Inheriting Money in America

Consumerism Commentary carried a post yesterday by its founder Flexo, who seems to be changing his nom-de-blog to Luke Landes, which is more alliterative and almost sounds like a real name. Should Rich Families Leave Their Wealth to Their Children? is a reflection on one of those topics that would be a recurring theme, if only we were comfortable discussing it.

It boils down to an important financial planning question. Are you saving so that you can have enough to live a long and happy retirement or so that you can have a long and happy retirement and then leave a little something to the kids? Or maybe even more than a little something?

If you poke around the mainstream personal finance literature, you will find that leaving money to the kids is rarely discussed or even mentioned as a possible savings goal. Indeed, there is a vein of personal finance literature that emphasizes how important it is to not give money to your grown children.

And yet. Having money left over when you go is clearly a widespread ambition. It is the unspoken flip side to the fear of running out while still alive, and I think it is one of the big reasons annuities are not popular.

Personally, I do not have strong feelings about it. I love my kids (who are both currently non-grown children) and imagine that leaving them a small pile when I go would be a nice thing. Since I hope that they will be around retirement age when I meet my maker, the money might come in particularly handy. But it is not the highest of my planning priorities.

And it is my sincere wish that my parents spend their last dollar on their last day. I have no ambition or expectation of inheriting anything of monetary value from them. (And I would prefer, for obvious reasons, that they not run out of money, but I would happily accept that as the downside to having them around longer than expected.)

Flexo/Luke discusses this in the context of American culture, comparing it implicitly to European culture. Europe is our continent of cultural, if not genetic, origin, so this is useful.

I happen to be an expert on European culture. (I have personally visited there at least half a dozen times. Also, I read The Economist.) And I can share the following profound observation.

Rich Europeans prefer people assume that their money was inherited, the older the better, even if they made it all themselves relatively recently. Rich Americans prefer the opposite, that people think they made every dime themselves, even if great-granddad was a partner in Standard Oil.

When you get down to it, Americans consider inherited wealth to be embarrassing. Calling somebody in their 20s a “trust-fund baby” is to conjure up images of somebody spoiled, lazy, and decadent, in short, somebody useless to society.

Wanting to leave money to your kids is only a bit less embarrassing than having inherited money from your parents. In both cases, the implication on this side of the pond is that the heir is lacking in talent, that he could not make it on his own.

What set off the Consumerism Commentary post is some survey info from US Trust which tells us that 32% of high net worth Americans (basically millionaires, so well-off but not private jet aristocrats) said that leaving money to kids was unimportant. Flexo/Luke and the CNN item that is his source spin this as a surprisingly high number.

But I am surprised how low the number is. It implies that the easy majority, 68% of HNW Americans, think it is important to leave money to their kids. I think that probably even more would like to leave their offspring money, but getting 68% of them to admit it, even on an anonymous survey, is impressive.

This is still something of a taboo subject. Just how awkward it is can be illustrated by data from the same survey. Only 37% of HNW Americans fully disclose the extent of their wealth to their children. “The main motivation behind not telling their kids how rich they are is concern that it would "negatively impact their work ethic."”

In other words, the danger is that if you tell Junior about the $2M he is likely to come into later in life, he might act accordingly. Can’t have that. No. Just wouldn’t do.

[That’s John D. Rockefeller and his son John D. Junior in 1915. You can tell they are rich from the special hats they were then required to wear.]

PF Blogs | Frank Curmudgeon | June 19, 2012 8:59 am

69 Comments

By Flexo, June 19, 2012 @ 1:39 pm

Thanks, Frank! I think the discussion about attitudes surrounding inheriting wealth would be impossible without considering the culture… I hate generalizing as much as anyone, but the cultural interests of those who found a society go on to inform attitudes for generations to come. Europeans came to the colonies to get away from the economic restrictions in Europe (among other things, of course), but it’s interesting to hear about European attitude today. I would have expected that American culture and attitudes towards money would have replaced the older approach in modern Europe, especially as American culture has invaded Europe in other ways.
By CalLadyQED, June 19, 2012 @ 3:38 pm

Hi Frank. I’m a huge fan.

