Don't wait until your children are old to give them their inheritance
8 ways to pass on wealth to young adults which strengthens, rather than spoils, them
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Our elderly are among the wealthiest people in history. Our young are economically dislocated in ways that is undermining their ability to progress through the ‘traditional markers of adulthood’: the key milestones of development associated with stability, success, and happiness, like completing education, stable employment, homeownership, marriage, and parenthood.
This interrupted progress is observable even in families with the means to overcome it. Older generations don’t commit resources even where it would be effective. Few think to question outdated norms of inheritance, in which the default expectation is that the vast majority of the estate will change hands only after the death of the eldest generation (see example here).
Partly this may be born of legitimate concern (not wanting to spoil the young), but partly it is simply inertia, a failure to recognize that something that was once unnecessary is now essential.
In 1989 the average age at which an American received an inheritance was forty-one. It is now around fifty-one, and the largest inheritances go to people aged fifty-six to sixty-five. This means that wealth arrives just in time to improve retirements, rather than improve their kids’ childhoods or the home they provide them.
It was not always this way. In fact, as is so often the case, we find that 20th century economic norms were anomalous. For most of European history, marriage was a principal occasion of wealth transfer: in Renaissance Tuscany a dowry commonly amounted to more than half of what a son would inherit, the English landed classes renegotiated the family settlement at each generation’s marriage, moving capital downward exactly when a new household was forming. Wealth arrived when it was time to build.
A healthy norm that remains among successful families is paying for higher education. Parents accept this norm because it is understood that paying for an education helps children take on the beneficial responsibility to work, rather than spoiling them. Debt measurably delays the rest of life — student debt is a documented reason young women in particular postpone marriage and children.
Crucially, however, there are many other proven methods for investment in the young that allow parents to confidently pass on substantial resources in a way that also transfers responsibility, instills virtue, and moves children reliably through the markers of adulthood.
There is a rich middle path between giving young adults nothing and leaving them prematurely flush with cash and consumer goods. Families with the means to do so should stop leaving these options on the table and should play a more active role in enriching and accelerating the lives of their children.
The need is real. Young adults are delaying marriage and parenthood under housing costs, student debt, and the general expense of living, and nearly a quarter of childless Millennial and Gen Z adults say they do not plan to have children for financial reasons.
Beneath the economics is a social problem: seventy-nine percent of Gen Z report feeling lonely, and young adults are nearly twice as likely to report loneliness as people over sixty-five. They have few friends, thin social networks to provide romantic prospects, and are left to assemble adult lives alone, at their own expense.
Some suggestions follow, derived from the histories of the families with strong lines of succession. Some require substantial wealth to undertake, but most can be scaled to different strata of middle-class resources.
Give young adults membership in social clubs, networks, and real third places.
Member’s clubs, gyms, sporting groups, evening educational programmes, donors’ circles for charities and institutions… anything which continues the healthy function of universities to give the young a chance to casually mix with well-adjusted sets of peers. Essential for continuing to make friends, deepen networks, and form relationships.
Giving them somewhere to host — a dining club membership, a standing arrangement at a good restaurant, a venue where they can entertain friends and receive a potential partner — is also a huge asset. Hospitality is a skill which requires opportunity and practice.
Young couples who meet in person — through church, parties, school, shared institutions — report happier marriages than those who met online, and divorce at lower rates. For more detailed thoughts and suggestions on this element, see my previous piece:
It was recognized that pairing people into suitable, stable, and fruitful units was the responsibility of the whole of society, and elaborate social infrastructure was maintained by older generations to support this.
There was a compact: elders would hand on traditions and events (as well as funding for participation), and the youth would take them seriously and engage relentlessly.
If they haven’t yet settled down in a particular locale, responsible travel can serve a similar function: pilgrimages, mission trips, visits to trusted family friends abroad, a cooking course in another country, etc. The Grand Tour sent young men through France and Italy as the completion of their education; before it, the pilgrimage roads to Canterbury and Compostela did similar work.
