For everyone who dreams that an inherited windfall would make their lives easier, there are plenty of inheritors who say otherwise. Chuck Collins, great-grandson of packaged-meat magnate Oscar Mayer, is one of them.
Collins says that when he found out he would inherit a small fortune at the age of 21, his sense of self-worth was knocked a little off-kilter because he always expected to earn his own way. “I remember feeling a little bit of dread,” he adds.
When young inheritors discover they may never have to work for a living, it alters their values as well as their position within their social network of peers, who are busy building careers. “Kids tend not to do well when they come into an inheritance at 21,” says Madeline Levine, psychologist in Marin County Calif., and author of “The Price of Privilege” and “Teach Your Children Well.”
Levine says that for many young adults, an inheritance is a burden.
Giving it all away
Collins says he felt the money would separate him from his goals and his friends. So by the time he had full custody of the inheritance, in his mid-20s, he made a somewhat drastic decision to give all the money to charity. He donated it to a variety of community foundations. “I didn’t do this immediately,” he says. “I had about five years to think about it.”
Nearly 30 years later, Collins doesn’t regret his decision. “I felt like I was doing it from a healthy place,” he says. “I didn’t want to be seen as a bag of money just because I was born into certain circumstances.” Today, Collins earns his living as an author and expert on economic inequality and taxation. In 2008, he co-founded Wealth for the Common Good, a network of business leaders and wealthy individuals promoting fair and adequate taxation.
“My advice to inheritors is to pause, take a breath and think about what kind of values you want to live by,” Collins says. “All around you, people will want you to hold onto the money; there’s an entire industry devoted to wealth preservation.” He encourages inheritors to figure out how much they need in order to invest in skills to earn a living and then consider giving the rest away.
Fear of being without will be a challenge that will lead many young people to hold onto the money as a safeguard, but Collins advises giving in to the impulse to be generous. “Trust yourself to share,” he says.
He also suggests gaining perspective by examining the relationship between consumerism and happiness. “Look at role models of happy people and look at how much materialism is necessary,” he says. More money doesn’t increase happiness, he adds.
Read more on overcoming the challenges of inherited wealth.
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