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The New Coffee Room

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  3. Something to consider on leaving money to your kids.

Something to consider on leaving money to your kids.

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  • MikM Away
    MikM Away
    Mik
    wrote on last edited by
    #1

    https://www.msn.com/en-us/money/other/a-man-who-hopes-to-die-with-zero-says-inheritances-aren-t-the-best-way-to-pass-wealth-to-your-children/ar-BB1nDkIu?ocid=msedgntp&pc=LCTS&cvid=523017e20ee741368ebd32b3c5694959&ei=78

    “I am fond of pigs. Dogs look up to us. Cats look down on us. Pigs treat us as equals.” ~Winston S. Churchill

    1 Reply Last reply
    • HoraceH Offline
      HoraceH Offline
      Horace
      wrote on last edited by Horace
      #2

      It makes a lot of sense to help sooner rather than later. Making more and more sense as time and inflation and a new economy go on. I was surprised to read the average net worth of 55-64 year olds was >1 million. Goes to show how ridiculous it is to use the word "millionaire" as if it's a meaningful distinction of wealth. I still hear leftists use it pretty often.

      I guess they may have tricked me with an average rather than a median.

      Education is extremely important.

      AxtremusA 1 Reply Last reply
      • JollyJ Offline
        JollyJ Offline
        Jolly
        wrote on last edited by
        #3

        Oh, boo-hoo-hoo...Most young people who come into money blow it. Not to mention, cost for a semi-private room in a Louisiana nursing home is almost $70k/yr, and we are one of the cheapest states.

        It doesn't hurt young people to work, to struggle, to budget. Lessons earned are lessons learned. A little help is fine, but your primary responsibility is to take care of your spouse and yourself. Gotta have enough to finish the journey.

        The rest is lagniappe.

        Also, families that try to practice generational wealth, seem to do just a bit better financially overall.

        “Cry havoc and let slip the DOGE of war!”

        Those who cheered as J-6 American prisoners were locked in solitary for 18 months without trial, now suddenly fight tooth and nail for foreign terrorists’ "due process". — Buck Sexton

        HoraceH 1 Reply Last reply
        • JollyJ Jolly

          Oh, boo-hoo-hoo...Most young people who come into money blow it. Not to mention, cost for a semi-private room in a Louisiana nursing home is almost $70k/yr, and we are one of the cheapest states.

          It doesn't hurt young people to work, to struggle, to budget. Lessons earned are lessons learned. A little help is fine, but your primary responsibility is to take care of your spouse and yourself. Gotta have enough to finish the journey.

          The rest is lagniappe.

          Also, families that try to practice generational wealth, seem to do just a bit better financially overall.

          HoraceH Offline
          HoraceH Offline
          Horace
          wrote on last edited by
          #4

          @Jolly said in Something to consider on leaving money to your kids.:

          It doesn't hurt young people to work, to struggle, to budget. Lessons earned are lessons learned. A little help is fine,

          A little help is what the article is recommending. Nowhere in it is a recommendation to sacrifice your own financial future for your kids' financial present.

          Education is extremely important.

          1 Reply Last reply
          • JollyJ Offline
            JollyJ Offline
            Jolly
            wrote on last edited by
            #5

            The article advocates dying with $0.

            How well does that play in the Asian community?

            “Cry havoc and let slip the DOGE of war!”

            Those who cheered as J-6 American prisoners were locked in solitary for 18 months without trial, now suddenly fight tooth and nail for foreign terrorists’ "due process". — Buck Sexton

            HoraceH 1 Reply Last reply
            • MikM Away
              MikM Away
              Mik
              wrote on last edited by
              #6

              I have no intention of dying with zero.

              “I am fond of pigs. Dogs look up to us. Cats look down on us. Pigs treat us as equals.” ~Winston S. Churchill

              1 Reply Last reply
              • JollyJ Jolly

                The article advocates dying with $0.

                How well does that play in the Asian community?

                HoraceH Offline
                HoraceH Offline
                Horace
                wrote on last edited by
                #7

                @Jolly said in Something to consider on leaving money to your kids.:

                The article advocates dying with $0.

