Is It Unethical for People to Pass Their Wealth On to Their Children?

A conversation about inheritance, philanthropy, and aging with the philosopher Martha Nussbaum and the law professor Saul Levmore

Dennis Hallinan / Getty

What is the right way to age? It’s a question that isn’t explored enough in American society, where, seemingly, people are expected to be forever young, until, suddenly, they are not. Reflecting this binary, any writing about a long life’s final decades tends toward extremes. On one hand, there are the accounts of heroic men and women who still put in more than 40 hours a week on the job in their late 60s and early 70s (a genre I like to call “retirement porn”). On the other, there are the articles warning about the dangers of not adapting a home for aging bodies, or the plague of financial scammers targeting lonely or cognitively challenged seniors.

That leaves out a vast middle, the space where many older people actually, you know, live their lives. Luckily, Martha Nussbaum, the renowned philosopher and ethicist at the University of Chicago, and Saul Levmore, the former dean of and a current professor at the university’s law school, decided to explore that middle. The result? The recently published Aging Thoughtfully: Conversations About Retirement, Romance, Wrinkles, & Regret.

The book’s final chapter, “Giving It Away,” discusses what people should do with their money before they die, and how they could arrange for it to be dispersed when they are no longer alive. For The Atlantic’s series on philanthropy, “Who Gives?,” I spoke to Nussbaum and Levmore about these questions, and our conversation touched on why people give money to charity in the first place as well as the benefits of giving those funds to, among other places, the opera. (Spoiler: They disagree.) The conversation that follows has been edited for length and clarity.

Helaine Olen: Why do people give money away both before they die and in their final wills? Are there different motivations in each case?

Saul Levmore: Well, that’s a really good question. Some people give money away, I think, as a way to live forever.

Martha Nussbaum: I think it’s a surrogate immortality, in a lot of cases. People realize that their life is ending, but they want some imprint on the world that is identified with them. Of course, that can take many forms, not just giving money away. It can take the form of building a building, or whatever. But I think the reason that givers to institutions so often want to name a building is they really want their imprint to be on the world in some kind of durable, etched-in-stone way. They don’t want to be forgotten.

Olen: And what are the attractions of giving money away while alive?

Levmore: It’s unsurprising when you see the Bill Gateses of the world give away a lot of money while they’re still alive, because you can watch what people do with it—you can see who’s doing and a good job and a bad job, and then give more to some places than to others, and so forth.

I think most people would prefer to give it away while they are alive and to see the progress that's made. It's just that they’re unsure about their longevity and about their future economic needs. But I think it’s natural to earmark money and have it go for some new building when you die, if you really felt like you have lots and lots of wealth.

Nussbaum: It’s also that people want to give it away before they die in order to avoid the estate tax—which may disappear, shortly. Therefore universities hate the idea that the estate tax would go away. But this is also influenced by social norms. I find that in Europe, it’s much harder to get rich people to give money away, because their peer community of rich people doesn’t honor that, as much.

Olen: So there’s something very American about it?

Levmore: It’s also tax-related. They’re taxed a little bit more heavily than we are during their lives and the taxation system has a very, very strong redistribution element.

Olen: Saul, one of things you talked specifically about in the book is how we discount the pleasure we get from giving money away while we're alive.

Levmore: There are many systems of discounting. First of all, I think it’s thought to be impolite to say how you’ve improved the world by giving money away. So, people are shy to say that. And then, also, I’ve been a donor, but I’ve also been a fundraiser when I was president of the law school for a while, and I think that there’s a sense in which you don’t want to know if people flopped with your money. You give money away, and it goes to some college—maybe your college was better when you were there, but maybe it’s worse than when you were there. You would like to imagine that you’re making the world a better place, and in a funny way, it’s easier to do that when you’re dead. I think, for example, one reason people don’t give more money to their children while they’re both still alive is it would be a shame to give a lot of money to your kid and then watch your kid not go to work every day, or watch your kid misuse the money.

Nussbaum: Suppose you endow a charity, or university. You could put your name on it, but you could also endow it in honor of some teacher you had. People differ. There are people who prefer to be anonymous in their giving, or to put somebody else's name on it. It also poisons your relationship with other people.

Olen: What do you mean by “poisons your relationships with other people”?

Nussbaum: Well, it’s if you seem to be posing as a big shot and you want to be just one among equals—you don’t want your name to be trumpeted.

Olen: In the book, you discuss the distinction between altruism and philanthropy. Can you elaborate on that?

Nussbaum: Oh, sure, because altruism is the desire to benefit others, for their own sake, and not for yours. Now, some philanthropy is very self-interested. I know one opera donor who insists that the money would be used only for works from prior to the 20th century, because she doesn’t like 20th-century music. So, you want to hear what you like—that’s pretty selfish, actually. Philanthropy can have a very strong selfish component.

