Is It Right To Disinherit Heirs?
Updated: 2 days ago
Significant estates mean significant questions and significant consequences...
Inheritance taxes (also known as ‘death taxes’ by detractors) are controversial. This is mainly true in Britain where the two main political parties, Labour and the Conservatives, are known to vehemently boo-hurrah proposals that either seek to decrease or increase the state’s slice of the inheritance pie. But while inheritance taxes remain a point of contention, the same is not the case for the voluntary act of disinheriting. The fact that it’s less common (albeit more common than it’s ever been per se) than inheritance taxation is perhaps one reason. But, there are more reasons. And, disinheriting does have its advantages - For society and the disinherited heir.
Although proponents of large-scale taxes on inherited estates are typically on the left, those who advocate voluntary disinheritance are seldom political allies of lefties, who are likely to disdain the fact that they have such wealth in the first place. This may seem obvious, but some have tried to identify Mark Zuckerberg as a lefty on the basis that he disinherited his daughter. The claim is nonsense. Rather, for wealthy individuals such as Mr Zuckerberg, disinheritance, although largely based on moral considerations - Mr Zuckerberg intends to donate his wealth to philanthropic causes, it is also about much more. Indeed, one could argue that it’s predominantly a question of aspiration.
Nicolai Tangen, manager of Norway’s Sovereign Wealth Fund and a proponent of 100% voluntary and involuntary disinheritance explained his rationale when he said ‘one of the most important things in life is to know what your dreams and aspirations are and [then] to work towards them, that is what makes life fascinating.’ Hence, the fact that much of the billionaire class today are ‘self-made’ and have therefore experienced that fascination of the journey towards their dreams makes this logic of disinheritance intuitive and emotionally appealing for them. And, it’s a logic that we applaud.
Because we should hardly moan at the fact that the would-be heirs to vast sums of wealth are missing out in this respect. Daniel Markovits, Professor of Law at Yale University, notes that such children born into wealthy families are still endowed with significant advantages that enable them to win in the meritocratic game of life, achieving their life aspirations off their own back in the end, as is preferred in most cases by their wealthy parents. Private education, vast extracurricular activities, training, and immense social and cultural capital that such children are granted by virtue of their upbringing will equip them with a vast arsenal to achieve what they want in life.
Furthermore, voluntary disinheritance is exactly that - voluntary. The state misses out on the pie, yes, but if the sums of disinherited wealth are put to use in a noble and effective way, such as through philanthropic donation, then the net benefit of disinheriting is far greater than not.
It's perhaps for this reason that disinheriting is becoming common practice amongst the super-wealthy. Mr Zuckerberg is not the only one to commit to donating vast sums of his money to charity, thereby disinheriting his children in the process. Warren Buffet, Bill Gates, and Michael Bloomberg are among other billionaires who are also pledging to do the same. And, although the question of disinheriting is of different scale for different people, and of greater moral significance the wealthier you are, it would be a mistake for people who are not of the billionaire stripe to not consider it. Because, at its basis, the disinheritance question is a moral one. And, like all moral questions, after thinking bout it, you’re own conclusion may surprise you.