Some would say getting an inheritance is like winning the EuroMillions lottery, but this may be the wrong attitude to possess when it comes to matters of family money. And Gloria Vanderbilt’s son Anderson Cooper can vouch for that – his mother the successful fashion designer and the family having made their fortune in the railroad and shipping industries – with Cooper refusing to take any percentage of the inheritance on the point that he doesn’t believe in the idea of an inheritance.
But what was the sequence of events that led to this potential trust-fund baby’s rejection of the $200 million family fortune, an amount reminiscent of the record Powerball and Mega Millions jackpot of the past? In response to the statement his mother was a perfect example of how inheritance can change one’s life for the better he could only state that it was an “anomaly”. But there have been plenty of philanthropists created from receiving family inheritance, so we are left wondering the cause of Cooper's attitude. He may just have heard a lot of the hype surrounding family inheritance, which in turn created the inexhaustible resources of advise available to anyone who requires assistance in the matter.
There's a lot of good advice out there for those of you who win the Mega Millions jackpot this Tuesday and wish to set some aside your lotto winnings for your kids’ inheritance! Knowing your $149 million first prize will go to a solid foundation, when your children use it for the benefit of more than themselves, enhances your lottery winning gratitude infinitly. And gratitude is the name of the PlayHugeLottos.com game!
Some of the most popular and effective strategies for deciphering if your kids will be able to handle a substantial inheritance are as follows:
1. Distribute income over ages and significant events
It’s a fair concern that your child won’t have the emotional or intellectual maturity to handle millions of dollars, euros or pounds in inheritance money – think about your maturity level at age 20 and if you would have been capable of managing millions? Many parents will create trusts that distribute small annual amounts of the inheritance that increase as their child reaches particular ages (30, 35, 40, or achieves certain skills such as further education, allowing certain large life expenses to be covered by the inheritance money. This also eliminates the worry that the initial large sum of inheritance money would demotivate the child enough to become reliant on the inheritance.
2. Give your children a test
In the US, as much as $14,000 can be gifted to as many people as you choose – and when you’re married you and your partner can gift double that – without any gift tax to pay. Parents have been gifting their cash to their kids without any restrictions and merely sitting back to watch what happens. How do you think your offspring would handle the EuroMillions €48 million? Take notes from your unannounced €20,000 gift.
3. Distribute funds through an incentive trust
The fear Cooper expressed during his interview regarding the family inheritance surrounded ideas of squashed ambition and a general lacklustre attitude towards building a successful career. But there’s a strategy to create incentives around receiving the inheritance – from the common incentive known as the “investment banker clause” where the inheritance pay out matches the child’s income. This of course would create the drive within your child to pursue a fulfilling and financially rewarding career, as the annual salary would be matched by the inheritance incentive structure.
Another incentive revolves around education where the trust becomes available upon the achievement of a degree. Though attaining a degree does not explicitly guarantee success in one’s personal life, the qualities and character involved in achieving a degree are the same ones required to handle a large inheritance amount – vision, goal-setting, and engagement with other motivated people.
Which test would give your kids? Tell us - your comments earn lotto points!
4. Begin teaching early with a personal foundation
Start ingraining a positive attitude towards money within your children by creating a personal foundation that benefits society in some way. Not only will you receive a tidy tax deduction, but more importantly for your cause, the kids will start learning about money, developing a healthy attitude towards financial success. The lesson comes in the form of researching worthy causes and donating a portion of their percentage available through the foundation to their chosen charity. Your kids will be sure to monitor its impact, thus learning the value of money.
5. Gift without giving away your cash
Parents who wish to assist their kids in paying off mortgages or student loans opt for this approach: using the federal gift exclusion ($14,000 in the States at the time of writing) to pay directly for mortgages and student loans, thereby reducing the costs for their kids in future.
Get involved with the US powerhouse lotteries or the Euro lottos before the cut off times this week and stand a chance of becoming a winning lottery player! Yours could be that mystical set of winning lottery numbers, but there’s only one way to find out for sure..