More Than Money
Issue #9

Money and Children

Table of Contents

“Personal Stories: What to Pass On”

More and more, people are questioning the norms they were given about wealth. The old rules: "Money isn't a child's concern; keep your finances a secret. Don't let your kids know what's in your will. Pass wealth to the next generation. Keep control." Here are stories from people struggling with these strictures, and stories from others experimenting with new ways to educate their children about money and to pass it on.

Mixed Messages

The unexpected sale of my grandfather's business gave me several million dollars in my early twenties. I signed the money into a "revocable" trust with the family lawyer--but now he won't agree to revoke it!

My father and I go round and round about it: I express my fury about feeling powerless, then he gets mad that I don't seem grateful. I just hate that some lawyer who has no inkling of who I really am has the power to decide what's in my "welfare and benefit!" "Trusts" should really be called "distrusts." You don't give your children a car and then sit in the back seat whenever they drive--you teach them to drive and then let them do it, even though a crash is always possible.

I want my daughter Liz, who is 10 now, to have a different experience. She'll get the money outright--but later in life. I'm not concerned she'll mishandle it. It's just too hard to get money in your 20's, when you're just figuring out who you are. I want Liz to know what she can accomplish on her own energies; to know that her friendships are not influenced by her money.

My will stipulates the money come to her after she has supported herself for 20 years. By then she'll know who she is, or she never will.

It's ironic. The lawyer lectures me that the money is there "just to protect me" and it belongs mainly to the future. I argue that most people don't need a million dollars in the bank just in case they get in trouble. Yet, as difficult as wealth has been for me, I can't imagine not giving it to my daughter. It's like a set of china that gets passed down from generation to generation. Here, this is yours, it is part of being in this family.

--Wanda S.

A Helping Hand

I want to give my daughter a hand in becoming self-supporting, but no way do I want to make her rich. Wealth sidetracked me from taking responsibility for my own life in this economy. It's done me no good to flounder around in that freedom--supposedly so marvelous, but in reality, the freedom to lead an unreal existence.

My will leaves everything in a trust, with Mary's guardian as trustee. With input from Mary, the money can be used for education, help with housing and whatever will assist her to get on her own feet in early adulthood. Once her material life is stable--and she and her guardian will decide this together--the trust will be turned over to a charitable fund, with close friends named as decision-makers.

I never considered my inheritance mine, so I don't consider it my daughter's either. It's a product of an out-of-kilter society where money can be endlessly accumulated. My wealth belongs in the arena where it can make society work better for all.

--Melinda P.

Meaning, Not Money

My daughter Janice, thirteen at the time, expressed great interest in art museums. When I told her at dinner one night she could be an art historian, she replied, "But how can I make any money doing that?" This is ridiculous--a girl with plenty of money whose friends are indoctrinating her that money is all that counts!

I see this played out over and over again, even among rich families--kids learning that a person's worth is measured by their income. Kids should have to exert themselves but not necessarily to earn money.

Every scheme I can think of that's legal for giving my kids money, they get it. Who else would handle the money better? I tell them "I'm leaving you all this money, now you make sure you do something really worthwhile for yourself, your family, and the world." I'm spending time teaching them how to do that--and letting them know that life is for something besides earning money.

--Michael W.

Can't Justify It

I think inherited wealth is ludicrous, but I haven't the moral courage to get rid of it all. I grew up knowing I would inherit but not knowing the amount. I wanted to be poor and hated the class system.

We haven't decided what to do about telling the children. It's not a secret, it's more like a mutual agreement not to talk about it. It may be hypocritical, but I think it's not good for kids to know too early. I'm dead against sharing charitable giving decisions with our 14- and 12-year olds. They don't need that guilt trip.

It's difficult. I want to do right by my girls, yet not give them a wealth consciousness--where they might feel the need to lie to friends or have problems making and keeping friends. I don't want them to decide never to work. So we've given Justine and Sara the impression they are no better off than their peers.

The girls' grandmother has money for them in a trust account. There's nothing we can do about that. When they're older, we would like to give the kids the option of inheriting from us or not. Currently our wills do leave them money, even though I can't justify it and I don't think it will do them any good.

--Peter J.

Why Wait?

I'm giving a good portion of my money away now. Why wait till I die? My four grown children already have $300,000 each from their grandfather's estate. When I was finally able to redeem some old stock from the family company a few years ago, I decided that my kids already had plenty and put the entire six million dollars into the family foundation. I felt great about it. I was acting congruently with my deepest spiritual beliefs.

The foundation has let me actually have fun with money in a way I haven't experienced since childhood. My wife and I involve the kids with the foundation, too, as much as they're interested. They're each so different I can hardly believe they were raised in the same family: one kid wants to ignore money, another kid wants to give it all away, one feels well-off enough, another wishes for more. I certainly can't expect my choices to please them all!

