Rich dads ditching trust funds
Wealthy parents are realising children may not benefit from instant wealth.
Image via ABC/Youtube

There’s an interesting trend spreading among the rich and famous: traditionally people with vast fortunes created massive trust funds for their kids; now they are shying away from this and expecting their kids to carve their own paths. Even Bill Gates has adopted the “no-trust-fund stance” despite being a multi-billionaire. The latest adherent to this principle is the late actor Philip Seymour Hoffman.

"No" to bratty billionaires

According to the Independent, technology giant and philanthropist Gates made the admission earlier this year in response to a suggestion that his fortune could easily make his kids billionaires. He responded that he’d happily give them access to a good education but that they’d need to have a sense that their own work would have meaning and that it would be important to them.

He and his wife Melinda reportedly decided that their kids would have the freedom to do anything, but not so much money given to them that they would go out and do nothing.

Their inspiration? Legendary investor and billionaire Warren Buffett. According to Business Insider, he gave each of his kids $US1 billion - only the catch was this- they had to use the funds to do non-profit work. He was quoted as saying that if you want the best for your kids, don’t focus so much on your estate, but rather the environment in which they grow up.

A will full of surprises

Hollywood A-lister Philip Seymour Hoffman who died in February 2014 is said to have been of similar disposition. Although his $US35 million fortune is much less than his Gates’ or Buffett’s, his will is said to state that his estate go to his long-time partner Mimi O’Donnell rather than into trust funds for his three children, according to the Daily Mail.

One look at accounts such as the Rich Kids of Instagram will show you that there are plenty of wealthy parents willing to lavish inordinate amounts of cash on indulging their kids, but for some very fortunate people it’s more important that their kids learn about values.

A trust fund can still benefit children; instead of merely adopting the easiest method of dispensing the funds, you could create the fund in such a way that it also allows your children to adopt a mature approach to life, money and society.

Of course, should you have the resources to invest in your children, an education policy or a kick-start into business isn’t necessarily a bad idea, but for all of you out there who wish that Bill Gates was your dad, you’d probably be disappointed if you’d expect to spend life cruising on a yacht sipping Moët & Chandon.

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