Friday, August 22, 2014
Many wealthy families have concerns about spoiling their children by passing on a large inheritance to them. A study by two University of Michigan economists reveals that increased income, but not increased net worth, increases happiness. Thus, the trick seems to be figuring how to pass on unearned wealth without leaving children unmotivated to continue earning additional income for themselves. This could be done by having an open dialogue with children to make sure they understand where the family wealth came from and how it was earned, or by delaying the inheritance transfer until a certain date.
See Thane Stenner, Three Ways to Pass Your Wealth to Your Children Without Spoiling Them, The Globe and Mail, Aug. 22, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.