Maybe as we age my wife and I will change our views, but this is where we are for now. We give each kid about $20,000/year (out of income from a charitable remainder trust) and that's it. I was taught the traditional view that money should stay in the family, so sometimes I still feel a pull that I "ought" to leave them more. A while back one of my sons chided me, "What will your grandchildren think, with you giving so much away?" Well, I hope they'll think that I'm holding a broad view of money and taking their interests into account. I hope they'll see that because I love them, I'm investing in making a better world for them to inherit.

--Dennis K.


Why did I set up trusts for each of my children? Fear. Fear that they'd end up penniless and homeless. My son has had prolonged problems with addiction; my daughter always wants to give every penny away. Did I teach them about money when they were growing up? Not much. Why not? I didn't know anything about parenting! Did anyone in those days?

--Sally H.

X Marks the Spot

Amid all the serious debate about passing money on to our children, we hit upon an idea that puts a little fun back into the whole business. A while back we purchased $20,000 of gold in Austrian coins as an investment. Instead of leaving it in a vault somewhere, we had it sent to us and we've buried it on our land in a secret spot.

In our safety deposit box, along with a copy of our will is a "treasure map" in a sealed envelope addressed to our children. It's a fun way to pass on some of our resources outside the realm of lawyers and wills and still beat the relentless decay of inflation.


From the Gut, Not the Mind

My will directs the bulk of my assets to my son, Michael (currently fifteen years old). This makes no sense, really. He's competent and enthusiastic, and has learned a lot about making a living from his non-monied mom. But this decision comes from my guts, my "will," you might even say, not my intellect; he's my son, what's mine is his.

When Michael was young I started putting money into an account for him, not realizing it would automatically become his when he turned eighteen. I haven't told him about it yet, and I do worry that the money (now $400,000) might separate him from his peers and confuse him about work.

I know many organizations need extra money more than Michael does. I'm terribly concerned about the flow of events in this country, and wish I could to do something effective that expresses my political beliefs, principles, and hopes. But I feel profound disconnection just writing a check. I can't bear to do it anymore. No wonder my will directs it all to Michael--it will probably stay that way until I figure out what else sufficiently moves me.

--Conrad K.

A Foundation for Adulthood

It is poignant to watch one's children struggle. It's difficult not to rescue them, and not to become co-dependent. But we learned the hard way with my husband's children from his first marriage.

They were told to expect money all their lives, and it undermined their motivation; their peers are only interested in how thin they are and whether their golf skills are good enough. They haven't needed to take the challenging steps to develop themselves, so they have not done it.

We decided to do it differently with our children. We wanted them to learn that success and dignity in their lives would come not from expecting family money, but rather from paying attention each day to creating it for themselves.

When our son D.J. was sixteen and a novice carpenter, my husband and I bought him a run-down house across from the high school. The understanding between us was that D.J. would live there, sell it after graduation, and keep the profits as the sum total of his inheritance. Fixing up this house was a two-year, intensive, mother-and-son collaboration. D.J. made design and building decisions, honed his carpentry skills, learned roofing, plumbing and household accounting, and grew enormously from living on his own.

Young people don't just need money, they need experience, skills, the chance to make mistakes, and meaningful projects that are under their own control. D.J. gained a lot more from this undertaking than from being handed a trust fund--and so did I.

--Linda K.

Prepared and Proud

When I was around six I asked my father, "Are we millionaires?" and he said, "We're comfortable. The important thing is that we are good people. Having money isn't something to be ashamed of--there are wonderful things we can do with our money."

At twelve or thirteen I started sitting in on meetings at the family offices. It was explained to me what the family's investments were, and my parents took me to visit some of the companies we had investments in. When I was around fourteen, I received outright one hundred percent of my net worth--no strings attached. I guess my parents just assumed from day one that we were going to be responsible. They didn't think they needed to put the money in trust and make us jump through various hoops in order to get it. I felt very well prepared, and I was never ashamed of having wealth.

-- Henry Baldwin (From The Legacy of Inherited Wealth, Blouin, Gibson, and Kiersted, Trio Press, 1995). Adapted with permission. Available for $18 ppd. from the Inheritance Project, 3291 Deer Run Rd., Blacksburg, VA 24060.

Learning from the Heart

I was totally unprepared for what happened at the first estate-planning meeting I held with my wife and grown daughters. Rather matter-of-factly, I had viewed the meeting as an extension of my parental responsibility to expand my children's worldly knowledge--to give them hands-on experience with financial planning and with the legal, accounting, and investment advisors involved. For me, it wasn't much different from taking them to the ballet or Independence Hall when they were young.

In true consultant's fashion, I set up charts and graphs just as I would for clients, and dove into the intricacies of taxes and inheritance laws. Then my next-to-youngest, Mary Beth, tearfully burst out, "This isn't just actuarial data, Dad! You're talking about when you're going to die! I don't feel ready to deal with that!" The agenda changed abruptly.

