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How much to leave your kids

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He Who Shall Be Unnamed
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8:17a, 10/14/24
I'm sure it has been discussed here before, but...
Assuming you have enough to leave at least $1 million or so to each kid, and...
assuming your kids are not idiots (to the best of your knowledge at this point in their lives), or are disabled, unlikely to be able to support themselves, and...
you're not Warren Buffet or Bill Gates,
how much would you leave them in today's dollars?
I am a few years from retiring and really trying to put together some models for what I would want to withdraw monthly/yearly, how much I would want to give away, and then how much I think would be ideal to leave behind to your kid(s).
And, yes, I have listened to Bill Perkins (but haven't read his book).
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MRB10
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8:37a, 10/14/24
AG
We're leaning towards $500k for each kid and putting the rest in a trust that can only be used for grand kids/great grand kids college expenses. I'd rather our sweat equity ensure our descendants, 2-4 generations out, have access to a high quality education vs my kids potentially blowing it on risky investments or buying "stuff" they don't need.

We still have 20 years until hanging it up is a reality so my plans may change depending on the amount that we have at retirement.
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infinity ag
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8:57a, 10/14/24
In 2016, I had created 2 accounts (in my name) one for each of my 2 children. The value has grown to about $600k each.

In addition when my son got into a top-5 school for computer science a few years ago, we gifted him $25k and I put that in an account in his name and invested it. It is now about $70k (with a few small additions along the way).
I will do the same for my daughter when she goes to college.

Recently we realized that it was not wise to gift away such large sums of money to children in their 20s. It kills the hunger for success if money is so easy to acquire. We paid for all their education so that they leave college debt free. That should be enough financial help. I told my son that if he gets into a school like Stanford or MIT or Caltech for a Masters degree, I will pay for it.

The 2 accounts were in my name anyway, so I re-purposed it. I plan to move to CA in a year or so and buy a house there, so I will use it towards that.

When we are gone, everything will be split up among the two children.

Keep in mind that you do not transfer everything to the kids before you or your spouse dies. Make them the beneficiaries but keep assets in your name as you get older.
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BenTheGoodAg
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9:04a, 10/14/24
AG
My goal with my kids is to put them in a position where they can be more successful than I ever was through teaching them a combination of self-sufficiency, gratitude, and overall ways to think about finances

If I can successfully instill those values, an inheritance is a blessing and not a curse. Our most basic goals for retirement are to not be a burden on anyone. Beyond that, I would be really happy to bless my kids and grandkids for generations to come with as much money as I can.

We have goals to give away money now, more later as our net worth grows, some more when we pass, but our kids & grandkids are our primary benefactors in our estate planning.
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permabull
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10:10a, 10/14/24
AG
Zero, hope my last check bounces.

I believe generational wealth is created by education, teaching them early on about the importance of saving and investing and not taking on unnecessary debt so compounding interest can work for you not against you.

I hope my children will be retired and financially independent before I die so they shouldn't need any more from me other that what I already gave them.
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Tex117
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10:38a, 10/14/24
AG
Depending on alot of factors, Im leaning towards setting up something like a trust for generations education.
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rononeill
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10:48a, 10/14/24
I want to leave as much for mine as we can, after mrs rononeill and i have done all the things we wanted to. like it or not, the country is turning into 2 different populations - those with enough and those without enough. those with enough are going to grow that exponentially - further widening the gap with the other group. to set them up to stay on the high side of that gap is important to me. i believe the differences in quality of life on either sides of that gap may one day be as basic as being able to afford healthy food, access to good health care, live in a safe area, have a choice of good schools, afford vacations you want to go on - maybe it wont be this generation or the next, but i can see that coming one day and I want to do everything i can to give our descendants any advantage they can get.
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94chem
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11:02a, 10/14/24
I have 4 teenagers. I'll take $50,000 right now.
94chem,
That, sir, was the greatest post in the history of TexAgs. I salute you. -- Dough
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Troglodyte
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11:22a, 10/14/24
AG
Goal #1 is to not be a burden on my kids.

