By Finlo Rohrer BBC News Magazine Nigella Lawson is the latest wealthy celebrity to vow that she will not pass on all her money to her children when she dies. But why should earthly wealth be passed on?
By Finlo Rohrer BBC News Magazine Nigella Lawson is the latest wealthy celebrity to vow that she will not pass on all her money to her children when she dies. But why should earthly wealth be passed on?
On cold mornings in January, it's easy to dream of an inheritance.
On cold mornings in January, it's easy to dream of an inheritance.
Who wouldn't rather stay in bed in the knowledge they had just inherited a million from dear departed Auntie Doris rather than toil away another day?
Who wouldn't rather stay in bed in the knowledge they had just inherited a million from dear departed Auntie Doris rather than toil away another day?
Yet the media is full of stories about the rich and famous deciding against leaving all of their wealth to their children.
Yet the media is full of stories about the rich and famous deciding against leaving all of their wealth to their children.
FAMOUSLY LEFT OUT Paris Hilton disinherited by hotel magnate Barron Hilton Joan Crawford gave nothing to two eldest childrenMarlon Brando cut out a grandchild and adopted sonPlaywright Eugene O'Neill left nothing to daughter and son Dame Anita Roddick said before her death she'd give away her fortune Nigella Lawson has vowed not to do it. Anita Roddick was also against it. And last year one aristocrat was reported to have left his son nothing but a watch.
FAMOUSLY LEFT OUT Paris Hilton disinherited by hotel magnate Barron Hilton Joan Crawford gave nothing to two eldest childrenMarlon Brando cut out a grandchild and adopted sonPlaywright Eugene O'Neill left nothing to daughter and son Dame Anita Roddick said before her death she'd give away her fortune Nigella Lawson has vowed not to do it. Anita Roddick was also against it. And last year one aristocrat was reported to have left his son nothing but a watch.
But with rocketing house prices in the UK, the question of what will happen to your money after you die as more important than ever.
But with rocketing house prices in the UK, the question of what will happen to your money after you die is more important than ever.
Professor Karen Rowlingson has investigated attitudes to inheritance.
Professor Karen Rowlingson has investigated attitudes to inheritance.
"We found that people in their 50s were the least keen on the idea of leaving stuff to their children. Partly those people felt they had already helped their children and it was time to think about themselves. They want to enjoy life a bit.
"We found that people in their 50s were the least keen on the idea of leaving stuff to their children. Partly those people felt they had already helped their children and it was time to think about themselves. They want to enjoy life a bit.
"People in their late 70s and 80s had a much more traditional attitude. They were being careful with money and wanted to pass it on."
"People in their late 70s and 80s had a much more traditional attitude. They were being careful with money and wanted to pass it on."
Longer lifespan
Longer lifespan
This can be interpreted as a post-Baby Boom shift in attitude. Those born after the war have grown up in what is often described as a more selfish era.
This can be interpreted as a post-Baby Boom shift in attitude. Those born after the war have grown up in what is often described as a more selfish era.
But there are practical elements too. Longer lifespans, uncertainty over pension provisions and the high costs of social care mean many approaching old age are realistic enough to know they may have to eat into the inheritance.
But there are practical elements too. Longer lifespans, uncertainty over pension provisions and the high costs of social care mean many approaching old age are realistic enough to know they may have to eat into the inheritance.
Paris Hilton is missing out on some of her inheritanceMany will sympathise with the Nigella Lawson approach. After all, doesn't inheriting a vast sum - or even the prospect of it - have a corrosive effect on the young? Would the Marquess of Blandford have had such a chequered life if he hadn't had the prospect of being a millionaire? Why work hard when one's nest is already fully feathered?
Paris Hilton is missing out on some of her inheritanceMany will sympathise with the Nigella Lawson approach. After all, doesn't inheriting a vast sum - or even the prospect of it - have a corrosive effect on the young? Would the Marquess of Blandford have had such a chequered life if he hadn't had the prospect of being a millionaire? Why work hard when one's nest is already fully feathered?
And yet, says Professor David Blanchflower, inheriting money early in life makes you more likely to run a business and be self-employed. The correlation continues even into middle age.
And yet, says Professor David Blanchflower, inheriting money early in life makes you more likely to run a business and be self-employed. The correlation continues even into middle age.
"You need money to start a business so if you haven't got it, that prevents you," he says.
"You need money to start a business so if you haven't got it, that prevents you," he says.
But there is also a correlation between having a family member who is in business, and going into business yourself. And if your mother is a wealthy television chef and author, you'll benefit from an expensive formal education, a wealth of contacts and first-hand experience of how to get ahead. Inheritance is more than just monetary.
But there is also a correlation between having a family member who is in business, and going into business yourself. And if your mother is a wealthy television chef and author, you'll benefit from an expensive formal education, a wealth of contacts and first-hand experience of how to get ahead. Inheritance is more than just monetary.
"You get an ethos, you know about how to run businesses," says Prof Blanchflower. "It takes an awful lot of money to make people stop and give up."
"You get an ethos, you know about how to run businesses," says Prof Blanchflower. "It takes an awful lot of money to make people stop and give up."
