A man who hopes to 'die with zero' says inheritances aren't the best way to pass wealth to your children

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• Inheritances are useless by the time they're received, writes Bill Perkins in "Die with Zero."
• Inheritances peak around age 60, after people are established and already looking at retiring.
• Gifting money earlier when it will do the most good is a smarter move, Perkins writes.

Author and former Wall Street trader Bill Perkins isn't planning to leave anything to his children as an inheritance. 

In his book, "Die with Zero," he explains how he hopes to spend all the money he has before he dies. He doesn't intend to leave a penny of his retirement funds for his children.

However, that doesn't mean he's not planning to help them financially. Perkins, who has two children, writes that he'd rather give them money when they need it instead of holding onto it until they're older. And he thinks anyone else who wants to build a financial legacy for their family should consider doing the same.

In most cases, inheritances come too late to be meaningful

With lifespans increasing, and both parents and children living longer,  inheritances are coming later and later.

"For any income group you look at, the age of 'inheritance receipt' peaks at around 60. That's a natural result of the fact that the most common life span is 80 and the most common age gap between parents and children is 20," Perkins writes, citing a report from the Federal Reserve. 

For most people, 60 isn't when that money would make the most impact. The average net worth in this age group, in households headed by someone aged 55 to 64, is over $1 million. People in this age group have already likely planned for retirement on their own, sent children to college, and even paid off a mortgage. For that reason, Perkins writes that the money could be better used earlier in life.

Inheritances have largely, and perhaps unintentionally, become retirement funds for middle-class retirees above all else. "Inheritances used to go more toward mid-career, mid-life expenses like kids, and now they're likely going more toward concerns of people in their 50s, which is saving for retirement," Lincoln Plews, a research analyst at United Income from Capital One, previously told Business Insider.

Giving money sooner than later can benefit children both short- and long-term

Perkins cites the example of one woman who struggled for years financially while raising her own children, only to receive an inheritance at 49 once her mother died. In an interview with one of Perkins' colleagues, this woman said, "It would have been more valuable a lot earlier."

Those in their 50s and 60s have had years to start saving, investing, and probably have established a life for themselves. Meanwhile, younger generations, including millennials and Gen Z, face large amounts of student debt, a tough job market, and high housing prices. They're at a stage in their lives where an inheritance could not only allow them to build a life, but also free up money to start saving for their own retirement funds, or start a family of their own. 

Polling his Twitter followers, Perkins writes that over half of the 3,500 voters chose the ages 26 to 35 as the best age to receive an inheritance. That's the opposite of when people actually receive them in their 60s. By that point, the money is too late to use when it's needed, and doesn't have as much time to take advantage of compound interest and grow in the recipient's lifetime.

This pattern of later-in-life inheritances is something that Perkins hopes his "Die with Zero" strategy reverses.

"When it comes to the kids, 'Die With Zero' shows thoughtfulness by having put your kids first, which you do by thinking deliberately about how much to give them and then doing so, before you die," he writes. 

This article was originally published in May 2021.