A New Outlook on the “Trust Fund Baby”

Wealth 1

Many wealthy people worry about the potentially corrosive effect of making their children superrich. Not Larry Ellison. The Oracle founder and CEO, the third richest man in the United States — worth $43 billion, according to FORBES’ latest estimates — has never pretended that his son David, 30, and daughter Megan, 27, were anything but trust fund babies.

What comes to mind when you hear the phrase “trust fund baby”? Over privileged, lazy, easy-breezy life? Trust fund babies get a bad rap from pop culture. Many people think these kids are spared character-building inconveniences. Nevertheless, character is neither a function of personal wealth, nor is it necessarily deterred by it. In fact, 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?

To talk with an estate planning attorney, visit www.elderlawannarbor.com.

Reference: Forbes (June 5, 2013) “Larry Ellison's Trust Fund Babies