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In the next decade, as the so-called Baby Boomers retire and—is it possible?—die, an enormous transfer of wealth, the largest in our history, will take place—largely secretly and in silence. For if James Joyce advised writers to cultivate “Silence, secrecy and cunning,” he might well have passed on the same wisdom to those who inherit money, especially as our society struggles to survive what appears to be endless war and long-term economic downturn.
These events will of course whittle away at the billions that will be left to inheritors, mostly middle-aged, mostly uninformed about the facts of their parents’ largess (they may not even have read the wills), as well as poorly educated about the responsibilities that come along with these inheritances.
We must first deal with the inherent unfairness of this system, which allows those who can afford estate lawyers to set up trust funds that take advantage of huge loopholes in the IRS’s system, loopholes most people may know nothing about or even feel that such advantages for the very rich are irrelevant.
The well-known—to those who benefit by it—generation skipping trust was devised years ago to exempt large estates from paying inheritance, or, more descriptively, death taxes. Over the years, this exemption must have amounted to billions of dollars, a sum never presented to the public that has been injured by it as our social programs, funded by such taxes, fail.
Why should money be inherited, to begin with? An old adage, never quoted, advises “Shirtsleeves to shirtsleeves in three generations”—hardly an attractive thought to those who may never have rolled up their sleeves and surely never want to do so.
Without the parents who leave their fortune to their heirs, unto many generations (for there is now something called a Dynasty Trust that allows money to be passed on almost indefinitely), I imagine that raising children as rich folk do, with private schools, expensive vacations and so forth, hardly prepares those children to work.
After all, they may assume that their parents never work, especially if they, too, inherited money; Franklin Roosevelt’s son taxed him with never having worked a day in his life when the whole family was living in the White House.
An immigrant picking strawberries in a California field might feel the president of the United States doesn’t work quite as hard.
So, when children have been prepared to expect to continue their parents’ lifestyle, it seems imperative, to those parents, to pass along the means. Fair or unfair doesn’t enter into the equation; those born to wealth rarely question their right to what might, at least in some cases, be called the wages of sin. Another adage reminds us that all great fortunes are founded on a crime, and in the case when that crime is not murder—as it often is—it may be the dispossession of all those who will never be able to have these opportunities.
As a consequence there’s a perception, bourn out in at least some cases, of feckless rich kids who hardly deserve their place on the face of the earth.
But how can they be other than feckless? One of the causes of depression and alienation is an unacknowledged sense of guilt, and inherited money brings that sense of guilt with it as surely as it brings manifold opportunities.
But parents generally want to be loved, and money is the currency, it appears, of affection. I’ve only heard of two cases, two of the richest men in this country, who have said publically that they are not going to leave their fortunes to their children.
I wonder how those children reacted to the news.
Great piece, Sallie!!