| Avoiding
'sudden wealth syndrome' | | |
| Why not
leave a bundle?
So what's wrong with leaving the kids a whopping inheritance?
Don't we all want our kids to enjoy life and be financially independent?
Well, sure. But dropping a boxcar of unrestricted
cash on your offspring can be like inviting Courtney Love to your cookout: Somebody's
probably going to wind up in the pool. On fire. How and to
whom you leave your wealth can shake your family tree to its roots. "The
biggest fear that parents have is that if the children know the money is coming,
they will have no motivation," says O'Neill. "The symptoms of affluenza
are the inability to delay gratification, loss of future motivation and a false
sense of entitlement." Psychologists warn that too large
an inheritance may undermine a child's self-confidence, while too miserly an amount
can fuel feelings of abandonment and resentment. Family dynamics further come
into play when one or both parents are overachieving A-types who expect the kids
to fill their oversized shoes. U.S. financier Warren Buffett
once characterized the optimal inheritance as "enough money so that they
would feel they could do anything, but not so much that they could do nothing."
Buffett claims he plans to leave most of his multibillion-dollar fortune to charity
and comparatively small amounts to his three heirs. Financial
adviser Stephen Pollan takes it a step further: He urges people to spend every
last dime, and die broke, that's the name of his best-selling book, rather than
continue this relatively recent phenomenon of sloth-encouraging trust-fund babies. Eileen
and Jon Gallo, authors of "The
Financially Intelligent Parent," say money is not the root of this particular
evil. "It isn't money that causes problems, it's money
unaccompanied by values." Leave
strings attached
The Gallos -- she's a Beverly Hills
psychotherapist who specializes in "sudden wealth" syndrome, he's an
estate-planning attorney -- admit they learned the hard way how not to motivate
their kids. "We actually admit we paid for grades
and it didn't work," says Eileen. "It externalizes the motivation. Our
14-year-old son would sleep through first period and, from all the absences and
tardies, it was pretty clear he rejected the offer." Jon
finally came up with a solution that charged their young slacker. "I
said, 'Look, I'm going to love you whether you end up pumping gas for the rest
of your life.' He told me subsequently that he was so startled that he might have
to spend the rest of his life pumping gas that he now has two masters and a doctorate
degree," he says. "Parents have to guard against
trying to set up a bribery system to make the kids into miniature versions of
themselves. Bribery is not a particularly good child-raising philosophy." That
said, there are ways to leave a few strings attached to a healthy inheritance
to make sure the wealth you leave acts like fertilizer, instead of gasoline. Incentive
trusts can be used successfully to encourage such things as education. They typically
tie the release of certain portions of the inheritance to certain life milestones,
such as steady employment or advanced degrees. | 
