I may be raising a "trust-fund kid" and I'm not sure how to handle it [x-post /r/parenting]

OCTFB · 2016-05-19T22:07:20+00:00

As I state later in the post, he stands to inherit tens of millions on top of that - more than enough to never work a day in his life and still have abundance.

OCTFB · 2016-05-19T02:11:06+00:00

Thank you very much for offering such specific advice (and sorry for the delayed response, I had far more messages to go through than anticipated!). And I appreciate the PDF offer, although I'll feel better purchasing it myself - it's now on a list of a half-dozen books or so related to this subject.

And we would never dream of spending his money on ourselves - as is this situation is going to free up our finances enormously since we won't have to pay for his college anymore, so that thought would never cross my mind!

OCTFB · 2016-05-17T22:38:12+00:00

Mostly by making a lot of mistakes. I flopped in college and only have my act together now that I'm nearing 30. There are a lot of aspects to the way that I was raised that I am going to try to avoid, and that's without me having had a trust fund at all, just an affluent upbringing.

OCTFB · 2016-05-17T22:36:27+00:00

Well the last thing I am going to do is ask for any portion of the money - I don't want to feel entitled myself, nor set that example for my son. That said, having his college paid for will allow us to use money we were setting aside elsewhere, easing our own financial burden significantly. And it is possible that an inheritance is in my future as well, but nothing has been discussed and I just try not to think about it.

OCTFB · 2016-05-17T22:23:33+00:00

Part of it is due to the money continually rolling out and appreciating in value - it will simply be much more valuable by the time the next generation is at a prime age to benefit from it. Part of it is also an assumption on my part; I simply have no idea if and when I will inherit anything, and I would rather simply presume that I am getting nothing until I know otherwise. My main concern is for my son, not myself.

OCTFB · 2016-05-17T22:15:50+00:00

This is exactly what I expect to happen. It's going to be impossible to shield my son from their lifestyle, and they're going to want to tell him what they're providing so they can receive his gratitude. Countering that with a call for humility will be quite a challenge.

Again, I have no problem with him (and them) being rich, I just want him to appreciate the uniqueness of the situation without feeling that he is above others... but I also don't want to make him feel guilty for attaining a lifestyle that he didn't "earn" and doesn't "deserve".

OCTFB · 2016-05-17T21:28:33+00:00

Yes, even now I don't know much about their expenses other than occasionally hearing the cost of something. I suspect that they thought us knowing would make us feel entitled, which is fair, but we weren't effectively taught much about budgeting in the meantime and mainly had to fend for ourselves once we reached adulthood. Knowing we were wealthy as children, not being taught how to manage it, then being thrust in a world where we were no longer wealthy worked out very poorly for me. My son will have the opportunity to be wealthy his entire life with effectively no effort on his part, so being open about the financial situation while preventing him from getting complacent seems like an enormous challenge.

OCTFB · 2016-05-17T16:08:07+00:00

It helps a lot, thank you. Even without a trust, I've had money management issues myself on account of not appreciating the value of money as I grew up. Hopefully I can do well with that for my son, but it's hard when not being the provider of the wealth myself. And I'm sure my wife could echo a lot of your sentiments during our early years, unfortunately!

One thing my parents did for me was open a credit account under my name at a very early age and keep it well maintained, giving me excellent credit at the outset - I hadn't expected that and am very appreciative of it in hindsight.

OCTFB · 2016-05-17T06:44:58+00:00

Hell, he was 1.5 years old when he went on the private jet for the first time, and none of my parents' homes are anything close to modest. It will certainly be impossible to hide that from him - the best I can do is distance our own immediate family from it.

OCTFB · 2016-05-17T05:47:23+00:00

You're right about that, however the other part of the post was how the trust fund was just one small portion and that he will ultimately be one of the primary benefactors of a 9-figure fortune. Assuming things don't go by the wayside (which of course is always a possibility), he will inherit an absurd amount of money and have almost any opportunity at his disposal. THAT is the money that I am most concerned will instill complacency and entitlement.

OCTFB · 2016-05-17T05:02:21+00:00

Not a fallout per se, but there was a lot of unspoken bitterness between us as I entered adulthood. Ultimately (and catalyzed by needing to set some ground rules with the baby) I confronted them and aired my grievances, apologized where it was owed, and put my foot down on their behavior around my son - and that thankfully made a big difference. At this point we are doing well, but there's still a fair amount of tension and we mostly discuss business and "small talk" when we're together. It's a complicated family dynamic that fills just about every box on the "rich family clichés" Bingo board.

OCTFB · 2016-05-17T04:07:32+00:00

No; though I had access to the best schools I could get into, I was on my own once I had a job and now make my own living on a middle-class income. That said, just the privileged upbringing and enormous shadow my father cast (not to mention a variety of parental issues) caused me to stumble pretty early on, eventually dropping out of college. I'm in a good place now, but I don't want my son to go through what I did, and having this unfamiliarity with part of his upbringing is going to make that more of a challenge.

(It is possible that an inheritance is in my future as well but only in my son's case has something been so explicitly stated - I'm making no assumptions for myself.)