We spent the next several hours talking from our hearts, confronting a topic that most families avoid. I felt overwhelmed hearing how much I'm loved now and will be missed. The meeting didn't change much what happened in the estate plan--our next session dealt with the numbers--but it brought communication among us to a much deeper level. Now, when I facilitate "family legacy meetings" for others, I have a good guess of what needs to be on the opening agenda!

--James J. Gallagher

For information about the Center for Family Legacy, contact Jim at 3636 Paradise Rd., Tiburon CA 94920.

Obfuscation Supreme

My first day of school the teacher asked each student, "What does your father do?" I didn't know, so I asked my mother. "Investments," she replied. When I told the teacher, she probed further. "Is he a stock broker?" I didn't know, so that evening I asked Mother.

"No, but he has a farm--tell them he's a farmer." That answer led to ridicule when the students discovered I didn't live on a farm and couldn't milk a cow. Mummy's next suggestion: "A banker--he did own one, or at least a controlling interest."

"Is he a teller or the bank manager?" the teacher inquired. I explained he didn't actually work at the bank. Finally the teacher called my mother and said that I seemed to have a problem telling the truth about my father's work.

Mother politely assured her that my father would clear up any misunderstanding. When at last I confronted Daddy with the big question, he said, "I clip coupons, Son." [ed. note: lingo for redeeming bonds.] The next day there was another call home from my teacher. Mummy got very cross with Daddy for that. From then on I envied kids whose fathers "did" something, especially dads who wore uniforms. Bus driving struck me as a particularly glamorous occupation.

--Robert H.

Daily Vitamins

No one would hand their children keys to a Porsche on their 16th birthday without prior driving lessons--yet in my work as an investment manager, I see people do the financial equivalent when it comes to passing on wealth from one generation to the next.

Children need "driving lessons" about money: relaxed, compassionate, skillful adults who sit right next to them, and say "be careful, this road requires some forethought" but leave the steering wheel in the children's hands. They need parents to teach about money consistently and early, revealing small amounts of information as the kids can receive it. The lighter the touch the better--like giving your child vitamins every morning rather than shots.

I'm trying to do this with my own kids. When Daniella and Seth were just old enough to scrawl their names gripping a pencil in their fists, I went with them to the local bank and helped them open up savings accounts. Every month we'd deposit more, and watch the interest grow.

A few years later I gave them each a small account in a growth mutual fund. Now we compare the two, watching the savings book grow slowly but steadily, and the growth fund rise faster but with more fluctuation. My intention is to make talk about money--earning, spending, saving, and giving--a fun part of daily family life.

--Suzanne P.

True to Myself

Just before I married, the family lawyer called me and my soon-to-be spouse into his office and told us it was time to write a will. He made me feel as if it were fairly routine--just fill in the blanks. Naturally, he suggested doing what my parents had done: passing all the assets I had inherited to my as-yet unborn children, with a few bequests tacked on at the end.

The whole process took about an hour. I signed the will, left the office, and sighed, "Thank heavens that's taken care of and I don't have to think about it any more." And I didn't for a long time. I was too busy finishing graduate school, starting a career, having babies, and figuring out the intricacies of marriage.

However, as time passed, I felt more and more burdened by my money. So I joined a money support group with others who had inherited wealth, and there my spouse and I talked about how wrong it felt to leave our children a super-abundance, when in our daily work we saw such crying needs. But the prospect of revising the will to reflect our true values seemed utterly overwhelming.

Finally, through counseling, Dave and I explored our differences: what money meant to us as children; how it had worked for good and ill in our families; what values our parents had passed on; what we wanted for our children and wanted to pass on to them.

I felt myself turn a corner. I was able to start thinking concretely about what I did and didn't want to leave my children. Still, fearful questions replayed in my mind: how can I love my children and not leave them everything? What if I die and leave them furious? Or worse, feeling as if I just didn't love them enough? How dare I live off my inheritance, let my children enjoy its bounty, and then deny it to them (for their own good, mind you!) As a way through this moral dilemma, we decided to figure out how much money would enable them each to continue the lifestyle they saw modeled by us. Dave and I have the luxury of working part-time at jobs we treasure, while our unearned income lets us enjoy nice vacations, lots of recreational activities, and visits to family members across the country. We calculated it would take leaving each child about $750,000.

That figure was a rude confrontation with reality. I wish we didn't spend so much. I hope one day we will live more simply, and feel freer and happier for it. If that day comes, we can amend our wills, but until then, it feels right not to employ a double standard for our children. Even after leaving them that much, we had eight million left over. Through work with our counselors, we came up with a giving plan we both felt proud of.

Overall, it took a year of monthly counseling sessions plus another six months working with a surprised but helpful estate lawyer, but we finally have a will and estate plan that reflects our true selves--not the final word, but a living document that we can revisit again and again as our lives and values change. .

--Janice K.

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