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Whether to leave an inheritance to your children

Recently, CNN News host Anderson Cooper made news when he announced on the Howard Stern Show that he would not be inheriting his family’s fortune, which consists mostly of his mother’s $200 million net worth (listen to the full interview here – https://soundcloud.com/howardstern/andersooncoopernoinheritance)

Mr. Cooper opined that any inheritance is an “initiative sucker” and a “curse” that keeps those who inherit money from doing anything productive with their lives.

First of all, Mr. Cooper’s annual salary of $11 million makes that pretty easy for him to say. Second, Mr. Cooper’s mother, Gloria Vanderbilt, inherited a $5 million trust fund, which she used to build her fashion and interior design companies into a $200 million empire.

Regardless of what I think is a (tad-bit) hypocritical and self-serving statement by Mr. Cooper, I am in the minority. Only 46% of baby boomers think that it’s important to leave an inheritance.

For those 54% who think it is not important to leave an inheritance, and specifically, those who agree with Mr. Cooper – I am telling you right now that is a cop out. There are many estate planning options to get around the “initiative sucker” excuse. One is to set up a trust and specify specific milestones or achievements that are necessary for the next disbursement of money (college graduation, first job, business start-up, degree in higher education, etc). Another is a fantastic idea that a client recently brought to my attention – leaving nothing to their son, but instead, starting a non-profit that the son could work for and earn a decent salary, thereby ensuring funding for a cause they believed in and at the same time ensuring that their son had a job available if he chose to work for the company.

No matter what side of the fence you fall on, it is important to leave this world a better place than you found it. Whether you think that can be accomplished by leaving your children an inheritance, or by leaving your money to a cause you believe in, action is required on your part and starts with a solid estate plan.