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
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?
Yet the media are full of stories about the rich and famous deciding against leaving all of their wealth to their children.
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 children
Marlon Brando cut out a grandchild and adopted son
Playwright Eugene O'Neill left nothing to daughter and son
Dame Anita Roddick said before her death she'd give away her fortune
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.
"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."
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.
Many 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 inheritance
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.
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."
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".
Economist Dr Nick Bloom has studied the management of family firms where the father passes the business on to the eldest son.
"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.
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."
Her implication is that there is a philosophical case for not giving money to your children.
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."
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.
"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."
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.
Below is a selection of your comments.
I think it is safe to say that Nigella Lawson - wife of advertising magnate, daughter of former chancellor of exchequer and of a "socialite and heiress", and sister of a former editor of the Sunday Telegraph and Spectator - is well aware that money is just one of the things of value which one can give to ones children to help them make their way in this world.
Paul McGlade, London
Most of us don't live in the wealth bracket discussed in this article. But where wealth and inheritance becomes relevant for most of us is the whining of home owners asked to pay their share of care-home costs in their old age, by selling their home, 'depriving' their middle aged children their share of unearned unmerited cash. Why they think I, as the taxpayer, should subside them so that two or three individuals should inherit thousands is beyond me. But then most money related greed, and the grief it causes, also baffles me.
Duncan Bowers, Zurich, Switzerland
When my grandfather died, at his wake, we were told about his achievements in life. I was shocked to hear that he had set up several housing associations with his own money during his lifetime (one of which was apparently worth in the region of £30m at the time of his death). However, he didn't leave a huge amount to my parents, aunt and uncle. Most of what he did have went to charitable foundations and so on. I am proud that he did that, even though sometimes I wish that I had more money myself. I would rather that those sums were used to benefit people that really need it rather than pad our bank accounts when we are more than capable of earning what we need to survive.
While some may have a problem with their children inheriting their wealth, many more will object to their wealth being forcibly confiscated and re-distributed to loads of strangers (i.e. taxed) - they will just find a way to give their assets to their children before they die, to avoid this. Where the money goes should be up to the person whose money it is; some may choose their children, others may choose the local cat shelter. Anyone who objects to the inheritance principle has the freedom not give the money to their children, just as Nigella Lawson has chosen to.
Richard Gosling, Aberdeenshire, Scotland
How does an offspring who, through no fault of his own, earn little more than the basic wage, ever afford a house if he cannot inherit the parental home? This is enough of a worry when contemplating one's own future care needs, let alone the ethics of inheritance.
Julia Taylor, Westbury, Wiltshire
"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." So now everyone should now get paid money for doing nothing? I wouldn't work hard to give my hard earned money to some unknown low lifes, who might just booze or gamble it away.
Taxation for the good of society is one thing, giving it away to all and sundry for doing nothing well certainly not. No one gave me anything when I was 25 or younger. If I want to leave MY money, to MY much loved children, then that should be MY right. If less fortunate people want money, they should work hard and EARN it, like we did as a family.
Shaun Hollingworth, Rotherham
All this stuff about a citizen's inheritance is so old. One of the Mills (J or his father) suggested it in about 1860. So the idea may be fine and egalitarian but obviously has never caught on with the legislating class.
Mike Harper, Northampton
Nigella's a fine one to talk. One wonders where she'd be today without that surname she inherited.
Inherit from wealthy parents? Dream on. I have never had any expectation of an inheritance and have therefore not had that mid-life boost to the coffers which so many of my peers have very obviously had and not mentioned.
As to those relatively well-off potential inheritees who bemoan the fact that they might have to pay 40% tax on 'their' (usually arrogantly assumed) inheritance, I would point out that said monies are a free gift, would be completely unearned and should therefore command MORE tax than my fully earned income. Any salary increase or 'bonus' that I earn at work is taxed at 40%, so 40% on inheritance seems a tad soft to me.
Dave Bethell, Bradford on Avon
"Inheritance" or "how the rich stay rich". By the time my parents die, I will probably be in my 60s or 70s. Is this the leg up into being self-employed I need? At retirement age? Current ideas and values on inheritance need a long hard look to see whether they still make any sense in a society where people regularly live into their 90s.
Chris Hodder, London
Nigella, Anita Roddick etc.. have built up their own fortunes and made their own choice. Taking that choice away would remove a large part of the satisfaction of getting to the point where you have enough to leave! What would be the point of working hard and saving if I had not choice whether I could better my own children's lot? What is the possible incentive for my making sure I live within my means and don't run into debt? After all, you can't pass on debts either. Wealth redistribution as advocated by fans of "Citizen's Inheritance" is a fast-track to total financial apathy.
Philippa WS, London
An inheritance is unearned income and as such should be very heavily taxed.
Phil Linehan, Mexico City, Mexico
The decline in family values and responsibilites with government taking over the role more and more is the reason for this phenomenon. It used to be that parents looked after their children and the children look after their parents once upon a time.
"Rocketing house prices may have left one generation with a windfall, but the next needs more of a parental leg-up than ever." I think that sentence sums up the whole middle class and perhaps the selfish thinking of the baby boomers that have had a free university education with a grant and no tuition fees. Many will have an indexed linked final salary pension. Something that my generation, born in the 1980s, will never have.
Daniel Child, Cardiff, Wales
Citizen's inheritance sounds like a brilliant idea... but actually as a 25-year-old student, I'd just settle for the strict means testing of all benefits paid to the elderly. Nobody should be left freezing or hungry in old age, but why should I, with no property, pay high taxes to save far richer old folk from having to remortgage their houses?
Nigella Lawson comes from, and has money, so it stands to reason that her children will have the same advantages as she has had. For us poor serfs we will pass on our wealth to our children because without that start in life, with the price of housing etc they would not stand a chance without it.