Should children get an inheritance?

Mike (No)

Children, young or grown, who aren't given an inheritance instead have the opportunity to establish a good work ethic, self-sufficiency, and a healthy relationship with money on their own. If there is nothing to fall back on, children will likely be more careful with their money and investments than they otherwise would be with an inherited financial safety net. 

Research shows that most inheritances won’t even see a second or third generation, as “one in three Americans who receive an inheritance blows it within two years and most inheritors have negative savings later on,' mostly due to poor spending habits. This is likely because those with inheritances could develop a flippant or entitled relationship to money, as there is little concept of value.

Most Americans won't ever see an inheritance, as only 'between 70% and 80% of households receive no inheritance at all.” It is even difficult to calculate inheritance percentages within the country because, as many studies note, their numbers are only estimations, as data points are inflated by the inheritances of only the upper 1%. This further inflates socioeconomic inequality, leading to a further divide between America’s economic classes. 

Giving your children an inheritance comes with an extreme amount of risk as well. As of 2024, “58% of inheritance respondents have experienced family disputes,” leading to estranged families or later on. The value of an inheritance can change on a whim, given the market's volatility. 

Instead of giving your child an inheritance, consider using your wealth for philanthropy and supporting charities that contribute to society's well-being. If you raise your child to develop their own strengths and skills, they are already ahead of the game and are likely to succeed on their own without having to contend with an inheritance. 

Emily (Yes)

Parents have embraced the tradition of leaving an inheritance since the Hammurabi Code in 1750 BC. This act isn’t just about financial security, but also emotional connection. It's a way for parents to continue supporting their children even after passing, giving them peace of mind and a sense of continued care. Investopedia points out that 'leaving an inheritance to your children can help them through life, ease their financial burden, and represent your love and care.”

With the rising prices of education, housing, food, personal care, childcare, etc., people may not be able to afford these costs alone without this form of financial support. Inheritance can even help maintain and continue a family’s legacy. For example, the extra economic boost from inheritance can help grow a family’s generational wealth by allowing the recipient to build a business.

Additionally, there is a safe way to set up how the recipients receive their inheritance. For example, if a parent is concerned their kids may not be financially responsible, they can elect to set up a trust where funds are distributed over time instead of in one lump sum. This ensures the assets will be used wisely after they’re gone.

Furthermore, leaving an inheritance can inspire future generations to be generous. For example, having extra funds might allow recipients to donate to a cause they couldn’t have before without it. Or a ripple effect can occur. That child may choose to leave behind an inheritance for their children when the time comes because they witnessed firsthand how much their parent’s monetary gift helped them, thus continuing this old tradition.