The other side of it is that disinterested altruism takes many forms. It could just take the form of raising children and grandchildren, or of teaching students—there are all kinds of things you can do to benefit others that really are not giving your money.

Levmore: I saw two views of this. There’s a classic, old-world, religious one: If you’re giving money to an individual, the highest form of charity is that the recipient not know who gave the money, so that they not be embarrassed around you and not feel like you’re exercising control.

On the other hand, in the case of institutions, I know that when I was involved in fundraising, people would sometimes gives gifts anonymously—sometimes to hide it from their spouses, by the way, but sometimes so everybody wouldn’t know they’re so rich. We as fundraisers usually wanted people to attach their names to gifts, because there’s a form of healthy competition among donors and if you get one donor to offer the university a few million dollars, other people in the class might feel motivated to try to do the same if they can afford it. People might be a little more altruistic because the donee encourages it. It’s complicated.

Olen: Do you think philanthropy or altruism is better, or do you think they’re both good or both bad?

Nussbaum: Look, institutions need money and people need money, so it’s fine for them to have incentives for even the most selfish kind of giving. I think it’s just fine that this donor I mentioned wants only one century’s music to be played—you know, somebody’s got to support that and so then the symphony just has to go out and find somebody else to support the other kind of music.

I guess ethically, we would like to think that people will also have a more disinterested and unselfish kind of giving. There’s a very interesting book by Kristen Monroe called The Heart of Altruism, where she comes to the conclusion that there are few very altruists who are totally unselfish, but maybe the quintessential example is the people who rescued Jews during the Holocaust. They not only had nothing to gain, but they were taking great risks of losing their life and also losing their reputation in their very fascist peer community.

Olen: Is it selfish to leave money to your children instead of giving it away?

Levmore: One of the nicest things I remember happening when I was dean is there was a young person, a person of means, and he wanted to endow something but he didn’t want to do it while his children were young. And then it occurs to him to give the money away in order to be an example to his kids—like they could come visit our university and see, you know, how this helped poor people in our clinics, they could see this clinic that was named after their grandfather that their father had given. And they can think, “Wow, this is a good reason to work hard and make money. You can give it away and make the world a better place.” And they can be proud of him.

So I think teaching your children to be proud of being helpful is probably a really good thing for a lot of rich people, even though it tells the kid that you have a lot of money, and even though there might be moments when they think, “Why’d you give away that money? You could have given it to me!” But I think he was proud of it, and it’s nice to see your parents do good deeds. Maybe you’ll react accordingly.

Nussbaum: With inheritances, it’s really important not to give the impression that you’re extorting your children, and one way you can not do that is to make it clear to them that you're not leaving the whole of your estate to them at all, but to various charitable organizations. I think we need to remember that not all children have rich parents and we need to do things to bring about overall social welfare. Hopefully the tax system will do a good deal of that, but perhaps not. So we have to be aware of what might be neglected. In my case, I give a lot to animal welfare because I think that's pretty neglected in America.

Olen: Saul, can I ask who you give money to?

Levmore: I give less money to animals because I know Martha is giving more. I mean, I’m half-joking, but that’s the danger. Because people know you’re giving money to a cause, then that might cause the government itself to give less money to it.

My wife, especially, gives money to organizations that support things she wishes the political system could better address. So, if she doesn’t like their family planning then we give lot of money to organizations that do that. Public schools aren’t getting a lot of money, so she might give a lot of money to public schools if we think they’ll do a good job with the money. Or she might give more money to private schools if we think the competition with the public schools is healthy. So a lot of it is second-guessing what the government does and doesn’t do.

Nussbaum: I think that’s similar, except that I guess I also would give to organizations to which I have particular love and gratitude, like our own university, for example, and the Lyric Opera, in Chicago. So, although I do give some to the St. Louis Opera and to the Seattle Opera, why do I give to the Lyric Opera and not so much to other opera companies? It’s mostly gratitude for the involvement and the performances that I’ve enjoyed over the years.

Levmore: I do the same, but I don’t like it. I wish they’d just raise prices. I would much prefer that they just charge the price to keep it alive and if they couldn’t afford it, then things would close down or there’d be fewer of them. But I’m sure Martha and I disagree about this.

Nussbaum: Well, I disagree because I think the art form is really wonderful and very important and right now prices are already so high that young people are discouraged. So I want, really, to lower the prices.

Levmore: Nothing stops the opera from subsidizing young people if it’s a good investment. I don’t really see why taxpayers as a whole should be supporting the opera.