One of the problems with planning on leaving money to your kids when you pass is that if you live a long time, they would be getting the money later in their life. If you die at 80, your kids are likely around 50 and hopefully established at that point.

I would really like to help my kids while they are young adults by helping them start a business or down payment for a house. Then, I would start a 529 for my grandkids.
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one safe place
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12:22p, 10/14/24
My plan is to manage what I have as best I can and live the life I have left in the manner I choose. I will hope my wife does the same after I am gone (assuming I go first). The kids get what is left.
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evestor1
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12:45p, 10/14/24
assuming my children do not become liberals or decide to participate in lifestyles i disagree with ... i would leave my kids every thing i have. whether it be 1mm or 100mm


and yes - i am serious. i will not give a dollar to anyone that has mega-different ideals than me.

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El Chupacabra
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In reply to evestor1 • 1:26p, 10/14/24
evestor1 said:
assuming my children do not become liberals or decide to participate in lifestyles i disagree with ... i would leave my kids every thing i have. whether it be 1mm or 100mm


and yes - i am serious. i will not give a dollar to anyone that has mega-different ideals than me.

we could be friends.
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TXAGGIES
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1:42p, 10/14/24
my goal would be to retire early and spend what I can, if I spend it all they get the house would should be a nice nest egg.
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He Who Shall Be Unnamed
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2:01p, 10/14/24
I appreciate all of the responses so far, it is definitely interested in seeing what others think of leaving money to the next generation.
For those who brought up education, I would absolutely agree as to what a gift it can be to fund children and grandchildren in their academic pursuits, especially as the costs of education continue to outpace inflation. I had forgotten that my mother-in-law had asked me to give her a SSN as soon as my son got one, and that she had funded a small 529 but invested it aggressively. "Found" money nearly 18 years later that's obviously used for a great cause. I plan to 100% do this if and when I have grandchildren.
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harge57
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2:34p, 10/14/24
AG
Has anyone ever thought of an income enhancement situation?

This has mostly been an if I won the lottery thought exercise, but I have thought about for nieces and nephews some sort of arrangement where they submit their taxable income to a trust every year and that gets doubled up to a certain point that is sustainable.
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I bleed maroon
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In reply to harge57 • 2:49p, 10/14/24
AG
harge57 said:
Has anyone ever thought of an income enhancement situation?

This has mostly been an if I won the lottery thought exercise, but I have thought about for nieces and nephews some sort of arrangement where they submit their taxable income to a trust every year and that gets doubled up to a certain point that is sustainable.
I've always liked the idea of that kind of approach. The other one I like is incentivizing paying off credit cards in full every month. Once they run a balance, it's easy to fall into the rut of perpetual high-interest debt.
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Ogre09
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4:08p, 10/14/24
AG
While I'm still living I plan to only give them financially whatever I launch them into life with. Probably a free car, paid for college degree(s), and all expenses paid until they get a real job. Then they're on their own.


Then they'll also get whatever house/houses and land I own when I kick the bucket.


I plan to retire early and live off my retirement account for a long time. So that means drawing from the growth of the investments while also slowly growing the principal to ensure the draws can grow with inflation. If you know you only have 10 years left you can start eating up the principal. But what happens if that 10 turns into 15 or 20? I'll try to pace it as I go, and that probably means having a significant lump sum in there still when I keel over and that will go to them as well.


Or if I do make it to 115 I'll probably run out of money before that. If so, hopefully my kids or grandkids or great grandkids will keep an old man from begging on the streets.
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Ogre09
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In reply to harge57 • 4:11p, 10/14/24
AG
harge57 said:
Has anyone ever thought of an income enhancement situation?

This has mostly been an if I won the lottery thought exercise, but I have thought about for nieces and nephews some sort of arrangement where they submit their taxable income to a trust every year and that gets doubled up to a certain point that is sustainable.

