How Generous Are You?
How much do parents owe their children? Warren Buffett’s decision to give billions of dollars to the Bill and Melinda Gates Foundation is the most magnanimous cash gift in the history of mankind. He chose charity over his children.Buffett apparently believes that, in life, he has given his 3 grown children the start they needed to be successful. Beyond that, Buffett feels his children’s future wealth must be earned.
Parents generally provide a safe, healthy, and happy home environment for their families. They are usually supportive parents encouraging their children to grow and meet the demands they will face in adulthood. Parents often instill a good work ethic filled with determination and the ability to deal with set backs and some failures.
Urban sprawl is the result of parents attempting to find safe and upscale neighborhoods, schools and social outlets for their children. The moves put more pressure on parents to commute to and from work. It also increases the likelihood of isolationism from living in “starter castles” surrounded by large lots. But this is the price parents are willing to pay for their children.
As children approach the college prep years in high school, parents get involved in finding funds and schools to meet their child’s needs. They spend summers traveling to visit campuses, talk to financial advisors about payment options and work to understand SAT/ACT testing. Parents get their first break from raising a child once he or she is dropped off at school for freshman orientation.
If all goes well at college, the best outcome is a high paying job that keeps the graduate independent and living on their own. But, the reality is that over half of graduates, and nearly all non-graduates, return home to live with mom and dad. Work is hard to find and the cost of living makes it impossible to pay school loans and the rent in the same month.
Hence, parents keep supporting and giving to their “kids.” If one or both parents die prematurely, they may never see their kids on their own. So, after years of support, should you also leave your estate to your kids to split and enjoy?
Or do you do a “Buffett” and give your estate to charity and give someone else a chance to be successful?
Side thought:
For centuries in the US it was not uncommon for multi-generational families to live together in the same house. Some cultures, like the Samoans, still adhere to the multi-generational approach to family life. With generations spanning all age groups, the learning and sharing that goes on in these homes is special with long term positive outcomes. Considering the millions of children home alone as parents work multiple jobs or commute several hours, the idea that other adults are with the kids must be very comforting.
If little junior or sissy returns home after college because of debt or lack of a job, is that really “bad?” Considering the hefty size of most upper and middle class homes, the addition of family members is not as traumatic as the “old days” of sharing one bedroom. Creating homes with multi-generational families may be an answer to the economic downturns that have plagued US families for the past 40 years. With the kids working (even at minimum wages), it will help offset rising costs and other financial issues that families living apart cannot resolve.
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