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How Much Should You Give to Your Children?

It’s the most common question I get in estate planning: How much should I leave to my children?

The answer to that question is not a simple formula. However, I read a thought provoking article by Stephen Lewis, Music To My Heirs: The Challenge of Generational Wealth and How to Succeed.

Lewis recognizes that 60 trillion dollars of wealth will transfer by the year 2061. With that transfer, he emphasizes the central question: What is the right amount to leave my kids and grandkids without messing up their lives?

Without answering the question of how much to leave to children, Lewis observes, “My research shows that if families transfer wealth without providing knowledge and values, it is more likely to be destructive than productive.”

As a point of reference, he emphasizes that everything we have will end up in four places:

1. You will use it in your lifetime.
2. You will give it to someone you care about.
3. You may give it to charity.
4. The government will take it.

Ultimately, Lewis stresses there are 3 things to pass on to heirs: (1) wealth, (2) knowledge, and (3) values. With that in mind, he returns to answer the question of how much to leave to children. His answer:

The amount of wealth you provide to your children should be equal to the amount of knowledge and family values transferred.

The next step? Assess the amount of knowledge and values you’ve transferred before making a wealth transfer decision.

Related articles:

Don’t Give Your Kids Money

Pitfalls of Passing Stock to Children

Giving as a Family

About Bill High

Bill is CEO of the Signatry: A Global Christian Foundation. He works with families, individual givers, and financial advisers to share the foundation’s message regarding biblical generosity and charitable giving. » Learn More. He is the co-author with David Green of Giving It All Away and Getting It All Back Again: The Way of Living Generously.

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