How much is too much? That’s a question many parents ask as they structure lifetime gifts and bequests to children in their financial and estate plans. Wealthy clients are sometimes concerned that leaving millions of dollars, or even hundreds of thousands, to their children could backfire and hinder their kids’ ability and motivation to achieve financial independence. They worry their children will miss out on the satisfaction of knowing they built wealth on their own.
These parents believe that the challenges and struggles along the way will ultimately enrich their children’s lives with intangible benefits that are far greater than the obvious benefits that come with gifts or an inheritance of significant financial resources.
As you work with clients who feel this way, please reach out to our team. Every day, we work with families who are in this exact situation. We’ll help you evaluate strategies such as:
- Establishing philanthropic components of an estate plan so that children receive only the amount that can pass to them free of estate tax, with the rest passing to a nonprofit, such as a Donor Advised Fund.
- Setting up a Donor Advised Fund to allow your clients to support favorite causes during their lifetimes, with the terms of the Donor Advised Fund providing that the children step in as successor advisors following the clients’ deaths.
- As successor advisors to the Donor Advised Fund, the children can work with us to recommend grants to nonprofits, support interest areas pre-selected by their parents, or both.
Many clients are attracted to this type of structure because not only could it avoid estate tax, but it also allows their children to stay involved with the family’s wealth, work together and keep sibling bonds strong, and get involved in the community. Please reach out to our team anytime. We look forward to exploring strategies to help your clients and their families meet financial and charitable goals.