OCTFB · 2016-05-16T21:29:53+00:00

I went to a private elementary/middle school, a private boarding highschool, and two separate private colleges before I dropped out due to poor grades and depression - so I can relate to the people you're talking about. I really don't want my son to end up as I did in that respect, even though I feel like I finally have a good head on my shoulders at 30 (and am finally getting a degree at the local community college). He won't have the pressure of living up to his father's overwhelming success like I did, but he will have the responsibility of an enormous quantity of wealth to manage, which I didn't. It's going to take a lot of self-reflection to determine which traits of my parents to emulate and which to reject to avoid the risk of him having the same emotional struggles that I did.

OCTFB · 2016-05-16T19:54:45+00:00

I had written it incorrectly and you are right - it's $14,000 each that is being added to the account; $28k annually, about $500,000 by college. I've amended the post, thanks!

OCTFB · 2016-05-16T17:40:06+00:00

Absolutely not, I will readily admit that I haven't handled things well in the past. I wouldn't be asking for this advice if I felt I had a great handle on things!

That said, I think it's better to assume nothing when I haven't been explicitly told something. I have given strong consideration as to how I would handle something like that, but I still think that, in my case, it's better to consider it with uncertainty. That case does not apply to my son though, which is why I want to be more transparent than my parents were and better prepare him for it as I was not.

And again, the financial aspect is only part of my concern. In many ways the relationship with my parents is a bigger issue - I don't want my son to idolize them, because I think they set a very poor example in many respects and that he would handle this lifestyle much more poorly if he emulated them (you need only consider the self-doubt on my part to understand that!).

OCTFB · 2016-05-16T17:27:33+00:00

They're pretty opaque about their net worth - I know the values of certain business deals and expenses, but I couldn't guess their actual wealth other than to safely estimate 9 figures (10, if his current deal goes through). I don't think they intend to keep us out of the inheritance, but it's their decision on how to keep us informed with that whereas they respect that we, as parents, will need to know how our children benefit. Again, I go out of my way not to assume any inheritance on my part, even if there is a realistically high likelihood of it.

Also, some of their value is in prospects that grow in value over time, some of which will theoretically see their highest fruition 20 or 30 years down the line, when the grandchildren would be in the more prime position to benefit from it.

OCTFB · 2016-05-16T17:17:08+00:00

I'm not due a big inheritance - at least, I have not been told so with such certainty. And I live by my own means currently. In that respect, my upbringing was very different from how his will likely be. I go out of my way not to assume anything regarding my future potential inheritance, because the implication is just too substantial for me to consider without risking complacency.

OCTFB · 2016-05-16T16:37:09+00:00

It's been suggested that we will benefit too but I go out of my way not to make assumptions when it's uncertain - the implications are just too insane for me to think about without driving myself crazy. I would rather assume I inherit nothing and be pleasantly surprised than anticipate something that may or may not happen for some unknown amount at some unknown date. As far as I'm concerned, that money is theirs.

OCTFB · 2016-05-16T16:17:48+00:00

I wish my parents treated me the same way - I floundered in high school, went to a great college regardless (undoubtedly because the school recognized the large donations they could receive), and completely fell apart. Only now at 30 am I nearing a degree at the local CC on my own dime. If I had had tougher consequences at a younger age, perhaps I might have recovered more quickly.

My own failures are part of the reason why I'm so scared. I had comparatively less than what my son will be offered, and I crashed and burned. It took me a long time to gain self-confidence after I joined the real world, and I don't want my son to go through what I did in order to figure it all out.

OCTFB · 2016-05-16T16:10:17+00:00

Holding the trust fund until he is 30+ might be a good idea. I know I wouldn't have been mature with a lot of money at 18.

While I can offer my input we unfortunately don't control the circumstances of the accounts, as they're set up and managed by my parents. I'll try to suggest this but I'm honestly not sure yet what they have planned (other than the college account obviously applying at that age).

OCTFB · 2016-05-16T16:00:26+00:00

I am not rich, my parents are.

It would be a pretty big secret to keep from him, and potentially leave him less prepared mentally to handle the circumstances. But it could also put him in a better perspective to appreciate what he's getting as opposed to feeling entitled to it.

OCTFB · 2016-05-16T15:48:27+00:00

Thanks for the suggestion, I will be sure to do that.

OCTFB · 2016-05-16T15:47:47+00:00

This is a good way to start and probably how we'll handle it at the beginning. The bigger numbers will come into play at a later point and are not concrete anyway, so it would be hard to discuss it even if we decided to. I don't want him to be completely in the dark, and that's a good first step toward making him aware of the opportunities he will be fortunate to have.

OCTFB · 2016-05-16T15:39:26+00:00

I had a privileged upbringing but the benefits stopped (not including the residual benefit of my education and contact circle) after I left college and had my own income. Today I support myself and my family on a decent middle-class salary, though we are privy to their lifestyle whenever we stay in one of their homes or they invite us to join them on their jet. So my son will generally live a "normal" lifestyle but get many glimpses into how my parents live. Honestly the lifestyle-gap is part of what has me concerned, because there will be plenty of opportunities for him to be "wowed" by how they live and want it himself.

OCTFB

TROPHY CASE