Are you part of the inheritance ‘SKI’ Club?

When it comes to your children’s inheritance, are you caught between a desire to provide enough financial security for their future while protecting them from over-entitlement? If so, you’re not alone. Perhaps it’s time to consider joining the inheritance SKI Club.

For many parents, leaving their children a financial nest egg to help safeguard their future is a key priority. We want to provide for our families and ensure their comfort and support them long after we’re gone.

But a growing number of high-profile, wealthy individuals are challenging some of the traditional assumptions about inheritance. It raises questions around whether more of us should join what the media has dubbed the SKI (Spend Kids’ Inheritance) Club.

Daniel Craig is the latest celebrity to shun the idea of passing on the majority of his multi-million-dollar wealth to his children, claiming he would rather “get rid of it or give it away” before he dies. “Isn’t there an old adage that, if you die a rich person, you’ve failed?” Craig asked in one interview. “I think Andrew Carnegie gave away what in today’s money would be about US$11 billion, which shows how rich he was because I’ll bet he kept some of it too. But I don’t want to leave great sums to the next generation. I think inheritance is quite distasteful.”

1. Help not hamper

Craig is not alone. Bill Gates, Andrew Lloyd Webber and Warren Buffet, among others, have all spoken about the importance of limiting the value of the inheritance they plan to pass on to future generations.

The debate goes beyond leaving what can be termed a ‘healthy’ inheritance, which provides financial support during your lifetime in the form of gifts, and can help provide stability for loved ones, as well as help cover the costs related to particular life stages. This could include your child buying a home, getting married or helping with the costs of grandchildren.

Instead, the focus aligns to Warren Buffet’s view, who is estimated to be worth more than US$100 billion, that children should not be left an inheritance so big as to hamper their own work ethic and personal levels of motivation. “Leave the children enough so that they can do anything, but not enough that they can do nothing,” he said, adding that his own adult children “pursue philanthropic efforts that involve both money and time.”

Bill Gates has gone further, apparently leaving his three children just US$10 million each – a “minuscule portion” of his wealth.

2. Striking a balance

Although we know money can help pave a path to a better life for your offspring, how do you find the middle ground between providing a financial cushion versus flat-out spoiling them?

For some, there are always going to be concerns that any gift might be frittered away on overgenerous purchases or pursuits. For others, meanwhile, the debate doesn’t focus on what to leave their children but when.

Even you don’t want to leave your children with a lump sum they may not be mature enough, as yet, to manage properly. There can be additional concerns around safeguarding large inheritances in the face of changing families, such as divorce.

Many parents, however, want to know how much of an inheritance is the optimal amount to leave to their children and when. The answers, of course, depend on your family’s personal and financial circumstances, but many agree it should be as much as the child has been prepared for.

This shifts the emphasis away from a discussion on the amounts of money to be transferred as children hit set birthdays or milestones in life, but rather the readiness of the children to receive that money. But when is enough enough?

3. Reframing the inheritance

One way is to use money to encourage an attitude towards compassion in our children and enable a channel for them to use family resources in a way that could make the world a better place. In addition, by repositioning inheritances as support for multiple future generations (and not just themselves), it also moves you all away from a stance that is set in stone – not least as we are learning new things about the world all the time.

Through the use of philanthropy you can also help your children really understand the impact of wealth. Here, setting up a donor advised fund or a foundation can be an alternative option to leaving a large, direct inheritance and can ensure at least a portion of your estate is used for good. And smaller initial sums can also be a way to give your child autonomy in a charitable endeavour, while ensuring they remain self-motivated in their career.

Discussions around money are often, of course, emotionally loaded. Here, it can be helpful to enlist support from professional advisers, who can help you navigate the potential pitfalls and ensure that you and your family are on the same page with regard to your financial wishes.

4. Bequeathing based on results

While the media depiction of the SKI Club conjures up images of celebrities extravagantly spending or giving away their fortunes, leaving penniless children behind after their deaths, the reality is different.

As well as deciding on the amount you want – and are able – to pass on to your children, it’s important to consider the alternatives that can help incentivise a strong work ethic for a time when you’re not around to say no.

One way of doing this is by setting out a plan detailing when more money may be gifted based on a pre-agreed set of parameters. While these are probably not best graded as a ‘test’ per se, there are opportunities to release funds to your children in an approach that aligns with their income.

5. Plan to be happy

In a world where more is often considered to be better and where we strive to give our children the best chance in life, limiting or reducing the inheritance you leave behind can feel counter-intuitive. However, with increased life expectancy, considering your own future needs – including a detailed wealth plan that covers day-to-day living expenses, as well as those you don’t want to consider, such as rising healthcare costs, and any unanticipated income needs – before settling on how much your children will inherit is vital.

Whatever your concerns, priorities or wishes around the money you leave behind, it’s important to communicate these to your family and ensure the approach is in everyone’s best interests, and there are multiple mechanisms to do this.

It’s also a conversation that I and my colleagues on the private banking team – as well as our wealth planners – have been pulled into, as we can help to facilitate the conversations and also be the ones that appear to be encouraging you to err on the side of caution. And we are equally happy sitting down separately with your children and helping them with financial education and where the emphasis should be in the future. All we want to ensure is that the approach you take is one that aligns to your wishes. It’s you who is the giver.

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how wealth planning can help them achieve their financial goals and objectives, or call +44 (0)1624 645000 to speak to our client services team.


If you would like to find out more about how we can help you with retirement planning or more general wealth planning support, please contact us on the same number as above, or complete the contact us form using the link below.

Sources: (1) Business Wire; (2) CNBC; and (3) The Independent.

Any examples of investments and structures used are for illustrative purposes only. The inclusion does not constitute an invitation or inducement to buy any financial investment or service. None of the content constitutes advice or a personal recommendation. Individuals should seek professional advice, based on their jurisdiction and personal circumstances, before making any financial decision.

about the author

Carlo Lourenco

Carlo Lourenco

Carlo joined the London office in 2010, and has over 20 years’ experience managing the complex affairs of high-net-worth clients. He takes pride in developing close relationships with his clients and intermediaries by listening and always placing their interests and needs at the forefront of his thinking.


Prior to joining Nedbank Private Wealth, Carlo worked for 10 years at Coutts & Co.  He is a Member of the Chartered Institute for Securities & Investment.

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