I think you need to reconider the paragraph that starts “But I am surprised.” 1) No, depending on how the survey was done, 32% saying it’s unimportant means that 68% refused to answer, gave two answers or some otherwise invalid answer, or said it was something other than “unimportant.” Could be they don’t care. Like you. 2)The lower/higher stuff is hard to read and understand.
By Frank Curmudgeon, June 19, 2012 @ 4:55 pm

Flexo:

I am hoping the Europeans don’t adopt our attitudes to inherited money, becuase we are the crazy ones. But I do hope they lose their sense of class distinctions. (Class and wealth are largely separate concepts there, something that often confuses us Yanks.)

CallLadyQED:

Glad to see you here again. And you make a very good point about the 32%. It inspired me to go and find the actual report (http://www.ustrust.com/publish/content/application/pdf/GWMOL/2012-UST-Insights-Wealth-and-Worth-Full-Report.pdf) which seems to say it really was a yes/no question. Also, the really interesting bit is that about 3/4 of people younger than 46 or older than 67 thought leaving money to kids was important but only 57% of Baby Boomers did. They really are the Me Generation.
By Annemarie, June 21, 2012 @ 10:48 am

Very glad you’re back. BMA was missed.

I inherited money from my parents. Multi-great grandfather was in lumber and the family tree is full of frugal German Americans who believe that not only do you carefully use your inheritance but you make absolutely sure you pass it on. Not to do so is somehow disrespectful to all the frugal folks before you.

But I don’t talk to anyone about it. Except on the Internet, apparently.
By jim, June 23, 2012 @ 6:21 pm

“The main motivation behind not telling their kids how rich they are is concern that it would “negatively impact their work ethic.””

This has generally been my feeling. I do think there is a fair risk that people may not work as hard and have lower ambition if there is a significant inheritance on the horizon. I know a couple people who act that way specifically. But of course not everyone with money in the family lacks work ethic. Maybe I’m just imagining a cause and effect between the family money and the lack of ambition.
By Oizthn, May 12, 2023 @ 1:55 pm

cheap tadalafil 20mg buy generic tadalafil 5mg medications for ed
By Aarpik, May 20, 2023 @ 1:33 am

purchase accutane for sale amoxicillin 500mg us order generic zithromax
By Mfdoke, May 21, 2023 @ 3:27 pm

azipro tablet buy gabapentin 800mg gabapentin 600mg us
By Dfckls, May 23, 2023 @ 11:40 am

order generic lasix 100mg brand albuterol purchase ventolin inhalator sale
By Gwyrpn, May 25, 2023 @ 5:14 am

vardenafil 20mg without prescription order tizanidine without prescription order hydroxychloroquine 200mg
By Endpcx, May 26, 2023 @ 10:40 am

order altace online cheap altace 10mg generic how to buy etoricoxib
By Ueydnl, June 15, 2023 @ 3:59 am

buy ampicillin medication ampicillin 500mg cheap order flagyl 200mg online cheap
By Izpnrj, June 15, 2023 @ 11:17 am

tetracycline oral cyclobenzaprine 15mg usa buy lioresal cheap
By Sxtkmh, June 16, 2023 @ 11:41 pm

bactrim 960mg us cephalexin over the counter brand cleocin 150mg
By Uqqbhn, June 17, 2023 @ 12:47 am

buy toradol pills for sale order inderal 20mg pills buy inderal 10mg
By Svninw, June 18, 2023 @ 3:03 pm

clopidogrel 75mg canada clopidogrel 150mg brand order warfarin 5mg online cheap
By Iyunrm, June 18, 2023 @ 7:50 pm

cost erythromycin 500mg buy nolvadex 10mg sale tamoxifen 10mg without prescription
By Xelpev, June 20, 2023 @ 5:37 am

reglan uk buy reglan online cheap esomeprazole without prescription
By Cvvjqr, June 20, 2023 @ 5:18 pm

cost rhinocort careprost sale buy careprost eye drops for sale
By Xiihft, June 21, 2023 @ 10:17 pm

topamax 200mg generic levofloxacin over the counter buy cheap generic levofloxacin
By Uqcnzj, June 22, 2023 @ 2:03 pm

robaxin over the counter order sildenafil 100mg sale sildenafil 50mg brand
By Ouipmy, June 23, 2023 @ 1:14 pm

