Why don’t Americans leave their inheritance to their children but donate it all to charity?

(If you are a poor person, don’t do it for more money.) In China, the ancient family culture and the flesh-and-blood affection that is thicker than water have given people a natural and deep-seated feeling of protection for their family members.

As the saying goes, "Don't let the wealth flow to others." It seems that leaving the inheritance of parents to their children is an uncontroversial behavior. People never discuss "whether to leave it to their children", and they only discuss it when they have multiple children.

It’s time to discuss “how to distribute inheritance to children.”

But abroad, it seems that minds are much more open-minded.

Bill Gates, the world's richest man, has publicly declared that he will donate all his property to the Bill and Melinda Gates Foundation under his and his wife's names, and will not leave a penny to his children.

The stock god Buffett also announced in his will that he would donate 99% of his personal fortune of more than US$30 billion to charity to provide scholarships for poor students and fund medical research in family planning.

Many years ago, Buffett made it clear to his children: "If you can get a cent from my inheritance, you are lucky." So, why do these richest Americans give away all their property?

Are you willing to leave it to your own children?

How much hatred is this?

Some more idealistic people explain the reason this way.

Paying attention to the independence of children. Americans generally pay more attention to the independence of their children. It is unfair for children to inherit such a huge wealth, and it will hinder them from doing what they want to do. Children's own lives have nothing to do with their parents' lives.

Americans pay more attention to cultivating their children's ability to create wealth than giving the wealth itself to their children.

Money will eventually run out, but once you have the ability to create wealth, you no longer have to worry.

Preventing Uneven Distribution from Relative Relationships Many American families have two or more children, and the distribution of parents’ inheritance will naturally become a problem.

In the eyes of Americans, family affection is far higher than material wealth, and parents will not easily let material things override feelings.

Therefore, American parents choose to draw material boundaries with their children at the same time, so that their children understand from an early age that their parents' wealth does not belong to them.

The rich have their own social responsibilities. In the eyes of Americans, the reason why the rich can accumulate a lot of wealth is that in addition to personal efforts, the fair opportunities that society provides for people to get rich cannot be ignored.

Therefore, wealthy Americans have a responsibility to society, that is, when they have money, they should not spend their time living alone, but should give back to society and help others.

Other more realistic people explain the reason this way.

Avoiding high inheritance taxes The inheritance tax in the United States is very high, up to 55%, which means that if rich people leave their inheritance to their children, half of the money goes directly into the government's pockets.

However, U.S. tax law mentions that the portion of an estate that is established and operated solely for religious, charitable, scientific research, literary and educational purposes is fully tax exempt.

Property transfer through charity Rich people transfer their property to future generations by establishing a charitable prepayment annuity trust.

A charitable annuity trust is a long-term trust fund in which the settlor invests a sum of money and then makes regular payments to the charity. After a number of years, the balance of the trust fund is handed over to a non-charitable beneficiary, usually the settlor's descendant.

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The money earned through charities is usually rich. The assets of a wealthy person include cash, stocks, real estate, etc. He injects all these assets into the charity fund he established and is the actual controller.

Then the money the charity makes from the stock is tax-free.

Although charities need to use part of the money for charitable projects, compared with inheritance tax, it is still much less!

For example, if you set up a charitable fund worth US$20 million, and then pay US$1 million to the charity every year for 20 years, compound interest will be calculated based on the current interest rate of 1.4%. In 20 years, the actual payment will be US$26.4 million (current

$20 million (equivalent to $26.4 million 20 years later) completely consumes the nominal $20 million charitable fund, so the IRS does not tax this charitable fund.

But in actual operation, if there is an average annual return rate of 5%, the US$20 million will increase to US$53.06 million in 20 years, and the children will receive US$26.66 million; if the average annual return rate reaches 10%, the charity will increase in value after 20 years.

The value of the fund will increase to US$1.34 trillion, and children will receive more than US$1 trillion.