warren Buffet, Bill Gates, and many other millionaires and billionaires have decided they will benefit their children more by giving them less in the way of monetary resources and more in the way of non-monetary resources like values.
So, where do you stand? And, just as importantly, where do your clients stand?
Stephen C. Hartnett, J.D., LL. M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Road, Suite 240
San Diego, CA 92124