buy cheap dutasteride purchase dutasteride pills buy mobic 7.5mg sale
By Yjdcct, June 24, 2023 @ 10:43 am

purchase sildenafil online cheap order sildalis without prescription buy generic estrace
By Bduaed, June 25, 2023 @ 3:20 am

buy celecoxib 100mg for sale buy celecoxib 100mg pills ondansetron 4mg price
By Oqtwkd, June 26, 2023 @ 9:40 am

brand lamictal 50mg order lamotrigine 50mg online cheap oral prazosin 2mg
By Ahualk, June 26, 2023 @ 6:47 pm

aldactone 25mg cheap buy aldactone 100mg pill valtrex brand
By spravki-kupit.ru, June 27, 2023 @ 12:22 am

справки москва
By диплом о высшем образовании, June 27, 2023 @ 9:08 pm

If you are going for best contents like I do, only pay a visit this website everyday since it provides quality contents, thanks
By Bhykeq, June 28, 2023 @ 9:35 am

cheap propecia 1mg purchase sildenafil generic order sildenafil pill
By Fgxpjg, June 28, 2023 @ 10:40 am

retin order online order tadalis 20mg generic avana 100mg
By накрутить просмотры яппи, July 30, 2023 @ 7:08 am

Hi there, always i used to check blog posts here early in the morning, since i love to learn more and more.
By Ipakvt, July 31, 2023 @ 3:24 pm

buy decadron 0,5 mg without prescription buy nateglinide 120mg generic cost nateglinide 120 mg
By smartremstroy.ru, July 31, 2023 @ 7:18 pm

I’m gone to say to my little brother, that he should also visit this blog on regular basis to get updated from newest information.
By Ntsmoq, August 1, 2023 @ 2:09 am

purchase trileptal online cheap uroxatral 10mg generic actigall for sale online
By daachnik.ru, August 2, 2023 @ 4:50 am

It’s great that you are getting ideas from this article as well as from our discussion made here.
By химчистка матраса в смолевичах, September 2, 2023 @ 9:45 am

Have you ever considered about including a little bit more than just your articles? I mean, what you say is valuable and all. Nevertheless just imagine if you added some great photos or video clips to give your posts more, “pop”! Your content is excellent but with images and clips, this site could undeniably be one of the greatest in its niche. Wonderful blog!
By химчистка диана цены на услуги в борисове, September 2, 2023 @ 1:40 pm

Hi, i think that i saw you visited my web site so i came to
By Gwrehw, September 3, 2023 @ 5:50 am

buy prasugrel generic dimenhydrinate 50 mg tablet cost detrol 2mg
By Xgawhk, September 3, 2023 @ 6:36 pm

etodolac 600 mg generic buy generic pletal for sale order cilostazol 100 mg generic
By Flutxy, September 6, 2023 @ 6:25 am

order ferrous sulfate 100 mg sale buy actonel pills for sale sotalol 40 mg cost
By sadovoe-tut.ru, September 6, 2023 @ 7:20 pm

I am extremely inspired with your writing talents and alsowell as with the format on your blog. Is this a paid topic or did you customize it yourself? Either way stay up the nice quality writing, it’s rare to peer a nice blog like this one these days..
By agrosadovnik.ru, September 6, 2023 @ 7:34 pm

Thank you for the auspicious writeup. It in fact was a amusement account it. Look advanced to far added agreeable from you! By the way, how can we communicate?
By payday loans online, October 7, 2023 @ 4:52 pm

Truly no matter if someone doesn’t understand then its up to other viewers that they will help, so here it happens.
By Jehgei, October 8, 2023 @ 12:54 am

dilantin generic dilantin 100 mg drug buy ditropan online
By online television, October 9, 2023 @ 2:37 am

