Even 1 percent of a fortune this size is still an enormous sum, but Gates says handing kids the whole thing just gets in their way. He’s part of a growing club of billionaires deciding their children should build their own paths.
Most of the Gates fortune has been set aside for philanthropy, not for Phoebe, Jennifer or their brother Rory. Bill Gates and Melinda French Gates have said they don’t plan to leave their three children the bulk of their wealth, with each expected to receive a fixed amount of roughly 1 percent.
Gates puts it bluntly: “It’s no favor to kids to have huge sums of wealth.” He argues that excessive inherited money “distorts anything they might do as they create their own path.”
His daughters seem to have taken the point. Phoebe Gates is an entrepreneur, and Dr. Jennifer Gates Nassar is a pediatrician.
Gates isn’t alone. Warren Buffett, his partner on the Giving Pledge, has arranged for 99 percent of his wealth to flow into philanthropic foundations, and his line on it is well known: “Leave children enough so they can do anything but not enough that they can do nothing.” More than 240 billionaires have signed that pledge, committing at least half their fortunes to charity.
The logic behind the trend rests on two figures the article credits to the Williams Group and the Family Business Institute: roughly 70 percent of wealthy families lose their fortune by the second generation, and about 90 percent by the third.
Others go further with the language. Daniel Craig calls inheritance “quite distasteful” and says to “get rid of it or give it away before you go.” Laurene Powell Jobs, Steve Jobs’s widow, says, “I’m not interested in legacy wealth building, and my children know that,” adding, “If I live long enough, it ends with me.”
None of this means the kids end up with nothing. They still inherit elite educations, famous surnames, powerful connections and the freedom to take risks most people can’t afford. What they’re less likely to get is billions in unrestricted cash.
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