Tell them early that you will buy the ring and pay for the wedding.
Say this explicitly, years ahead. Couples now routinely cite the cost of a wedding as the reason it stays indefinitely postponed, and postponement compounds: women who spend fewer of their fertile years married end up with measurably fewer children than they themselves say they want. The marriage ‘portion’ existed to remove this obstacle. It is a disaster to let the founding of a new branch of the family wait on catering costs.
Provide the downpayment on a house and cover the renovation of rooms where social and family life happens.
Kitchen, dining room, children’s bedrooms, garden — and, if possible, give the relevant heirlooms now rather than later, like the table and the silver. This is very trad! A downpayment produces a mortgage — no bad thing — but a finished kitchen and a garden produces dinners, birthdays, and a home people want to be in. If you’re worried about spoiling them, leave the master bedroom, the screen rooms, etc. for them to cover themselves over the coming years.
Cover what they need to start a family.
Pay for their health insurance with full maternity cover, and then secure help in the nursery years with a nanny fund, a cleaner, a night nurse in the postpartum months. Help them create your grandchildren!
Help with everything which will maximize childhood quality.
Cover the basic expenses of the grandchildren: school fees and the healthy extracurriculars around them, like instruments, sports, and trips. A majority of American grandparents already contribute something to their grandchildren’s education. You can absolutely make it explicit in advance, so your children can plan a third or fourth child knowing the schooling of all of them is met.
Arrange the multigenerational holiday.
The same house, every summer, everyone: a ritual which will embed itself in the family memory and identity, but also a huge financial relief on young families seeking a holiday.
Italian families had the villeggiatura, the annual retreat of the whole clan to the country villa; the English had the country house in August. It gives cousins a shared childhood, gives grandparents real rather than ceremonial contact with grandchildren, and the research on grandparental involvement points where you would expect, toward better outcomes for young and old alike.
Put the family’s professionals on retainer and extend them downward.
Doctors, lawyers, accountants, and a priest or spiritual director who knows the family. The great households kept a chaplain and a physician for everyone under the roof. Make sure that whenever children are doing the responsible thing and seeking professional guidance on important decisions, they immediately know where to turn and receive advice that leaves them stronger.
Pass on productive property.
Make sure you pass on wealth in a form which conveys responsibility and demands diligence, rather than liquid wealth which demands nothing and can be easily squandered. This allows you to simultaneously enrich your children and teach them the value of work: the two need not be in direct tension. The mechanisms and timings are so important I devoted several chapters of my book to successfully navigating this concern.
Each of the suggested approaches here buys a state of life rather than giving formless freedom. Each strengthens your children’s ties — to spouses, to children, to kin, to community, to the Church — where raw cash buys autonomy from all of them, which is why raw cash corrodes. But cash is not the only way!
And, unlike giving at death, you get to watch the beautiful consequences unfold and participate in them. If you take these steps, you will have happier children, more grandchildren, and more time with all of them.
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Sic transit imperium,
Johann
Excellent article. I took an Estate Planning course in college and learned how gifting before death can have a positive impact for both sides. My parents were able to see the effect of yearly gifts and share more time with their children and grandchildren.
But money can be dangerous in the wrong hands. Like drugs, it mutiplies whatever character it resides in. If you are unsure, a small amount can be given and the results watched. Having it and giving it come with great responsibility. Children can be elevated or destroyed by your "generosity."
Profound and essential wisdom in this article!
I have a young adult daughter and for many years have been purchasing and setting aside important material goods for her future home. I’ve always told her why we were purchasing this or that item, and what the ultimate end goal for the purchase will be. Together, we’ve also been working on heirloom quality quilts, needlepoint ornaments, and other such items for her future home. I think these items help make a future marriage feel all the more real than just the financial planning aspect, though that’s certainly important as well. Assembling the modern “hope chest” can be a wonderful way to help a young woman to keep her eyes where they need to be in a world demanding she look elsewhere.