According to U.S. Trust’s 2011 Insights on Wealth and Worth survey, a high percentage of high net worth parents don’t consider it a high priority to leave a financial inheritance to their children. The survey was completed by approximately 450 Americans with at least $3 million in investable assets. Only 49% of these individuals responded that leaving a financial inheritance “is personally important.”
This feeling is echoed by more than a few people with high profiles. For example, Warren Buffet, currently ranked as the third wealthiest person in the world, has pledged 99 percent of his estate to charity rather than leaving his billions to his three children. And action star Jackie Chan recently announced that he won’t leave anything to his son, singer Jaycee Chan. Instead, his entire estate will be donated to charity.
Why are parents shying away from leaving windfalls to their children? The U.S. Trust survey participants cited a variety of reasons, including concerns that the promise of inherited wealth would cause their children to become lazy, feelings that their children are not mature enough to handle wealth, and fears that their kids would make poor financial decisions.
So, do you plan to leave your children a substantial inheritance? If so, your estate planning attorney can help you make a plan for preparing your kids for their inheritances as well as for protecting those inheritances after you’re gone. On the other hand, if you plan to follow in the footsteps of Warren Buffet and Jackie Chan, your estate planning attorney can help you ensure that your estate makes its way into the hands of your preferred charities, while minimizing the risk of lawsuits and other challenges.