STEVE INSKEEP, host:
On Fridays, we talk about your money, and today, we're going to talk about dividing it up after you're gone. It turns out that's an extremely controversial topic. Knight Kiplinger discovered that when he discussed it in his "Money and Ethics" column in the magazine, which bears his own family's name - Kiplinger's Personal Finance.
Welcome to the program.
Mr. KNIGHT KIPLINGER (Editor-in-Chief, Kiplinger's Personal Finance Magazine): Good to be with you, Steve.
INSKEEP: So what was your suggestion?
Mr. KIPLINGER: A woman wrote and said can I divide the bequests unequally among my children, according to their need? My daughter went into a very lucrative career and made a lot of money. My sons are highly responsible, but chose less lucrative careers. I think she said one was in social work and another was a school teacher. Can I divide my money unequally? Is it ethical to do so? And I said absolutely, it's ethical to do so. This isn't a matter of ethics. Family relations could be another matter; you might be opening a can of worms. And I got lot of hostile mail about this, Steve.
INSKEEP: What sort of mail?
Mr. KIPLINGER: Financial planners and a state attorney said, oh no, divide your money equally among your children regardless of their circumstances in life -their need - because if you don't, after you're gone there'll be a lot of sibling rivalry and resentment. You know, mom always loved you more than she loved me, that sort of thing. So they said, avoid this by dividing it equally.
Well maybe that makes good sense from a family relation's point of view, but I'm writing an ethics column. I pointed out to her that you can leave your money to anybody you wish. You don't have to leave any money to your children at all. You can leave a 100 percent to charity. A lot of people think that inheritances are corrupting, especially large inheritances.
INSKEEP: Warren Buffet has given away most of his money rather than giving it to his children.
Mr. KIPLINGER: That's right. Now, I see this most among people who were fabulously rich. They can leave crumbs to their children, but their crumbs would still be a large inheritance. I don't think Warren Buffet's children are going to want for anything in life. And people of more modest means also leave a third or a half of their estate to charity and then divide the rest among their children.
INSKEEP: Are there ethical issues that can be raised as you're deciding whom to give money to in your will?
Mr. KIPLINGER: There are ethical issues. Let's talk about the children first. The people who sent me hostile letters saying, no, always divide the money equally among your children, posited certain things that weren't in the letter. They said, well, maybe the sons are moochers; they're unsuccessful. Why are you penalizing your successful daughter by leaving her less?
That wasn't in the woman's letter. She said all of my kids are responsible; I love them equally; they all get along. But my sons because of the less remunerative careers they chose need the money more. I suggested - and everybody agrees - talk to your children first about this. Talk to your daughter in advance, say, you know, you've done very well in life, Mary(ph), you don't need as much money as your siblings do. Would it be alright if I left you less in my will? Or maybe you could designate a favorite charity that I could make a donation to in your honor.
INSKEEP: Now, is there a danger, though, if it had been a slightly different situation like one that your letter writers described where you are rewarding bad behavior by the way that you give money in your will?
Mr. KIPLINGER: I would never advise that a parent reward bad behavior during life or after death. There are parents who bail out irresponsible children would gifts during a lifetime and leave them a sympathy bequest when they died because they say, oh, you know, my son is kind of a sorry case; he'll need the money. That is an incentive to do nothing in life. It zaps initiative or rewards bad behavior. And I wouldn't recommend that in any case.
INSKEEP: For some reason as you talk, I'm reminded of the biblical story of the prodigal son. Father has two sons. One is very responsible and helps with the family business. The other goes off, spends half his inheritance before he's even - his father is even dead - then comes back when his broke, asks for more.
Mr. KIPLINGER: The father was a sucker.
(Soundbite of laughter)
Mr. KIPLINGER: You know, it's funny, Steve. In an ethics column, very often the ethical position is the tough love position. Very often, somebody says, boy, that recommended advice of yours was really tough. Don't you have any compassion? Sometimes ethics and principles fights with compassion.
INSKEEP: Knight Kiplinger of Kiplinger's Personal Finance.
Thanks very much for coming by.
Mr. KIPLINGER: Good to be with you.
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