Most parents think estate planning starts when the school fees stop. The data says the school fees were the estate plan.
Most parents think estate planning starts when the school fees stop. The data says the school fees were the estate plan.
Here is the accounting error almost every family makes. Fees are booked as an expense, a burden, a hole in the monthly budget that ends, mercifully, at graduation. The inheritance, meanwhile, is booked as the transfer, the real wealth event, the thing worth structuring and protecting. Then you look at the best long-run evidence on how wealth actually moves between generations, and the two lines swap places.
In 2017, Fabian Pfeffer and Alexandra Killewald published "Generations of Advantage" in Social Forces, using the Panel Study of Income Dynamics: American families tracked continuously from 1968 to 2015, with 4,608 parent-child pairs. They decomposed the parent-child wealth correlation into its transmission channels, and the ranking is worth memorizing:
| Channel | Share of wealth transmission explained | |---|---| | Homeownership | 28.4% | | Education | 25.5% | | Marriage | 14.2% | | Gifts and bequests | 12.3% | | Business ownership | 8.0% |
Education explains 25.5 percent of how parental wealth becomes child wealth. Direct gifts and bequests explain 12.3 percent. The channel parents treat as a cost carries roughly double the load of the channel they treat as the legacy.
The same study found the parent-child wealth correlation rises with age, from 0.33 when children are 25 to 34 to 0.44 by 55 to 64. That pattern fits an education story, not a bequest story. A lump-sum transfer would show up as a jump late in life. Instead, advantage widens gradually across the working decades, exactly what you would expect if the transmitted asset is earning capacity that compounds year after year.
There is a second, independent argument, and it is about calendars.
Bill Perkins makes it bluntly in Die With Zero: the average inheritance is received when the heir is around 60 years old, while the money would have had its highest impact somewhere between ages 28 and 33, when a person is establishing a career, a household, and a family. By 60, the heir has already fought and mostly finished every financial battle the money could have helped with. The transfer arrives after the war.
Now run the comparison honestly:
Same shillings, radically different runway. The fee paid at 15 is a transfer made at the single highest-yield point on the entire timeline of a child's life. The bequest at 60 is the same transfer made at nearly the lowest.
Sit with the reframe: the money you are straining to pay in fees this term is not competing with your legacy. It is your legacy, delivered early enough to matter.
Evidence-first means naming the weaknesses, so here they are.
First, correlation is not a voucher. The 25.5 percent figure describes how wealth moved in the data; it does not promise that any specific tuition payment causes wealth. Children of wealthy parents get education plus networks, health, stability, and expectations, and the study itself is careful that channels overlap. Some of what looks like the degree is the household behind the degree.
Second, the graduate premium is not uniform, and in several African labor markets it is under real strain. Graduate unemployment and underemployment are serious in Nigeria, Kenya, South Africa, and beyond. A degree in a saturated field from a weak institution can return close to nothing for years. Credential inflation is real: where everyone has the certificate, the certificate stops sorting.
Third, education spending can be wasteful in a way housing rarely is. A plot with a title holds value even if you chose the wrong neighborhood. Four years of fees for a program the child abandons, or that teaches nothing the market wants, is capital burned with no salvage value.
These critiques change the how, not the whether. They say: treat education spending as an investment portfolio, with the same scrutiny you would give any other major asset purchase. Field matters. Institution quality matters. Completion matters most of all, because the largest documented losses come from starting and not finishing, which incurs most of the cost and captures almost none of the premium. What the critiques do not do is dethrone education as a channel. Even measured with all its noise, it moves twice what bequests move.
If school fees are the largest wealth transfer most parents will ever make, then the scandal is how casually they are managed. Families that would never sign a land purchase without documents fund two decades of education with no plan beyond "we will find the fees somehow." Term after term, the somehow means panic borrowing, sold assets, and interrupted terms that quietly destroy the compounding the whole exercise exists to create.
Planning it properly takes three structures, none of them complicated.
