How Much Inheritance Is Too Much?

There is a mindset among many that those with wealthy parents have no need to study hard, as success will be simply handed to them. On the reverse side, financially-set parents have a fear that their children will become complacent and dependent upon them, so will not become beneficial citizens to society.

In early adulthood people forge a part of their identity that stays with them. Parents and grandparents worry that if that generation of descendants acquire a vast amount of wealth, it with quash their desire to work. There is no specific study on this subject, especially since it is not that sympathetic of a view point, but many financial consultants say that an inheritance is not necessarily a worth-ethic destroyer. In fact, most of them are not extravagant, with 85% coming in at less than $85,000 and the majority under $50,000. But for some, there may be a valid fear: A wealth-management consultancy called the Spectrem Group recently estimated that about 1.4 million American households have $5 million to $25 million to their name, and another 173,000 hold wealth in excess of $25 million.

The resonating quote from Warren Buffet provides some insight into the question of how much to give to children and grandchildren: “A very rich person should leave his kids enough to do anything but not enough to do nothing.” Some families, such as that of Scott Nash, the founder of the East Coast grocery chain Mom’s Organic Market, want their children to believe nothing is coming their way. He wants them to make their own way, and then provide for them to maintain a “good” lifestyle.

See Joe Pinsker, How Much Inheritance Is Too Much?, The Atlantic, October 25, 2019.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.