As Baby Boomers are projected to transfer trillions of dollars to their heirs over the next two decades, a growing sentiment among millennials and Gen Z is the desire to access these inheritances earlier in life. Entrepreneur and author Bill Perkins, in his book "Die with Zero," contends that parents with the means should consider distributing their wealth during their children's young adulthood, rather than waiting until after their death.
Perkins, in a conversation with Noel King on "Today, Explained," explained his philosophy that the timing of an inheritance can significantly impact its utility. He argues that the optimal window for heirs to convert capital into meaningful life experiences is between the ages of 28 and 33. This period, he suggests, represents a peak in mental acuity and physical capability, allowing for the greatest return on investment in terms of personal fulfillment and adventure.
He posits that as individuals age, their capacity to fully leverage wealth for new experiences diminishes. While acknowledging the common parental instinct to ensure financial security through compound interest over time, Perkins challenges the underlying purpose of wealth transfer. He uses the analogy of giving a rattle to a 30-year-old, suggesting that money's purpose is to facilitate a fulfilling life, not merely to accumulate zeros.
Perkins advocates for parents to aim to "get as close to zero as possible" with their own assets, recognizing that life's uncertainties make this an extreme goal. He frames early inheritance as a "gift of love" and a "gift of opportunity," enabling heirs to have greater choice and experience during their most vital years. He notes that while some parents choose to provide for their children through education or other means and expect them to forge their own paths, those who intend to leave a financial legacy might find that an earlier distribution maximizes its positive effect.
This approach, he suggests, can be a difficult conversation for families, often fraught with parental reluctance to discuss mortality and filial concern about appearing greedy. However, Perkins believes that for those who intend to leave a financial legacy, a thorough consideration of the timing will lead to the conclusion that an inheritance can be more impactful when distributed during a child's prime rather than as a bequest after death.