Among young people who receive sizeable inheritances, there are different groups. Some of them receive their inheritance and struggle with the responsibility of managing it. Many of them keep their money and are more or less successful in handling it. But a small group of these young people eschew their inheritance, choosing instead to give all or most of it away.
Whether generosity or naiveté is the motivating factor among those who do this isn’t clear. What is clear is that these trust fund “progressives” are a sign that not everybody who receives the kind of wealth that could make their life much easier are willing to go down that road.
The challenges of managing wealth as a trust fund child can be burdensome. A group called Resource Generation even brings together young inheritors so that they can speak openly about the challenges of wealth. The members of this group range in age from 18 to 35 and have inherited between $500,000 and $100,000 million of wealth.
The group, prudently, encourages its members to look not only at the needs of the world and the kinds of social change they want to contribute to furthering, but also at their lives and how to realistically plan to take care of themselves and their future children. That said, the group does place a strong emphasis on members being agents of change with respect to wealth inequality.
In many cases, trust fund progressives still have limitations on accessing their received wealth. Most trusts contain provisions that prevent an inheritor from taking out too much money too quickly. Depending on how the trust is written, the trustee overseeing the trust may have broad discretion to refuse the beneficiary’s requests. And if the beneficiary lies about the purpose of the money, they have little recourse.
It is all very interesting, and a reminder of the importance of understanding what kinds of limitations and qualifications should be placed on trust distributions for beneficiaries.
Source: New York Times, “Among Young Inheritors, an Urge to Redistribute,” Paul Sullivan, March, 26, 2013