Regardless of exactly how many hundreds of millions David [Ellison] and Megan [Ellison] are worth, [Larry] Ellison sets a powerful example for other parents who want to transfer big bucks to kids. Minimize the gift tax hit by giving them early stage stock. But more importantly, give them the courage—and the freedom—to find something they really care about, whether or not you share that particular passion.
Trust funds get a fairly bad rap from popular culture. After all, trust funds might breed “trust fund babies.” You know, children borne of privilege and spared character-building inconveniences. Nevertheless, character is neither a function of personal wealth, nor is it necessarily deterred by it. In fact, in many cases an inheritance just may give your heirs the tools to do great things.
A recent article in Forbes is a case in point. The article titled “Larry Ellison's Trust Fund Babies” considers the family of Larry Ellison, the third richest man in the United States and longtime rival of Bill Gates for those top few spots. It seems the Ellison children, Megan and David are doing quite wonderful things as trust fund babies. Both film producers and financiers of some note these days.
“The sooner my kids get experience dealing with the pluses and minuses of having a lot of money, the better” Ellison is quoted to have said. So what does this mean to you and your heirs? With the Ellison family we find one more example of denying extravagant inheritance for purposes of dissipation. Bill Gates is yet another example.
What about you? Do you believe giving money helps provide tools to grow or does it stunt growth? What lessons or tools will you leave to your loved ones and what will those mean to them?
You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning
Reference: Forbes (June 5, 2013) “Larry Ellison's Trust Fund Babies”