The idea is to make your children and grandchildren grow up understanding that they will need to make their own way in the world, and to find uses for unused retirement, savings, or trusts by donating to a worthwhile charity, scholarship fund, etc.

The premise is that the future for children who grow up in wealth, or knowing they stand to inherit or be given large sums of money, is almost always bleak. Another example is lottery winners who surprisingly frequently end up in worse financial condition than when they won their windfall.

I've seen it first hand - my ex wife's stepmother had an $18M trust fund. The grandmother had granted three of her kids unlimited scholarship money to attend any university of their choosing. That was extended to my ex and her brother later. Not one of the five ever attended a single class at any university. Not one ever developed what most people would define as a career.

My ex wife had horrific problems managing money. Like shockingly bad spending habits. When we divorced she was granted my entire 401k - about 400k. She cashed it out and spent every penny within a year, then the next year realized she owed the IRS a rather significant chunk of change.

She was actually the least bad off of the five. One went to prison for embezzling, one died at 30 of a drug overdose, one is married to a drug dealer, and my ex wife's brother has been arrested for domestic violence twice, declared bankruptcy at least twice, and has a son serving a life sentence for murder. Fun family.

Incidentally, the last I'd heard (ten years ago), my ex wife's dad & stepmother had burned through all but about a million of the trust fund - and he had a $60k/year pension from the police department.

The thing about managing money is that you learn to do it slowly, over time, as you EARN it. So I completely agree - "generational wealth" is not something we should all aspire to accumulate.