1. An education pot per child. One dedicated account or savings instrument per child, funded monthly, separate from the household's general savings and emphatically separate from the emergency fund. The separation is the point. Money with a name on it survives; money in the general pool gets eaten by whatever shouts loudest that month. A pot per child also makes the family's real liability visible: you can see, years ahead, whether the trajectory covers secondary school and tertiary, or whether the gap needs closing while there is still time to close it.
2. A term-fee calendar. Fees are the most predictable major expense a family has. The dates are published. The amounts are known. Yet each term's deadline somehow arrives as a crisis. Put every fee deadline for every child on one calendar, twelve to twenty-four months forward, with the amount beside each date. The calendar converts a recurring emergency into a scheduled transfer, which is exactly how an estate planner would treat it. It also exposes collision points in advance: the term where two children's fees land in the same month as the land rates, visible a year early instead of a week early.
3. Completion incentives: the family-bank pattern. The highest-risk point in the education investment is non-completion, so structure against it directly. One proven pattern borrowed from family banks: fund the final stretch of an older child's education as a formal loan from the family, written down, with one repayment clause: the loan is forgiven in full on graduation. Finish, and it was a gift. Walk away, and it is a debt. The child carries real skin in the game at the exact stage where dropout risk peaks, and the family's capital is protected against the worst outcome, which is paying most of the cost for none of the credential. The same written-agreement habit trains the next generation to treat family money as structured capital rather than an open tap, which pays off again when the family later funds businesses.
Notice what these three structures have in common: they are exactly what a competent estate plan does. Named beneficiaries. Scheduled transfers. Conditions that protect the capital. The only difference is that this estate executes at 18 instead of 60.
The structures scale to wherever your household currently stands, and the entry point differs by tier.
Foundation tier, income tight and irregular: open the pot anyway, this month, with whatever amount survives contact with reality, even if it embarrasses you. The early value of the pot is not the balance; it is the existence of a named destination that makes the child's education a line item instead of a hope. Pair it with the term-fee calendar immediately, because at this tier the calendar is free and the crises it prevents are the expensive part. Panic borrowing at term time, at informal-lender rates, can cost more over a schooling life than the fees themselves.
Stability tier, floor in place, income steady: the target is a pot that stays one full year of fees ahead of the calendar, per child. Twelve months of buffer converts every future fee shock, a retrenchment, a bad harvest, a medical bill, into a problem you solve over four terms instead of four days. This is also the tier to price tertiary honestly, years early, rather than discovering the number in the acceptance letter.
Growth tier, surplus available: fund the pots to completion, add the graduation-forgiveness loan structure for the final stretch, and then consider the move wealthy families make quietly: funding a niece's or nephew's fees through the same structured pot rather than through undocumented gifts. The channel works across the extended family too, and structure is what keeps generosity from becoming dispute.
None of this makes the fees light. For millions of African parents, school fees are the defining financial pressure of their working lives, and no spreadsheet changes how a fee deadline feels against a thin month.
But there is a difference between carrying a burden and making an investment, and the difference is mostly in the planning. The parent who pays fees reactively, term by term, in crisis, experiences twenty years of bleeding. The parent who runs the pot, the calendar, and the completion structure is doing something else entirely: executing the largest, highest-yield wealth transfer of their life, on schedule, to a beneficiary they get to watch collect it.
And that last part deserves more weight than it gets. Perkins' deeper point in Die With Zero is that giving while alive beats giving at death not only on yield but on witness: you see the transfer land, you see what it builds, and you can steer. The parent at their child's graduation is watching their estate plan pay out in real time. No will offers that.
Your grandparents, if they sacrificed to school your parents, already ran this play. The 25.5 percent is, in part, the measured echo of their fees. The question is only whether the play runs again on your watch, deliberately this time.
Before any other saving this month, open or top up the education pot. Not after the emergency fund contribution if the floor already exists; not after the investment club; first. One account per child, a standing monthly amount, and every fee deadline for the next twelve months on one calendar with amounts attached.
If a child is within two years of finishing anything, add the completion structure now, in writing, forgiven on graduation.
This piece did its job if one parent stops filing school fees under "burden," moves them to the column marked "estate," and funds the pot this month with the same seriousness they would bring to signing a will.