How much is too much? That’s a question many parents ask as they structure lifetime gifts and bequests to children in their financial and estate plans. Wealthy clients are sometimes concerned that leaving millions of dollars, or even hundreds of thousands, to their children could backfire and hinder their kids’ ability and motivation to achieve financial independence. 

In addition to concerns about fostering entitlement and dependency, many parents are concerned that their children will miss out on the satisfaction of knowing they built wealth on their own. These parents believe that the challenges and struggles along the way will ultimately enrich their children’s lives with intangible benefits that are far greater than the obvious benefits that come with gifts or an inheritance of significant financial resources.

As you work with clients who feel this way, please reach out to the Community Foundation. Every day, our team works with families who are in this exact situation. We’ll help you evaluate strategies such as:

• Establishing philanthropic components of an estate plan so that children receive only the amount that can pass to them free of estate tax, with the rest passing to a charity, such as a Donor Advised Fund at the Community Foundation.
• Setting up a Donor Advised Fund at the Community Foundation to allow your clients to support favorite charities during their lifetimes, with the terms of the Donor Advised Fund providing that the children step in as successor advisors following the clients’ deaths. As successor advisors to the Donor Advised Fund, the children can work with CFAAC to recommend grants to favorite charities, support interest areas pre-selected by their parents, or both.

Many clients are attracted to this type of structure because it not only could help avoid estate tax, but also allows their children to stay involved with all of the family’s wealth, work together and keep sibling bonds strong, and get involved in the community.

Please reach out to CFAAC to explore strategies that will help your clients meet their financial and tax goals, as well as honor their wishes for children to live happy and productive lives. Contact us at 410.280.1102 or at info@cfaac.org for more information.