Many Wealthy Parents Choose Charities Over Children

Some estate planners have seen an increase in the number of wealthy clients leaving their money to charities as opposed to their children. A recent U.S. Trust study of 457 wealth individuals found that less than 50% of wealthly parents across the nation believe it is important to leave their fortunes to their children. Those surveyed stated they would rather focus on relationships or travel than leaving money to their children.

When asked why they were reluctant to leave their children an inheritance, 20% of those surveyed thought their children would waste any inheritance, 20% believed their children would not make wise financial decisions, 13% feared outsiders would take advantage of their children, 34% felt their children would be unable to handle an inheritance, and 24% feared that an inheritance would cause their children to become lazy.

Estate planners have also witnessed an increase in the number of clients leaving inheritances to their grandchildren, skipping their children all together. Additionally, the number of clients leaving assets to in-laws has decreased significantly over the years.

See Caren Chesler, Tough Love, Private Wealth (July 2011).

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.