What if the greatest gift wealth-creating parents can give their children is actually not an inheritance?
That question came to mind after reading a recent Wall Street Journal article about R360, a peer-to-peer community for ultra-high-net-worth wealth creators, and a program they developed for young inheritors. The article, titled “The Exclusive Retreat Where Wealthy Kids Learn How Not to Blow an Inheritance,” highlights a challenge many affluent families wrestle with: how to ensure wealth becomes a blessing rather than a curse.
My work involves coaching wealth-creating parents on raising kids with character, strong work-ethic, and a sense of responsibility. I’ve witnessed situations where inherited wealth created dependency and conflict. I’ve also seen families use wealth thoughtfully to support meaningful lives, generosity, and social impact. I’ve had conversations with many about the idea of an inheritance and the pros and cons. I usually express some element of gratitude that I do not have the kind of money my clients have and so do not need to struggle with what to leave my kids (and WHETHER to do so!)
WHETHER to do so. Here is the hitch. When I tell people I’m not sure I’d leave my kids significant wealth if I had any to leave, they often become upset. They perceive my hypothetical choice as being selfish and stingy or not loving my kids. I explain how much value I have gotten from a blue-collar childhood and having to make my own way, work hard in school and create my own career opportunities including starting my consulting practice from scratch with no help at all. In these cases, I’m often perceived as bitter and unwilling to be generous with my own kids.
My wife, Monica, and I are on the same page. We have been generous with our kids in all kinds of ways. We’ve taken wonderful family vacations, financially supported their interests purchasing instruments and sports equipment, and paid for most of their college education. At the same time, we expected them to contribute. We wanted them to work, earn money, and experience the connection between effort and reward.
Like many young adults, they didn’t always appreciate those expectations in the moment. But once they were in college, they often expressed gratitude for having learned how to manage money they had worked for themselves.
What stood out to me in the WSJ article came from Chris Shonk, who explained that he and his wife plan to give their wealth away rather than leave it to their children. He says some R360 members think they are crazy. The couple’s philosophy is that if you parent well, your kids do not need a benefactor! Think about that. No inheritance as a GIFT, from parents who have the money to leave an inheritance if they wish to do so. I frequently tell parents I’m coaching, “Your job is not to make life as easy as possible for your children, it is to make it the right amount of challenging.” This is how kids grow, develop character, motivation and grit! The Shonks get it. I’m not advocating for no inheritances or for giving inheritances. I’m making the point that so many people (especially parents who can’t afford to give inheritances) feel like it is mandatory if you can do it. What can get lost is the benefit of having to find your way in the world and learn how to make money to get the things/experiences you want.
Plenty of wealthy parents, under the radar, raise awesome kids with inheritances and teach and develop them to handle it in a way that enhances their lives. We rarely hear about these folks, since they do not make for good headlines or television drama.
Ultimately, the inheritance question is about legacy.
If our goal is to raise capable, responsible, purposeful adults, then perhaps the most valuable thing we can leave our children is the character, resilience, and self-reliance that enable them to build meaningful lives—with or without our money.