                How well does that play in the Asian community?

                Someone wrote a book with that title. It's hard to predict the day you'll die though, so I would assume it's hyperbole.

                I think the idea is to take the money you'd hope to leave to your kids after you die, and portion it out to them over time, starting well before you die. This requires an impossible prediction of how much you'll need of course, but it's the theme.

                Education is extremely important.

                1 Reply Last reply
                • George KG Offline
                  George KG Offline
                  George K
                  wrote on last edited by
                  #8

                  I worked with a surgeon who said, “I want the last check I ever write to bounce.”

                  "Now look here, you Baltic gas passer... " - Mik, 6/14/08

                  The saying, "Lite is just one damn thing after another," is a gross understatement. The damn things overlap.

                  1 Reply Last reply
                  • HoraceH Horace

                    It makes a lot of sense to help sooner rather than later. Making more and more sense as time and inflation and a new economy go on. I was surprised to read the average net worth of 55-64 year olds was >1 million. Goes to show how ridiculous it is to use the word "millionaire" as if it's a meaningful distinction of wealth. I still hear leftists use it pretty often.

                    I guess they may have tricked me with an average rather than a median.

                    AxtremusA Away
                    AxtremusA Away
                    Axtremus
                    wrote on last edited by
                    #9

                    @Horace said in Something to consider on leaving money to your kids.:

                    I was surprised to read the average net worth of 55-64 year olds was >1 million. …
                    I guess they may have tricked me with an average rather than a median.

                    Indeed they have, see https://www.nerdwallet.com/article/finance/average-net-worth-by-age

                    “Average” is above $1.5 million.
                    “Median” is below $400k.

                    1 Reply Last reply
                    • AxtremusA Away
                      AxtremusA Away
                      Axtremus
                      wrote on last edited by Axtremus
                      #10

                      Most of these ideas about estate planning work only if you can predict with fair accuracy how one you will live and no expensive ailment befalls you before you kick the bucket. :man-shrugging:

                      1 Reply Last reply
                      • HoraceH Offline
                        HoraceH Offline
                        Horace
                        wrote on last edited by
                        #11

                        I see it as more of a directional nudge than a coherent plan where you can put a number to the amount you should give your kids before you die. A directional nudge away from giving them nothing until you die, at which time they get the lump sum you managed to accumulate, and towards giving some of that to them while they're younger and could benefit more from it.

                        Education is extremely important.

                        1 Reply Last reply
                        • HoraceH Offline
                          HoraceH Offline
                          Horace
                          wrote on last edited by
                          #12

                          My wife has befriended several Chinese couples in this area who have obviously had substantial help from their parents in purchasing their first homes in their late 20s or early 30s.

                          Education is extremely important.

                          1 Reply Last reply
                          • AxtremusA Away
                            AxtremusA Away
                            Axtremus
                            wrote on last edited by
                            #13

                            I am OK with the directional nudge.

                            Make the kids struggle a bit on purpose? As a matter of education and development of character, fine to an extent. But that happens before they graduate high school. Hopefully by then you can see whether a kid is one who can appreciate delayed gratification or one who would blow a lump sum quickly. Intentionally make them “struggle more” beyond that probably won’t yield much additional benefit at the margin.

                            1 Reply Last reply
                            • CopperC Offline
                              CopperC Offline
                              Copper
                              wrote on last edited by
                              #14

                              I think the best thing you can do is leave the children a good accounting of the estate and detailed document about how to deal with it.

                              My list of userid/passwords is 73 pages long. When the time comes they will be happy to have it.

                              A simple list of assets, subscriptions, memberships and so on would be nice too.

                              And wrap it all up in a Will and a Trust.

