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
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
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.
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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.
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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.
“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.
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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
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.
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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.
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.
Family member age range example
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.
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