Great web site you have here.. It’s hard to find good quality writing like yours these days. I really appreciate people like you! Take care!!
By Rnjwuv, October 10, 2023 @ 2:09 am

buy cheap generic loratadine buy altace 5mg pill order generic dapoxetine 90mg
By Wfupym, October 10, 2023 @ 2:38 am

buy lioresal without prescription order amitriptyline pill buy toradol generic
By online television, October 10, 2023 @ 8:19 pm

hi!,I really like your writing so much! percentage we keep in touch more approximately your post on AOL? I need an expert in this space to solve my problem. May be that is you! Looking forward to see you.
By Cjmhmb, October 11, 2023 @ 7:21 pm

lioresal oral toradol uk toradol 10mg sale
By Acsdol, October 14, 2023 @ 5:11 am

fosamax 70mg ca fosamax 70mg over the counter nitrofurantoin 100 mg pill
By Cbjvqo, October 14, 2023 @ 7:47 am

cheap amaryl 1mg buy amaryl generic order etoricoxib 60mg online
By чеки гостиницы с подтверждением, October 15, 2023 @ 5:30 pm

Simply wish to say your article is as surprising. The clearness on your post is simply spectacular and i can think you are knowledgeable in this subject. Well together with your permission allow me to take hold of your RSS feed to stay up to date with coming near near post. Thank you one million and please continue the rewarding work.
By Rxltle, October 16, 2023 @ 10:20 am

oral propranolol plavix 150mg tablet buy clopidogrel 150mg without prescription
By гостиничные чеки купить в москве, October 16, 2023 @ 3:13 pm

I absolutely love your blog and find nearly all of your post’s to be precisely what I’m looking for. Does one offer guest writers to write content to suit your needs? I wouldn’t mind publishing a post or elaborating on many of the subjects you write regarding here. Again, awesome web log!
By online television, October 17, 2023 @ 9:17 pm

Hi there, its nice piece of writing concerning media print, we all be familiar with media is a great source of information.
By Pxfpug, October 18, 2023 @ 3:50 pm

order pamelor 25 mg pills panadol 500 mg price generic paracetamol
By Vravug, October 20, 2023 @ 4:02 pm

xenical 60mg usa diltiazem pills diltiazem price
By Mfoknq, October 21, 2023 @ 8:23 am

purchase coumadin online coumadin medication buy metoclopramide sale
By Онлайн казино, October 21, 2023 @ 6:07 pm

It is appropriate time to make a few plans for the longer term and it is time to be happy. I have read this publish and if I may just I want to recommend you few interesting things or suggestions. Perhaps you could write next articles referring to this article. I wish to read more things approximately it!
By стяжка пола, October 23, 2023 @ 3:56 pm

Нужна стяжка пола в Москве, но вы не знаете, какой подрядчик лучше выбрать? Обратитесь к нам на сайт styazhka-pola24.ru! Мы предоставляем услуги по устройству стяжки пола любой площади и сложности, а также гарантируем качество и надежность.
By snabzhenie-obektov.ru, October 24, 2023 @ 11:55 am

снабжение строительных объектов москва
By Mholzm, October 24, 2023 @ 9:48 pm

purchase famotidine sale buy tacrolimus 5mg generic buy prograf 5mg for sale
By Itkapo, October 25, 2023 @ 12:58 am

order astelin online irbesartan online order how to get avalide without a prescription
By где можно сделать чеки на гостиницу, October 25, 2023 @ 10:49 pm

Do you mind if I quote a couple of your posts as long as I provide credit and sources back to your weblog? My blog site is in the very same area of interest as yours and my visitors would genuinely benefit from a lot of the information you present here. Please let me know if this alright with you. Thanks a lot!
By оштукатуривание стен, October 26, 2023 @ 2:23 pm

Нужная услуга для идеальной отделки интерьера- это механизированная штукатурка стен. На mehanizirovannaya-shtukaturka-moscow.ru предлагаются только самые качественные услуги.
By Xfynuv, October 27, 2023 @ 5:02 pm

brand nexium buy topamax sale topamax 100mg over the counter
By Koewzv, October 28, 2023 @ 11:58 pm

order allopurinol sale cheap clobetasol oral crestor
By Ndfyhu, October 29, 2023 @ 9:01 am

buy sumatriptan 50mg online cheap how to get dutasteride without a prescription order dutasteride for sale
By сделать чеки на гостиницу в москве, October 29, 2023 @ 10:07 am

Hello there! This article couldn’t be written any better! Looking at this post reminds me of my previous roommate! He constantly kept talking about this. I am going to forward this article to him. Pretty sure he’ll have a good read. Many thanks for sharing!