Like most other advisers, I’ve had many clients over the years ask themselves how much they should leave their children. Often they arrive at “the number” and then design the rest of the plan to lose a bit of the excess to taxes and give away the balance through charitable contributions. This, of course, can be an entirely reasonable approach, but in my experience the notion that there is a “right number” is itself misleading and perhaps even the wrong question. I have found that using this as a starting point is the root of some very fuzzy thinking and a source of very real strategic planning blunders. In my work with clients over the years, I have often questioned the multiple assumptions that the client is making in asking this question as the fulcrum for addressing deeper concerns. After asking a series of questions designed to help the client think through why they want to approach their concerns in this way, I have invited clients to consider the possibility that the way they are framing the problem actually deprives their children of important opportunities to learn and grow into the full range of their own developmental possibilities. It also virtually ensures that what could be a vibrant and vital legacy for generations will almost certainly disappear very, very quickly. Rather than clients asking “What amount should I leave to my children?”, I have encouraged clients to consider the question “How do I engage my children while I am alive to ensure that they have the competencies or compensatory structures to wisely deal with whatever I leave them in whatever form?” I have found that this larger set of questions often sparks client’s imaginations and opens vast new possibilities for families to come together around wealth in new ways.
Questions:
- What do you advise clients in the “How much is enough?” conversation?
- In what ways does this seem like the right question and in what ways does it seem too small for the complexity of what you, as an advisor, see? How do you address that?