My first goal in building wealth is to create the freedom so I can work because I want to, not because I have to. My secondary goal, and to be honest it's a distant second, is to leave some money for my kids when I'm gone via an inheritance. I emphasize those priorities because it's important that we take care of ourselves before we worry about our kids financially. Remember, you can't take out loans for your retirement. But you can for a college education, etc.

Anyway, Selenid and I do want to build enough to create some element of generational wealth for our kids and future heirs. And looking at our net worth progression over the past 5+ years, we are on trajectory to do just that.

But I have some real concerns. Like the old saying goes, wealth is built by the first generation, enjoyed by the second, and lost by the third.

I want my kids and my kids' kids to know how to work hard and build wealth on their own. And leaving them “free money” in the form of an inheritance could certainly teach the wrong lesson and undermine this goal.

This is where structure starts to matter more than intentions. Values don’t survive ambiguity very well. At some point, those ideas have to be translated into something concrete — actual decisions around wills, trusts, and guardianship — rather than left as conversations or assumptions.

For physicians who want a straightforward way to think through that without immediately turning it into a complex legal project, tools like Trust & Will can help clarify the right estate structure for their situation.

I think I have a solution though…

My inheritance solution

I want to create a net worth threshold that my kids have to cross in order to receive their inheritance.

The point isn’t to control outcomes from beyond the grave or engineer every decision perfectly. It’s to remove uncertainty and make expectations clear. When values are paired with structure, it becomes much easier for the next generation to take responsibility without confusion or conflict.

That's right. My kids won't be able to use their inheritance for the initial growth phase of their wealth building. They are going to need to do that on their own. Only after achieving this baseline level of wealth will they be able to access what we leave them to grow it even more.

And, with their initial wealth plus their inheritance, they will be very well set up to leave an inheritance for their kids. Hopefully with the same stipulations.

One exception

I would include one exception. That they could access the assets if they had some emergency that met certain criteria.

This would include medical emergencies and the like. But only if they couldn't reasonably pay for it otherwise. I guess without them having to go into high interest debt.

And no, education would not count. Hopefully that won't be an issue as they should be well past their final graduation by the time they are thinking about my inheritance. But you never know. In any event, they can use what we have saved in their 529s and other college savings, but otherwise they're on their own. I do feel like it's important for them to understand that they have a responsibility to cover their education and make it worthwhile.

The logistics of this plan

The only way that I can see that would make this work is by using a trust with a custodian. The trust is the easy part. Basically, our assets would just transfer there instead of to our kids or other beneficiaries.

The hard part would be finding the right custodian. Because a lot of the decisions would be somewhat subjective. For instance, what type of “emergency” would constitute using the inheritance before a certain net worth is reached. And they would have to be on board with this whole plan to begin with and not impacted by any of the emotions that our kids may feel upon learning this plan.

I don't have this person picked out yet. Nor, honestly, do I have any great candidates.

What is the net worth threshold?

My goal with all of this is to leave the kids an inheritance. But I don't want it taken for granted. And that is what can happen if it comes without any hard work on their own part to achieve it. Hence my desire for a threshold to begin with.

But the point is also not to have them reach financial freedom on their own just to then receive the inheritance.

Ideally it would serve as a significant boost to take them from the early to mid stages of the financial freedom journey towards the end. While also giving them the flexibility to leave an inheritance for their kids.

That's why my chosen threshold is a net worth of $1.5 million, indexed to inflation over the years.

This is a nice sweet spot where they will already be on a good path to financial freedom and will obviously have had to work hard to get there and make some good, educated choices. But, while $1.5 million is a nice nest egg, I want more for them. And our inheritance will give them the great ability to do that by making more wise investment choices.

But is this too harsh?

I say no.

I look at it as a way to ensure my kids learn and use the appropriate personal finance skills that I value and they still get a nice boost of the generational wealth created by me and Selenid.

Win-win.

The downside is obviously what happens if they never reach this chosen threshold. Then, while they may not be necessarily struggling, they still aren't doing as well as we would like. Plus they get no help from us.

So maybe I'll throw an age threshold on there as well. But honestly I'm not 100% sure about that part yet.

And what does Selenid think about this plan?

Actually, I haven't even told her yet. But if I had to guess, I don't think she'll like it.

See, Selenid grew up with much more meager means than I did. And she truly built herself up from that. As a result, she leans more towards trying to give our kids every advantage they can have. Which I totally understand and a part of me wants as well. But we do both agree that they need to learn self-sufficiency.

Figuring out how to balance those two things is where it gets tricky. I've seen things go bad at both extremes.

Our responsibility as parents

Ultimately, the success that our kids have in relation to this inheritance plan is really our responsibility. The way that we teach them about money, hard work, smart personal finance habits, intentional spending, and build the right money habits in them will dictate how they do.

If we succeed, they should have no problem reaching this threshold. But, to be honest, if we succeed in teaching them these skills and values, they probably would be fine if we gave them their inheritance without the threshold anyway. It's a bit of the chicken and the egg.

However, I do think there is value in having to work for something. Even if it seems arbitrary like this. Like Shaq says to his kids, “We're not rich, I am.” I'm paraphrasing but you get it. This is a way for them to truly earn what we want to share with them.

That way it really becomes theirs.

Teaching kids about money is really tough though. These posts can help:

• 6 Reasons Doctors Should Save and Invest for Yourself Before Your Kids
• Should I Give My Kids an Allowance?
• Monopoly and Life: Important Lessons for Real Estate Investors (& Kids)
• 3 Reasons I Will Encourage My Kids to Go into Medicine

What do you think? Do you like my inheritance plan? Or is it too far out there? Do you plan to leave money to your kids? How? Let me know in the comments below!