It’s not inherently wrong to decide against leaving your $11 million estate to your children—legally, ethically, or financially. This is a deeply personal choice that many affluent couples in your position make for various reasons, and there’s no universal “right” answer. What matters most is aligning the decision with your values, communicating it effectively, and planning thoughtfully to minimize regrets or conflicts. Below, I’ll break down key considerations based on common expert advice from financial planners, estate attorneys, and psychologists, while highlighting practical steps for someone with a substantial net worth like yours.
Legal Perspective: You Have No Obligation
In the U.S. (assuming that’s your location, as it’s the most common context for such queries), you’re under no legal requirement to leave an inheritance to adult children. Estate laws allow you to disinherit them entirely, as long as your will or trust is properly drafted and you’re of sound mind. The only exceptions are:
- Minor children: You can’t disinherit dependents without providing for their care (e.g., via guardianship or trusts).
- Spousal rights: Your spouse may have elective share rights in some states, claiming a portion of the estate regardless of your wishes.
If your kids are adults and self-sufficient, you can direct your assets elsewhere—such as to charity, friends, or even spend it all during your lifetime—without legal repercussions. However, poor planning could lead to probate disputes if family members challenge the will on grounds like undue influence.
Ethical and Emotional Considerations: Pros and Cons
Opinions vary widely, but here’s a balanced view from sources like financial advisors and family therapists:
Reasons It Might Feel “Wrong” (or Why Some Choose to Leave Something):
- Family legacy and support: Many view inheritance as a way to provide a safety net, ease burdens like student debt or homeownership, or honor cultural/religious norms (e.g., Proverbs 13:22 in the Bible: “A good man leaves an inheritance to his children’s children”). For high-net-worth families, leaving even a modest portion can foster generational wealth without spoiling heirs.
- Avoiding resentment: Not leaving anything might strain relationships if your kids expect it or feel entitled. Surveys from groups like HumanGood show that 60-70% of older adults plan to leave some inheritance, often to prevent family rifts.
- Moral duty: If your wealth came from family sacrifices or if your kids have supported you (e.g., caregiving), some ethicists argue reciprocity is fair.
Reasons It’s Not Wrong (and Why Many Opt Out):
- Promoting independence: A large inheritance can demotivate adult children, delaying maturity or leading to poor financial habits. Warren Buffett famously said he’d leave his kids “enough so they can do anything, but not so much that they can do nothing.” High-profile billionaires like Bill Gates and Mark Zuckerberg have publicly limited inheritances to encourage self-reliance.
- Your money, your choice: Inheritance is a gift, not an entitlement. If your kids are financially stable, you might prioritize your own enjoyment, philanthropy, or causes that align with your values (e.g., environmental or educational charities). Pete the Planner notes that spending on experiences in retirement can be more fulfilling than hoarding for heirs.
- Potential downsides for heirs: Sudden wealth can lead to issues like addiction, divorce vulnerability (inheritances are often separate property but can complicate splits), or poor decisions. Advisors often cite cases where inheritances were squandered, leading to regret.
- Changing norms: Millennials and Gen Z increasingly value non-monetary inheritances like strong values, education, or emotional support over cash. Reddit threads (e.g., r/Millennials) show many younger adults prefer parents enjoy their money rather than save it all.
Ultimately, if your decision stems from love (e.g., wanting them to build their own success) rather than punishment, it’s defensible. But transparency is key—discuss it openly to manage expectations and explain your reasoning.
Financial Advice for Your Situation ($11M Net Worth)
With $11 million in your 50s, you’re in an enviable position, but skipping inheritance requires smart planning to optimize taxes, growth, and spending. Here’s tailored guidance from sources like Investopedia and Kiplinger:
Estate Tax Implications:
- The 2025 federal estate tax exemption is $13.61 million per person ($27.22 million for couples), so your estate is currently below the threshold—no taxes owed if you pass before 2026. However, the exemption sunsets to about $7 million per person in 2026 (adjusted for inflation), potentially exposing ~$4 million to 40% federal taxes (plus state taxes in some areas).
- Solution: Use lifetime gifting. You can gift up to $18,000 per person annually (2025 limit) tax-free to kids, grandkids, or others. For larger amounts, consider paying tuition/medical bills directly (unlimited exclusion). If not leaving to kids, direct excess to charities via donor-advised funds for immediate tax deductions.
Alternatives to Direct Inheritance:
- Spend it wisely: Enjoy retirement—travel, hobbies, or philanthropy. This “die with zero” approach (from Bill Perkins’ book) ensures you maximize life while minimizing unused wealth.
- Charitable giving: Set up a foundation or trust for causes you care about. This reduces taxes and creates a legacy (e.g., scholarships in your name). Tools like charitable remainder trusts provide income now and donate later.
- Structured support: If you want to help without a lump sum, use trusts:
- Incentive trusts: Tie distributions to milestones (e.g., graduating college, steady employment).
- Dynasty trusts: Protect assets for grandkids or beyond, shielding from divorce/creditors.
- Special needs trusts: If a child has challenges (e.g., addiction), this ensures funds aren’t wasted.
- Lifetime gifts: Give now while alive to see the impact, but use irrevocable trusts to protect from kids’ spouses or bad decisions.
- Non-financial inheritance: Focus on teaching financial literacy, funding education, or co-investing in their ventures.
Potential Risks and Mitigations:
- Family conflict: Have a family meeting with a neutral advisor. Explain your “why” (e.g., “We want you to thrive on your own”).
- Your longevity: At 50s, you could live 30-40 more years. Factor in healthcare costs ($300K+ per couple in retirement) and inflation—don’t deplete everything too soon.
- Market volatility: With $11M, diversify (e.g., stocks, bonds, real estate) for growth. Aim for 4-5% annual withdrawals to sustain the portfolio.
- Professional help: Consult a fee-only financial planner (via NAPFA.org) and estate attorney. They can model scenarios, including what happens if you change your mind.
In short, no, it’s not wrong—many successful people choose this path to foster independence and live fully. The “wrong” part would be not planning or communicating, which could lead to surprises or disputes. If your kids are doing well, redirecting your wealth could even strengthen family bonds by emphasizing values over money. If you’d like resources for planners or books (e.g., Die with Zero), let me know!