                              1 Reply Last reply
                              • LuFins DadL Offline
                                LuFins DadL Offline
                                LuFins Dad
                                wrote on last edited by
                                #15

                                It’s a sliding scale, and really varies a lot on your very individual circumstances. Right now, if something happened to Karla and I, the property, insurance, and assets are weighted heavily towards getting Lucas through his schooling and getting a good start on his life. Yes, there will be a trust for Finley and we are making sure that he would not be a financial burden on his guardians, but the goal and hope is to have Lucas be able to comfortably assume that guardianship when Finley is 10-13 and Lucas would actually be an adult and established and ready to take on that responsibility. And we trust that Lucas will be able to provide a similar support for Finley when he gets to college and young adulthood.

                                As we get older, and they get older, that will shift. When I hit retirement age, Finley will just be graduating HS and Luke should be well established At that point the will will lean more heavily towards getting Finley but with Lucas in a trustee role.

                                After that, I’m hoping to shift again. And we will be looking at a $0 inheritance. Instead, I think we will be aiming for a property to be left. We would like to build a retirement home that would be accessible for both Lucas and Finley to bring their families to. A 4 season place, maybe in Ohiopyle where everybody could enjoy the lake in the spring/summer, skiing in the winter, and hiking in the mountains whenever… The hope is that this would become a familial site that will stay in the family for several generations. So no money, just the land…

                                That’s the hope, anyway. But who knows? We’re staying flexible for now.

                                The Brad

                                1 Reply Last reply
                                • 89th8 Online
                                  89th8 Online
                                  89th
                                  wrote on last edited by
                                  #16

                                  Good plans, LD. Love the vision, too.

                                  Yeah it comes down to each family's situation, savings, and trust.

                                  I want our kids to know the value of investing and compound interest (I learned that later than I should've), and I want them to have access to our wealth without knowing the amount (or inheritance) directly. So I've set up UTMA accounts for each kid, and contribute to it on a monthly basis. It follows the S&P. So in theory (and for example) if over 21 years I contribute 25k, they should have about 80-100k in it by the time they turn 21 and automatically get access to it.

                                  Will they use it for drugs? Hopefully not. Perhaps they'll learn the value of investing and just keep the contributions going and then retire early. Or perhaps they'll use it for a house purchase downpayment.

                                  1 Reply Last reply
                                  • RenaudaR Offline
                                    RenaudaR Offline
                                    Renauda
                                    wrote on last edited by
                                    #17

                                    I am leaving everything to my spouse. She can dispose of it as she wishes. But if the teenager gets a penny or two that’s up to her.

                                    If I survive my spouse, it is my intention to
                                    bounce the cheque on the undertaker.

                                    Elbows up!

                                    Doctor PhibesD 1 Reply Last reply
                                    • RenaudaR Renauda

                                      I am leaving everything to my spouse. She can dispose of it as she wishes. But if the teenager gets a penny or two that’s up to her.

                                      If I survive my spouse, it is my intention to
                                      bounce the cheque on the undertaker.

                                      Doctor PhibesD Online
                                      Doctor PhibesD Online
                                      Doctor Phibes
                                      wrote on last edited by
                                      #18

                                      @Renauda said in Something to consider on leaving money to your kids.:

                                      If I survive my spouse, it is my intention to
                                      bounce the cheque on the undertaker.

                                      I hate to think what he'll do to your corporeal remains when he discovers the shortfall.

                                      I was only joking

                                      RenaudaR 1 Reply Last reply
                                      • MikM Away
                                        MikM Away
                                        Mik
                                        wrote on last edited by
                                        #19

                                        The problem being one must to plan one’s demise pretty precisely.

                                        “I am fond of pigs. Dogs look up to us. Cats look down on us. Pigs treat us as equals.” ~Winston S. Churchill

                                        LuFins DadL 1 Reply Last reply
                                        • MikM Mik

                                          The problem being one must to plan one’s demise pretty precisely.

                                          LuFins DadL Offline
                                          LuFins DadL Offline
                                          LuFins Dad
                                          wrote on last edited by
                                          #20

                                          @Mik said in Something to consider on leaving money to your kids.:

                                          The problem being one must to plan one’s demise pretty precisely.

                                          Right. It’s one thing to bounce the check to the undertaker, quite another to bounce the check for the 2nd to last chemotherapy session…

                                          The Brad

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