The headline is provocative: "Why I Am Giving My Children Their Inheritance Now." The NYTimes story was told in the first person by a man who said of his financial standing, "I know what wealthy is. And I know my wife and I are not." Nonetheless Paul Brown, an occasional columnist for the NYTimes and the author of best-selling business books, clearly has a comfortable amount of disposable income and not many major expenses ahead of him--he has finished financing his children's college education.
That is why, he writes, he and his wife decided to begin to give each of their four children part of their inheritance now. Now, as in while their children are still setting themselves up in life as opposed to later when Brown and his wife are no longer around and the children are set up--living their lives with presumably there own reservoirs of disposable income.
Turns out the headline is a tad more provocative than what Brown is doing. Many of us give our grown children financial gifts in the here and now--or "loans" that we do not expect them to repay. Most of us do it on an ad hoc basis. Brown is more organized. He gives each of his children an annual check. He reports that the money is used by each of his kids in different--albeit responsible--ways: to buy a house, to fund a college account for a newborn, to start a business, to boost a savings account.
He seems to be saying what paterfamilias and I have long believed: If we are fortunate enough to have raised children who don't feel entitled --as Brown says his children do not--and who don't have wild or crazy spending habits, then why not share the wealth now when they need it. It's all well and good to believe they should be independent and stand on their own two feet. But how pleasurable it is to help them out.
Here are three reasons Brown gives for giving himself that pleasure:
They are going to get the money anyway, in the form of an inheritance.
Who wants them waiting around for you to...... Brown spells it out this way: "Why, as a parent, would you want your children — even if it is on some tiny, tiny, tiny subconscious level — waiting around for you to die, so they can inherit money they could use now?"
Brown also notes that he and his wife have prepared the best they can for the future, saving money for retirement and carrying good health insurance. They are giving their children money that is expendable. It brings to mind a post I wrote about a question Carl Richards (the "Sketch Guy" financial adviser who also writes for the NYTimes) raises about money: How much is enough? When we can answer that query we may want to share the excess with those we love.
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