| Children |
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We want to be clear – there is no need to have children in a line family. Any
family offspring go off to other families or start their own. Like nuns and
monks, who have no problem keeping their lines going, a line family’s future
depends on bringing in new – and mostly younger members. Your line family could
have no children for several generations and it is probable that the world will
still be over populated. But let’s be honest (or at least pragmatic) babies
will happen.
What do children of WWII veterans and the wealthy have in common? Returning veterans of WWII came home and found that they were to receive benefits from something called the GI Bill of Rights. It gave veterans full tuition benefits to attend college. Not only was tuition paid for but so were books and housing costs while going to school. The GI Bill also provided low-cost home loans. Many veterans thrived because of the bill and became successful business men. Some time back I read about a researcher who had interviewed a roomful of successful business men who were WWII vets. The interviewer asked for a show of hands of those who had taken advantage of the GI Bill. All but a couple of men raised their hands. The interviewer asked for those hands to remain raised if they had helped their children by paying for their schooling or buying them a starter home. Only a couple of hands went down. They understood the value in getting a solid financial start in life. Their children benefitted from that valuable lesson. Return to top. Most wealthy families know this and provide their children with education and a strong financial start in life. Bill Gates said: "I will give the kids some money but not a meaningful percentage. Setting the number so that they need to work but they feel reasonably taken care of is hard to figure out." We are sure that the kids will also receive 1st class educations. General tenants of good parenting still apply. Children of any social class need to be taught the values of responsibility and respect regarding the Earth, family, friends and all of life. The details we leave up to you. Without appropriate guidance, your family could suffer the fate of the Vanderbilts. If you want a good example of how not to manage family wealth, read Fortunes Children by Arthur Vanderbilt. Return to top. Giving Children Money: Several ways are available to give money for any reason. The most straight forward is a gift. Here’s what the IRS website has to say about it. Gift Tax “The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not. The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift.” This is the IRS’ own interpretation of the tax code as it stands in December 2011. Return to top. Who pays the gift tax? The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement. As of 2011, total gifts valued at $13,000 or less to a single person in a single year are not taxed. Not all gifts must be declared even if the total value exceeds $13,000 in a single year. Gifts for tuition are not taxed at any amount. Also gifts to pay medical expenses of an individual are not subject to the gift tax. Neither are gifts to a legal spouse or political organization. You might want to look at trusts for giving to children, whether for tuition and books or simple living expenses. The giver has more control over disbursement of funds with a trust. (See the financial section for more details.) For more details go to the I.R.S. gift tax page. Or child’s college education can be saved for using a 529 plan. They are available in most states. The 529 college savings plan named for Section 529 of the Internal Revenue code that authorizes them. Under this code, you contribute after-tax money and your money grows tax-free, and all withdrawals are tax-free, when used for tuition, room and board, and other qualified higher education expenses. Check out more information and a list of states with 529 programs at this page. First Home: If your line family has the wherewithal you might want to think about buying the home outright then selling it back to the child for a reduced price. This way they have to learn about making payments. Or just give it to the child outright if you think he or she is ready to be thoughtful homeowners. Imagine what your life would have been like if you started out on a solid financial footing with an excellent education and no burdensome debt. That’s how the wealthy families do it. They give their children financial security to get going in life. However, unless your family has a lot of social capital (see the section Human Capital) they will have to build their own network. Return to top. Just know that your children will make mistakes. Remember how much you liked to party as a 20-something. That is why large lump sums of money may not be the best thing for children. Trust accounts might be the way to spread out the early financial support. These are things that the family might want to plan for in advance. Birthrate Control Following is a sample age demographic for a line family with 22 members. Let’s further assume a nearly equal gender population among the age groups. Now lets stipulate that this family has a commitment to a lower birthrate and strives for one live birth for every female of childbearing age. 
This family would have about 4 to 6 or 7 children under the age of 18 depending on when each woman chose to have a child. About half the staff at Creating A line family has experience parenting one or more children that are not “blood kin.” We share the joys and tribulations of child rearing just like the birth parents. The emotional bonds are strong. You can have the fulfillment and frustration of raising children that are or not genetically related. It doesn’t matter. In October of 2011 the human population of the Earth reached 7,000,000,000 (seven billion). Birthrate control, described above, helps this problem. In addition, the financial drain on the line family is up to one half the amount that would be needed if everyone – particularly men – felt they needed to have genetic offspring. Even at the smaller birthrate, the children would have siblings. Return to top. |