I've had this idea before. Like you it was a lottery idea. The trouble with that is making sure the income is legitimate and doesn't get faked. But it opens up the opportunity to pursue a passion that may not pay as well.
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ac04
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4:15p, 10/14/24
everything i have left. not planning to deprive myself of anything along the way, but if things go according to plan i'll be able to leave them a huge stack to deploy as they see fit. confident they'll make good decisions.
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AgOutsideAustin
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4:38p, 10/14/24
AG
I'm retiring in the near future and we are going to have fun and go places I never thought I'd be able to go because I earned it and saved it.

The two kids get whatever is left, no number in mind.
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Milwaukees Best Light
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5:03p, 10/14/24
AG
Fonzie is pushing reverse mortgages. Must be a good plan, Aaaaaaaayyyyyy.
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Quinn
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5:23p, 10/14/24
AG
Assuming that I had the amount of $ that the OP says, I would

- buy them a car going into college
- pay for college
- pay for a wedding
- help with a down payment for a house

Like someone said, hopefully you are living into your 80s, so do you really want to wait until your kids are 55 to pass down money to them?
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AgOutsideAustin
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In reply to Quinn • 5:30p, 10/14/24
AG
Quinn said:
Assuming that I had the amount of $ that the OP says, I would

- buy them a car going into college
- pay for college
- pay for a wedding
- help with a down payment for a house

Like someone said, hopefully you are living into your 80s, so do you really want to wait until your kids are 55 to pass down money to them?



This is part of our plan as well, to help them some while they can use it and we get the benefit of seeing it go to good use.

Also we plan on really getting rid of a lot of our **** so when our day finally comes it's not an episode of hoarders trying to clear **** out they don't want.
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chrisfield
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5:38p, 10/14/24
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AG
Some great thoughts on here, and I must admit I've thought about this far too much for someone in his early 40's. A smattering of my thoughts:

As others have mentioned, I have little interest in handing my kids a big chunk of change if/when I die at 80 and they are between 45-55. At that point they've likely already done much of what would have been needed to be done to be successful (or not) anyways.

Absolutely in on teaching them about money, finances, and generosity from a young age. They are part of our charitable giving already even at a young age.

I'll pay for their college and some variation of a decent car that will last them the first few years after college.

Assuming they work hard and are diligent, I'll help them with a down payment on a house. Ideally with the stipulation that instead of paying me back they put that same amount of money into the stock market over the next 5 years or something.

I would like to leave a sizable trust for future offspring college funds.
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DannyDuberstein
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6:44p, 10/14/24
AG
Goal 1 is not to burden them

Goal 2 is be in position to help with a down payment on their first home. The housing market went nutso. Before I do it, they'll need to demonstrate good financial sense, reasonable savings of their own toward the down payment, and a clear plan to manage the mortgage. But I want to be able to help them with their start

I'd like to leave them $$$ that could help with their retirement, but I don't have a number and if I spend my last $1 as I die at 110, so be it. That said, ensuring Goal 1 happens likely means I'll leave them a decent chunk
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bagger05
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8:32p, 10/14/24
AG
I don't have kids but have told my parents I don't have any expectation that they leave me anything. Every once in a while I hear them fretting about our inheritance and I remind them that it is THEIR hard earned money and it's none of my business what they do with it.