Primogeniture principle
Primogeniture principle
Coverage of inheritance tax reform may give the impression that the public supports untaxed inheritance, but there are those that differ.
Coverage of inheritance tax reform may give the impression that the public supports untaxed inheritance, but there are those that differ.
Legendary investor Warren Buffett has said that inheritance unfettered by taxation is like "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics".
Legendary investor Warren Buffett has said that inheritance unfettered by taxation is like "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics".
Economist Dr Nick Bloom has studied the management of family firms where the father passes the business on to the eldest son.
Economist Dr Nick Bloom has studied the management of family firms where the father passes the business on to the eldest son.
It's wrong that some start off with billions before they lift a finger and others start off with nothing Dane Clouston "We looked at 5,000 companies and we found that around a third of medium-sized manufacturing firms were family owned. In about half of them the eldest son was the CEO. They are very badly managed."
It's wrong that some start off with billions before they lift a finger and others start off with nothing Dane Clouston "We looked at 5,000 companies and we found that around a third of medium-sized manufacturing firms were family owned. In about half of them the eldest son was the CEO. They are very badly managed."
Management skills are not genetic. But this primogeniture principle has a powerful grip, a remnant of Britain's feudal past. And the tax regime means an eldest son inheriting a firm is best off keeping it rather than selling up.
Management skills are not genetic. But this primogeniture principle has a powerful grip, a remnant of Britain's feudal past. And the tax regime means an eldest son inheriting a firm is best off keeping it rather than selling up.
Aside from the practicalities of inheritance, that it puts people in positions they do not merit, there is a philosophical side.
Aside from the practicalities of inheritance, that it puts people in positions they do not merit, there is a philosophical side.
Lawson says: "I argue with my husband Charles, because he believes that you should be able to leave money to your children. I think we'll have to disagree."
Lawson says: "I argue with my husband Charles, because he believes that you should be able to leave money to your children. I think we'll have to disagree."
Her implication is that there is a philosophical case for not giving money to your children.
Her implication is that there is a philosophical case for not giving money to your children.
Ugly dynamics
Ugly dynamics
Dr Stuart White, head of the Public Policy Unit at Oxford University, is an advocate of citizen's inheritance, moving the process of inheriting money away from families deciding who gets what, to redistribute wealth.
Dr Stuart White, head of the Public Policy Unit at Oxford University, is an advocate of citizen's inheritance, moving the process of inheriting money away from families deciding who gets what, to redistribute wealth.
"Distribution of inherited wealth is very unequal and correlated with social class," he says. "It tends to compound other class-related inequalities. Unpredictability is another factor in that under the familial mode of inheritance you don't necessarily get an inheritance when you are starting out in life, which is arguably a point where you need some kind of financial platform to think creatively."
"Distribution of inherited wealth is very unequal and correlated with social class," he says. "It tends to compound other class-related inequalities. Unpredictability is another factor in that under the familial mode of inheritance you don't necessarily get an inheritance when you are starting out in life, which is arguably a point where you need some kind of financial platform to think creatively."
There may also be attempts to control behaviour: "It's 'if you pursue a sensible career, darling, you will be in my will, if you don't you won't be'. And if you base inheritance fully on the family then a lot is at stake and it can lead to ugly family dynamics."
There may also be attempts to control behaviour: "It's 'if you pursue a sensible career, darling, you will be in my will, if you don't you won't be'. And if you base inheritance fully on the family then a lot is at stake and it can lead to ugly family dynamics."
Dane Clouston has campaigned for three decades to allow everybody to have just such a citizen's inheritance, and has persuaded the Liberal Party, the small rump leftover from the creation of the Lib Dems, to adopt it as policy.
Dane Clouston has campaigned for three decades to allow everybody to have just such a citizen's inheritance, and has persuaded the Liberal Party, the small rump leftover from the creation of the Lib Dems, to adopt it as policy.
"In a capitalist democracy, every UK-born British citizen should have some capital at 25 as well as a vote at 18, and it should be financed by taxes on inheritance.
"In a capitalist democracy, every UK-born British citizen should have some capital at 25 as well as a vote at 18, and it should be financed by taxes on inheritance.
"It's wrong that some start off with billions before they lift a finger and others start off with nothing. I'm all for people having an inheritance, I don't want the tax to be outrageous. I have children, I expect them to receive something but they should be happy to pay a proportion of that."
"It's wrong that some start off with billions before they lift a finger and others start off with nothing. I'm all for people having an inheritance, I don't want the tax to be outrageous. I have children, I expect them to receive something but they should be happy to pay a proportion of that."
Persuading people in the current climate to pay more inheritance tax may be a leap too far, but the change in attitudes to inheritance could prove interesting.
Persuading people in the current climate to pay more inheritance tax may be a leap too far, but the change in attitudes to inheritance could prove interesting.
Rocketing house prices may have left one generation with a windfall, but the next needs more of a parental leg-up than ever. And for the rich, striking a balance between giving their children enough to get a start, and not giving them too much, remains the key.
Rocketing house prices may have left one generation with a windfall, but the next needs more of a parental leg-up than ever. And for the rich, striking a balance between giving their children enough to get a start, and not giving them too much, remains the key.
