Why do people do this? It never makes sense

aggiefan2002 said:

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One reason I can see this could be explained by looking at a family I know well.

Grandparents are late 80's, 1M net worth.
Their 3 kids are in their 60's and worth 20M, 7M, and 2M respectively. In other words, all have enough or more than they need. That $300k wouldn't make any meaningful difference.

But of their ~7 grandkids between 25-45, one has a family of four, another recently divorced and single mom, etc. etc. So this is a case where $150k each could pay off debt, be a house down payment, fund a couple college funds, etc. In other words, could make a big impact.

This is just one example.

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I appreciate that, but it seems to be an exception.

I know a man worth 250m +. He's got four great kids. He skipped them completely and gave it to the 9 grandkids that are the complete scum of the earth. The kids are not wealthy at all. Just normal folks.

Lake08 said:

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I know a man worth 250m +. He's got four great kids. He skipped them completely and gave it to the 9 grandkids that are the complete scum of the earth. The kids are not wealthy at all. Just normal folks.

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250/9=almost 28mm each. Seems like they could help their parents out a little

I don't think it's as much of an exception as it seems. With people living longer, it's often less helpful to give money to already retired kids in their 60's than their kids in their 30's and 40's.

Are you possibly talking about GST Trust language in a will?

That would be different than discussion so far.

What's the limit below which an inheritance isn't subject to estate taxes?

$12.92M right now, double for a couple, assuming no lifetime gifts. Will go up a bit over next couple of years, then is slated to be cut in 1/2 on 1/1/26 unless changed with legislation before then.

Lake08 said:

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I know a man worth 250m +. He's got four great kids. He skipped them completely and gave it to the 9 grandkids that are the complete scum of the earth. The kids are not wealthy at all. Just normal folks.

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Interesting that you say this.
I got into a conversation with a professional chauffeur who drove wealthy clients (including billionaires). He said some are the most generous people you will ever meet, but he also said their grand children are the absolute worst. There seems to be a common theme that when huge sums of wealth are passed down, it turns the second generation into bad humans.

That's beside the point of the thread though as to why skip a generation. I thought there was some tax benefit to this regarding estate taxes through some specialized trust structure. Maybe someone will come along who knows.

aggiefan2002 said:

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One reason I can see this could be explained by looking at a family I know well.

Grandparents are late 80's, 1M net worth.
Their 3 kids are in their 60's and worth 20M, 7M, and 2M respectively. In other words, all have enough or more than they need. That $300k wouldn't make any meaningful difference.

But of their ~7 grandkids between 25-45, one has a family of four, another recently divorced and single mom, etc. etc. So this is a case where $150k each could pay off debt, be a house down payment, fund a couple college funds, etc. In other words, could make a big impact.

This is just one example.

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Is it true that the only thing parents love more than their own children is their grandchildren? I heard this said once, maybe it's true. Can any grandparents confirm or deny?

Can confirm. My dad loves my daughter a magnitude higher than me.

I think a lot of the time this is the instrument people are talking about when they mention generation skipping.