They've given me plenty over the years.
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RenoAg
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10:40p, 10/14/24
Do your givin while you're livin, so you're knowin where it's goin.
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rononeill
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6:30a, 10/15/24
My Czech grandmother told us: it's better to give with warm hard than cold hands.
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OldArmyCT
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6:54a, 10/15/24
AG
If you exceed the gifting limits when you're alive you pay the tax so use a professional to work around that is my advice. My other advice is to assess your kids financial acumen. If one has a dumbass spouse or one just plain overspends, find yourself an FA who is very good at keeping clients in line and let him/her distribute IAW your wishes. Or set up a trust they will have trouble breaking.
Most important IMO is to keep the bulk of it in your name, you have no idea what health issues you'll encounter later and how much that may cost. Home health is extremely expensive, nursing homes aren't cheap. And if you think Medicare supplements are expensive now, just wait.
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He Who Shall Be Unnamed
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In reply to OldArmyCT • 7:58a, 10/15/24
OldArmyCT said:
If you exceed the gifting limits when you're alive you pay the tax so use a professional to work around that is my advice. My other advice is to assess your kids financial acumen. If one has a dumbass spouse or one just plain overspends, find yourself an FA who is very good at keeping clients in line and let him/her distribute IAW your wishes. Or set up a trust they will have trouble breaking.
Most important IMO is to keep the bulk of it in your name, you have no idea what health issues you'll encounter later and how much that may cost. Home health is extremely expensive, nursing homes aren't cheap. And if you think Medicare supplements are expensive now, just wait.
I think this is an excellent point, which argues against giving out all of or a lot of your money earlier in life. I know we won't be taking expensive trips, etc., in our advanced years, but the cost of care in order to not be a burden on your children, financial or other, can be significant.
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Quinn
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In reply to Quinn • 8:07a, 10/15/24
AG
Also, 529 gifts for grandkids on birthdays and Christmas are very much appreciated, so that's one way to help two generations and make sure that money isn't spent frivolously.
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beerad12man
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8:25a, 10/15/24
AG
Goal 1 is to not be a burden like others have said.

At minimum, I would leave behind the house and any other assets (I might have vehicles, travel trailer, boat. But none are guarantees).

I'm pretty conservative, so ideally, I will not be blowing through much if any of my principal. Maybe the last few years I'd go through some, but it all depends on how investments go during the first 10, 20 years of retirement, etc.

Sure, by the time I hope to pass away, you are looking at 45-55 and by that time, a person could / should have built up their own wealth. But a decent, sizeable chunk of change from a house and or principal is still a major boost to even the most financially responsible people. That final chunk can be the difference in paying off a home 10 years early, or retiring 5-10 years earlier and them getting to spend more time with their kids/grandchildren.
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MAS444
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8:39a, 10/15/24
AG
I'm 51 and "how much to leave my kids" is not something I plan for at all other than as an indirect benefit of having plenty in retirement ourselves.
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OldArmyCT
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2:14p, 10/15/24
AG
I'm 77 and couldn't blow thru my funds no matter what dumb things I did but here's what I've done for my kids:
-Ensured the beneficiary and Payable on Demand accounts are up to date. Maybe no probate costs.
-Left them a piece of paper telling them where to find passwords and who to call.
-Told them to put everything they get from me into a separate funds account so their spouses can't access it no matter what.
-My spouse died and I'm in a house with a girl. We're not married. It's paid for and has a split deed, we even get 50% tax bills from the county. Both wills state the last one living can stay as long as they want, once they leave the house will be sold by the executor of the last to die, with proceeds split 2 ways. On the appraisal district website it even says "50% ownership."
-I told my kids they have to go thru my FA and since they are financial nincompoops I told them they should keep him. I may outlive him though, he's 65 I think, claims to want to work 10 more years.
-And I spend what I want but have no desire for anything way out of line. I wrote a check for my RX-350 but my trade-in covered half of the cost, and I flew business class to Europe last week but the stock market made up for that. In one day.
-Finally my income + RMD's will cover any local rest home should I need one.
Save enough when you're working and money for your kids will be your last worry.
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bam02
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In reply to MAS444 • 6:53a, 10/16/24
AG
MAS444 said:
I'm 51 and "how much to leave my kids" is not something I plan for at all other than as an indirect benefit of having plenty in retirement ourselves.


Same philosophy. I'm just not on track to have millions in excess of what my wife and I will likely need in retirement. If we do then great.
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