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How Much Is Too Much to Leave Your Kids?

| October 19, 2015
Legacy Planning

This was a recent headline in a newsletter we read frequently called “Trust Advisor.” The article opened with the statement, “Imagine that you’re a self-made person with $100 million in assets. Do you leave it all to your children?”1

Okay… $100 million is a bit outrageous, but it did give me a new perspective. What if my estate was $100 million? Would this be too much to leave my kids? ... If “yes,” why would it be too much?

The truth is that all of our families are dysfunctional in one way or another. At least this is what my dad has observed over the years. But it is true….we have all been dysfunctional to some extent at some point in our life. Sometimes it is serious issues—money, vices, addiction,laziness, etc. And sometimes the issues are less obvious, but just as critical—emotional, the inability to say “no.”

I feel it is a fairly safe assumption that that none of us want our money to become the ruin of our children - we want our money to enrich their lives. We use the words “legacy planning” instead of “estate planning” and the reason is simple. We know your legacy is far more important than your estate. We know you want your kids to know the value of a dollar. We know you want them to be successful on their own. We know you want them to carry on the same family values that you hold dear to your heart.

So how much is too much to leave to your kids?

You have heard us say that our experiences are what help us become great advisors. We haven’t lived your life, but we have lived it through the experiences of our clients over the last 26 years. Which is a prelude to the answer to that question, because it is an answer that you probably don’t want to hear: Our experiences have taught us that people who inherit more than what they have built for themselves do not respect the value of that dollar amount. 99 percent of the time they either spend it overnight or let it be the ruin of them.

The even harder truth is most of our kids will not be as financially successful as we are. So then the question is not, “how much is too much to leave to your kids”. Instead it is, “how do I leave my legacy, not just my estate?”

We all have it ingrained that our only option is to essentially leave a check behind when we die. The good news is that this is furthest thing from the truth. The options are too numerous to count. The check is just a single tool to fund your legacy. The rest of the planning is what really counts.

A few weeks ago I wrote about my dad sharing a summary of a lesson from his Sunday School. He summarized it with these two questions: “If the end of the world came tomorrow, are you ready?” My response was, “Of course!” But then he continued, “You may be ready, but are you prepared?” He ended talking about all the things he hasn’t taught his grandchildren that he wants to and the things he wants to do in our business with us before his time is up. This was all part of his legacy.

So my homework for you today is to really think about your legacy. Then let us help you plan it. The money will happen.

  1. Yip, Pamela. (2015). How Much is Too Much to Leave Your Kids?