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Shutting Out the Kids from the Family Fortune

posted 13 years ago by xylonian-1
3 replies | jump to latest

This article reminded me of this movie....

http://finance.yahoo.com/family-home/article/112715/shutting-kids-out- family-fortune-wsj?mod=family-kids_parents

Shutting Out the Kids from the Family Fortune
by Robert Frank
Tuesday, May 10, 2011

Want to avoid raising spoiled kids?

Consider the Wellington Burt School of Wealthy Parenting.

Wellington R. Burt was a rich timber baron from Saginaw, Mich. He died in 1919 with a multimillion-dollar fortune -- one of America's largest at the time.

Yet rather than risk messing up his kids lives with a huge inheritance, he created an unusual will.

He stated that his fortune would be distributed to the family -- but only 21 years after his grandchildren's death.

[More from WSJ.com: Avoiding Stumbles With 'Living' Trusts]

His children and grandchildren weren't entirely deprived. Burt gave his "favorite son" $30,000 a year but the rest of his children got allowances roughly equal to those he gave his cook and chauffeur, according to the Saginaw News.

"I'm pretty sure he didn't like his family back then," said Christina Cameron, an heir and a great-great-great grandchild of Burt's.

Now that it's 21 years since the death of the last grandchild, the fortune is finally being turned over to Cameron and 11 others, including three great-grandchildren, seven great-great grandchildren and another great-great-great grandchild. The fortune is valued at more than $100 million. (She'll get a little more than $2.6 million, since those further up the family tree get more under a master agreement).

Saginaw County Chief Probate Judge Patrick McGraw said the estate is "one of the most complicated research projects" he's faced in his 12-year career in Saginaw.

Of course, skipping a generation is not unusual among rich parents who want to send a message to their kids (but somehow not their grandkids). Generation-skipping trusts and other estate-planning structures have been around for ages.

[More from WSJ.com: Is Donating to Charity Still OK?]

But Burt's will takes kid-skipping to a new, almost punitive level. Who knows, maybe his kids and grand-kids were better off for the lack of inheritance, or maybe the money would have allowed them to lead fuller, happier lives. We'll never know. It would be interesting to compare the lives of his new heirs with those who were shut out.

What do you think of Burt's School of Parenting?

A Royal Wedding!!!! http://www.youtube.com/watch?v=5Rrt8UppVxc

[–] KingCobra686 9 years ago

I understand what he was going for, but isnt he just delaying his concerns for a couple generations and spoiling his great great grandchildren instead of his children?

[–] skiddoo 8 years ago

Yep. If he had really wanted them to be good people he'd have given the money to charity. That is Bill and Melinda Gates' plan.

This highlights a major flaw of the "wait 20 years before reading the will" plot lines. How can you probate the will within the limit of time set by law? Even if there hadn't been any state or federal taxes on estates then, surely you never could put off a reading of the will for decades because of the attendant legal problems that would arise, including the laws in 1907 versus 1927. According to Wiki, the modern federal estate tax went into effect in 1916, so would it apply or not if the will wasn't read and the estate wasn't probated until after it was passed?

It's nice to think you could have your big ole SPOOKY ooooooooh!! haunted house just sitting there moldering away for twenty years but there would have to be an arrangement to care for it and that would have involved payments made by your estate. If you had any investments, whoever looked after them would have to be paid. Was there a trust fund to do that? Was there an inventory done after the death? If not, surely family members or a caretaker could have looted the mansion then burned it down to destroy the evidence. What would have happened if someone had wanted to put in a subdivision, expressway, runway, shopping center, etc and your property was condemned, with the will still unread? A lot can change in twenty years. If it had been 1910 and 1930 it would have been even more difficult because stocks and land prices would have dropped and there might not have been enough money to pay agreed upon amounts to caretakers and lawyers. As it was, the span included the economic boom and bust around WWI.

I'm not an expert on legalities in 1907 or any other time but surely not probating the will for that long isn't a real life solution. A really knotty probate might take many years but that doesn't mean you can wait twenty to even read the will. This was 1907-1927 America not Dickensian Britain. Our estates and lawsuits weren't in the courts for generations before they were settled.

[–] MsELLERYqueen2 7 years ago

Not sure what this has to do with the movie. The young woman didn't know that she would inherit this fortune. Someone else was out to get her.

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Jim Hutton (1934-79) & Ellery Queen = 