Nussbaum: They do have programs, not only to include new audiences but to train young singers. But that’s one of the things the philanthropy supports. And maybe that’s not ideal, but …

Levmore: No, I don’t think it's ideal. You know lot of these young singers are children of wealthy people.

Nussbaum: Many trained there are not the children of wealthy people. They win a nationwide audition in which five people win out of about 10,000 that initially complete.

Levmore: You should look at the numbers of where these people come from. Most poor people are immigrant families who wouldn’t want their kids training to become opera singers. It’s not a reliable source of income.

Nussbaum: Most people don’t want their kids to do lots of things. But they do it.

Levmore: They do? Not in my family!

Nussbaum: Ha! Well, I mean, look at my daughter: She’s working for animal rights, making a very, very low income.

Levmore: Yeah, she comes from a comfortable family.

Nussbaum: But what I’m saying is that artists and singers are drawn from all walks of life. Typically, they get their start when they’re in some undergraduate program and they learn that they have this wonderful talent. And then they might come from any kind of income class.

Levmore: Well, they’re wealthy enough to go to college.

Nussbaum: But I mean the state universities.

Olen: I want to jump in—you’re never going to agree on this, right? Let’s talk about why people often give more to charity as they get older.

Levmore: Well, I think there’s less uncertainty—you don’t know how long you’ll live, but you can see that you've saved a certain amount of money, and that you can have a certain amount of income per year, and you know you won’t starve. So you don’t feel this tremendous need to set aside money for yourself for the uncertainty of what’s ahead.

Nussbaum: Absolutely. I agree with that, totally.

Levmore: See, we can agree if we want to!

Olen: On the other hand, they don’t know how long they're going to live, so they still don’t completely know if they are going to need money.

Nussbaum: What most people would want is to stay in their own homes, and have home-based nursing care. They don’t really want to put all that on their children. In Finland, the government provides home-based nursing care, and tries to make it possible for people not to have to move out of their homes. But the U.S. doesn't really make that possible, so people would be right to be scared and hold onto their money. Because if they need nursing care, and they don't want to go to some faceless institution, then they need money for that.

Olen: I want to touch on something else: volunteering as a form of philanthropy.

Levmore: We both love working. So I think that putting a lot of time into volunteering is not particularly in our future. But we admire people who do. There are a lot of people who either didn’t like their careers, or their careers ended, or they worked in careers, who put an enormous amount of effort into working on behalf of other people. And I think it’s super valuable. In a way, it’s more valuable than giving money, because giving money, you must have some information about who you are giving it to, and whether they are doing a good job. But somebody that goes somewhere to build homes, or goes somewhere to care for people who need help, I think it’s really great. I mean, they learn a lot about what they are doing. They learn a lot about themselves.

Nussbaum: I think we have to bear in mind that in previous generations, a large source of volunteering was women who just assumed that they wouldn’t be able to enter the workforce. There were all these wives who never had a career, and they spent all their time doing good works. And that was great. But now women are quite rightly thinking, “Well it’s my life. I can go out and have a career.” But then their time is really at a premium. Especially if they have to do a lot of the child care and maybe elder care too. So we do have a problem of service. These posts are vacated.

I myself favor compulsory national service for young people. And in my next book, I’m going to talk about that. Because I think, among other things, that it gets work done that needs to be done—child care, elder care. But also, young people who have grown up in one social class may get to know other people. They get to know people of different regions, different ethnicities. And it’s something that military service, of course, has always done. But we don’t need to have that. We just need to have some way of taking people out of their comfort zones, and putting them to work helping others in a completely different surrounding.

Levmore: In principle it’s a terrific idea. But in practice, I’m not sure that the government will be good at knowing which areas to push people into, or force them into. There is a danger that we’ll put them to work at senior-citizen homes. And that will provide the people who work in those homes with no jobs and unemployment. It’s very hard to get right. We’d have to do it carefully.

Olen: Are there ways to encourage people, then, to be more philanthropic as they age?

Nussbaum: One thing that people actually already do as they age is take a lot of adult-education courses, particularly in literature and philosophy. So to get them talking and thinking about this kind of issue is, I think, the first step. And then if they’re thinking, “What is the meaning of life?,” then they might take the next step and think, “Well, part of the meaning is to change the world for other people.”

Levmore: I don’t know. In the very, very old days, when income taxes were new, everything about tax was public. People in New York would walk into public places, and everybody would clap, because they would know these people paid a lot in tax. And for a variety of reasons, we’ve since made this information very private. We don’t even know the president’s tax payments. And it’s probably because we are afraid of financial crime, and so forth. But in principle, if you knew how much money everybody gave—in money and time—to good causes, that might really be a good influence on people.