It’s not necessarily an acronym for a new program, but for many families, they’re adopting it, nonetheless. SKI simply means “spending the kids’ inheritance” – and skiing is a growing trend in the U.S.
Many celebrities and tycoons are enjoying this new found freedom – for the sake of their kids, of course. They say it makes their children stronger and more appreciative of money and everything that comes with wealth. Michael Bloomberg is one of those tycoons who’s happily skiing. He’s publicly stated several times that he will leave his estate to his own foundation, along with the Carnegie Corporation and thousands of other non-profits. With a $19.5 billion net worth, it’s easy to see how he could benefit those thousands of nonprofits. As for his two daughters, they receive nothing in terms of assets.
Warren Buffett and Bill Gates are two more in the uber wealth club who are skipping the massive inheritances.
Another example is John Arnold, a 42 year old multi-billionaire, who sold the vast majority of his hedge fund a few years ago. Before then, he was already enjoying a net worth of more than $4 billion. He and his wife have chosen to give most of that wealth away and his wife has stated many times that “dynastic wealth” is something she and her husband do not believe in. Their three children will receive nothing.
It’s believed 25 percent of American parents are going with the “less is more” mentality of leaving very little, if anything, to their teens or adult kids.
Pressure from the Kids
Many of us can relate to our little ones and their pleas of “Pleeease let me have this! Pleeeease!” Of course, they grow up and those Barbies or matchbox cars are no longer ‘must haves’. But one in twenty of those over the age of fifty have said they experience pressure from their adult children to loosen the purse strings on their inheritances and 25 percent of them say they’ve indeed given part of the assets to them.
Unfortunately, there are also those who say that they’re now concerned about having enough to retire on and because of that, they’re rethinking not only their estate planning as a whole, but also making decisions that include not letting go of those monies earmarked for their kids. We’re living longer and there are those always-present concerns about the economy and healthcare. Could it be that when adult kids hear “no” from Mom and Dad, they revert back to a child who demands what they want? Some say that’s indeed what’s happening and as a result, for their temper tantrums, those channels are permanently shut down by Mom and Dad.
This begs the question: why are so many otherwise responsible adults turning to Mom and Dad, even after they’re building their own families, for money?
It comes down to the same thing their parents fear – not having enough to support themselves in tough economic times. Mom and Dad know that tough times are temporary, but it could be their kids have never had to struggle. As one couple, both in their late 60s explained, “No one wants their kids to struggle, but no one wants their kids to become spoiled brats and demand their parents to fork over the cash.” Their solution? They’re skiing.
So is this a temporary trend or a new way of thinking when it comes to creating wills and estate plans? Time will tell.
If it’s time to update your own estate plan, we welcome the opportunity to discuss your options in how you choose to include your kids – or not – in your will. Contact our offices today.