Bill Perkins, the hedge fund multimillionaire and best-selling author of Die with Zero: Getting All You Can from Your Money and Your Life, says people should give their kids their inheritance early\u2014before they get so old that it won’t make a difference. <\/p>\n
Perkins, who made his first million dollars before the age of 30,<\/a> told Fortune Daily<\/a> host Ellie Austin the common practice of parents passing down an inheritance after death can mean the money arrives too late to have its biggest impact. <\/p>\n Instead, if you are already planning to leave money to your children when you die, he said it’s best to put it in a trust and give it to them while they’re between the ages of 28 and 33. <\/p>\n “The reason why is that your brain reaches peak mental acuity at 28 on average, and you’re in decline and plateau starting at 33,” he said, adding: “The utility of money starts to decline and the seasons of your life start to pass you by.” <\/p>\n On its face, giving an inheritance to your children may seem counterintuitive to Perkins’ philosophy of Die with Zero, which preaches spending or giving away all your money during your lifetime. But, in his book, he notes dying with zero also includes making sure your kids are taken care of. <\/p>\n In the book, he mentions the example of Virginia Colin, a woman who had to raise four children on her own following a divorce and struggled financially even while her mother had plenty of financial resources. After her mother died when she was 49, she, along with each of her siblings, received an inheritance of $130,000. But by that time, she had remarried and was no longer “at the edge of poverty,” as Colin, 68 by the time the book was published, put it.\u00a0 <\/p>\n “It just would have been a lot more valuable a lot earlier,” she said. <\/p>\n Perkins said his thinking runs contrary to current practice. In the book, he cites data from the Federal Reserve Board that found the most common age for people to get an inheritance is 60. <\/p>\n Yet, he argues if you’re waiting for death to come knocking before giving your kids the inheritance you wanted to give them, you’re leaving the decision to chance. It would require a great deal of luck for that money to arrive at the moment they might need it most. Waiting until you die also raises the odds you may outlive some of your children. <\/p>\n “If you plan on giving money to your kids, well, that’s their money, not your money,” he said. “And then we think about when is the best time to give them that money, and the answer\u2014the short answer\u2014is it’s not a bequest. It’s long before you die.” <\/p>\n Perkins’ argument lands at a moment when younger Americans are struggling to afford many of the milestones earlier generations reached sooner. About half of Americans ages 18 to 29 live with their parents as mortgage rates rise near 7%<\/a>, putting a first home out-of-budget for many buyers. As such, the median age of a first-time homebuyer rose to 40 last year<\/a>, up from 28 in 1991<\/a>. And last week, the Federal Reserve raised interest rates for the first time since 2023 as the August consumer price index rose 0.4%. Inflation has remained above the Fed’s 2% target rate for the past five years<\/a>. <\/p>\n At a younger age, a person could use an inheritance for a down payment on a home or to pay off student loans\u2014but by the time they are older, that money may just not have the same effect, he argues. <\/p>\n So when it comes to inheritance decisions, Perkins said people are simply following the status quo by giving away their money after they die, rather than considering when it might benefit the children receiving it the most. <\/p>\n “That is not really thinking about your kids,” he said. “That’s kind of like an autopilot decision that’s been passed down from generation to generation.” <\/p>\n