> Is that an optimal way of allocating resources? Who knows. The problem is that optimal resource allocation is not an objective concept. You make the argume

> Is that an optimal way of allocating resources? Who knows. The problem is that optimal resource allocation is not an objective concept. You make the argument that the family trust is dead weight, but I would disagree because someone has to do the allocation, and that is real work. Most of that work is done by analysts hired by the family office, and they would just be doing that work for another employer otherwise. You could also make an argument that the person who has inherited and doesn't have to do any work is economic dead weight. And on that point I would agree with you. But the truth is that the number of people who inherit enough money to never work is vanishingly small. Top 1% in the US is net worth $10 million, and even that is only barely enough after estate tax if they have 1 child. Top 0.1% is 50 million, and that would do it for sure. So we may be losing 0.1 - 1 % of our potential economic productivity to this dead weight, but that's insignificant. And in reality, the people I know from school from families like that are all working anyway. Most rich parents don't want to support dead weight kids even if they can easily afford it.