A collection of insightful and informative articles from Myerson Wealth's “Recipes for Success” newsletter
“The most remarkable thing about my mother is that for thirty years she served the family nothing but leftovers. The original meal has never been found.”
-Calvin Trillin, American writer and journalist
One of the many enjoyable by-products of hosting a full-scale dinner party is receiving the phone call that invariably comes from one or both of our kids the following day. Attempting to hide their ulterior motives, they innocently suggest that they’re not doing anything that evening, and that it would be nice to come by to see their Mom and me. And of course, “Oh, how was your dinner party last night?” is always thrown into the conversation.
For those of you who think I’m making this up, this is exactly what transpired just before I sat down to write this piece. My son called, knowing fully well I had prepared a six course “New Year’s Celebration” dinner the night before, and suggested he come by the house for leftovers. A typical dinner party can produce quite a few leftover meals, which, for our “starving actor” son is the gift that keeps on giving.
While providing my family with leftovers is a rewarding experience, sharing “leftovers” of one’s wealth with one’s children and other family members is a very different story. Even though this should be one of the greatest pleasures in life, the opportunity can often be far from gratifying.
Part 1 of this blog series will explore the basic and various philosophies of sharing large sums of wealth inter-generationally.
Some people are born into wealth, while others accumulate their assets over the course of a lifetime. Most of us start out with the mindset of creating security for ourselves and our families. This approach can generate substantial wealth, driven by many forces including passion, ambition, greed, fear, and ego. In the end, if we’re financially lucky, we end up with significantly more than we could possibly spend during our lifetimes. Next comes the multi-million dollar question… what do we do with it?
“I’m giving it all to charity! I started with nothing, and I’m not turning my kids or grandkids into bums by leaving them the money!”
“I want my kids to have enough, but not so much such that they’re dis-incentivized to be productive members of society.”
“I want everything to go to a trust for my kids, with nothing to the government. However, I want to make sure my kids and grandkids only get assets from the trust when they’re much older, and then only if they’re productive and stay out of trouble.”
“I built this wealth to pass on to my heirs. This is my legacy! If my kids and grandkids mess it up, then it’s my fault I did not instill in them the values to manage that responsibility.”
I’ve heard every one of these statements, and many, many more. I have a strong personal bias as to which one of the above attitudes I favor, only marginally influenced by my professional practice. That being said, I totally understand the potential origins of each of these respective statements, and for every family the final solution is different. If asked, I will work to help my client arrive at the answer that is appropriate for their family’s situation. This process often involves deep and personal discussions that are probably better suited to a family therapist. And in the end, it is often a gut-wrenching decision.
Great wealth is like a great meal; the leftovers can provide considerable pleasure to those who share in them, but be distasteful if not properly warmed-over.
This is just the appetizer on this topic. We’ll get into the entrée with the next installment.
Next: Leftovers, Part 2: Preparing for Inter-Generational Wealth Transfer
Eat well, drink well, and live well!