To the best of my recollection, I have never met a trust fund kid. I’m sure there are benefits to having a friend who never has to worry about working, paying rent or facing the dreaded “I’m sorry, do you have another card?’ from an ambivalent waitress. He or she might offer to foot your bill or pay for trips and would never squeeze you for cash. Sounds convenient, right?
But perhaps actor Philip Seymour Hoffman was aware of something about trust fund children that I am not. His untimely death resulted in a large sum of money going directly to the mother of his three kids because he refused to put any cash into trusts for them. Reportedly, he told his accountant that he didn’t want them to be perceived as “trust fund" children.
Which begs the question…why?
His decision is not without precedent. Reportedly, Bill and Melinda Gates will leave their children only $10 million each. Warren Buffet allegedly will do the same. On the other hand, Oracle chief Larry Ellison famously began distributing the family fortune to his kids at the age of 18. He didn’t want them to "be afraid of money" but instead wanted them to learn about the ethical and social responsibility that access to a vast fortune entails. Although both dropped out of college, they are hardworking adults.
It’s pretty simple to understand why creating trust fund kids may not be optimal for some uber-wealthy families. The common perception is that money is a primary motivator for hard work. That's a complete myth. In fact, leading motivators for hard work are caring about customers and clients, having a sense of purpose, passion, an alignment of values, wanting to achieve and just plain having fun.
What’s interesting is that Hoffman made a shrewd declaration of how society endorses the wealthy and privileged at the risk of alienating the lower classes. Perhaps he also wanted his children to learn the value of earning a dollar and, more important, character.
However, character does not come from a zip code. Parents with limited means raise responsible children and struggle with the same parenting issues as middle- and upper-income parents.
For my money, the underlying issue is not related to how much cash we give or leave for our kids, it’s the life lessons we teach them. What kind of role models are we as parents? What kind of respect do we exemplify toward others? How much do we show love to folks in our own households?
Money doesn’t buy happiness. I would guess that a trust fund doesn't either.
Would you ever establish a trust fund for your child? Post a comment and let me know.
Janet Taylor, MD, MPH, a mother of four, is a psychiatrist in New York City. Follow her on Twitter @drjanet. Read more of her posts here. Got a question for Dr. Janet? Email her at email@example.com.