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For some folks, it would make sense to set up a trust that would avoid or mitigate the burden of estate taxes. This would not only leave their offspring more money but would allow them to set it up to pay the kids an annuity so they can't just blow the whole thing on having, y'know, Aerosmith play their 30th birthday ;-)

Another point I'd make--it's implied in the article but I wanted to make it explicit--is that kids need to learn "the value of money" (as my parents would have said) before they inherit or otherwise acquire it. My parents gave me a small allowance when I was a kid but I was expected to do a lot of chores around the apartment and later they more or less forced me to get a paying summer job between academic years.

By the time I left home and college for good in 1981 to join the workforce, I had a pretty good idea of the value of money...and I always made sure my parents knew I had no "expectations" from them, as Mr. Dickens would have put it. It actually became a private joke between us--any time my parents went on a trip, or went out for a lavish meal, or the opera or whatever, they'd jokingly say, "We're spending your inheritance, my boy!" And I laughed right along with them! :-)

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A trust can absolutely be a good idea and if you're really wealthy enough to get loans at very favorable rates, there are really good ways to maximize the amount your kids get and minimize the amount the government gets after you die.

Also yes, hopefully your kids do understand the value the money to get the value out of your inheritance. When you're young in particular, driving a beater and putting 50k in an index fund for 20 years will set you up for success a lot better than buying a new truck for 50k -- and same on the expectations. I have always told my parents do whatever they want with their money because it's their money.

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Replying to both comments- right on, brothers! This is the kind of rational analysis needed, not simplistic "feelz." Like John, I have always- since I was 20- told my parents to spend their money; I would make no claim on it. I have stuck to that concept. Yet over time, I have done a lot for them, esp getting them moved to senior housing, doing financial and medical planning, and a lot of labor readying their properties for sale. Now that they are in their 90's, I hate to see them not give any Federally income tax sheltered money to us kids. Plus dealing with some age related memory and cognitive issues. As David said, I did work hard and I know the value of money. I have bought only one $15K new car in my life, I do all the repairs on our "beaters." Thanks for posting this essay, John.

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Great post. Boomer here: I've been warning my adult children for about 5 years now that the check for my funeral will probably bounce, warning them not to plan for nor expect any inheritance. Much of that is because I'm being generous with them NOW, while I'm around to have some say in where my earnings and investments go. You'll find many other boomers taking the same approach. After all, some of us are helping our aging parents with their needs, from whom we've never expected a financial inheritance.

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I think it's actually better to be generous with them now because the younger they are, they more likely the help you give them will have a big impact. There's a world of difference between most people's financial situation at 25 and 55.

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Replying to both comments, again, sorry, but it's such good advice! Say you do ultimately get a decent chunk of money via inheritance at age 75. Big deal, more for the senior care center, you'll most likely to be too old to have much fun with it...

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Exactly.

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