Author Topic: Do you account for inheritance(s) when planning?  (Read 15165 times)

freelancerNfulltimer

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Do you account for inheritance(s) when planning?
« on: July 08, 2013, 11:30:07 AM »
When you are considering how much you need to save for early or traditional retirement is it customary to include planned inheritances?

I've been planning on just not including it. I've always figured I'd get about $200,000 from my parents at least but I've never thought about it beyond that.

The only reason I'm wondering is I had dinner with my mom and Grandparents last night at my mom's new house and naturally the conversation found its way to Real Estate. I was telling my Grandparents how I was saving up for a down payment on a rental property as part of my retirement plan and my Grandmother told me that I didn't need to worry about saving for my retirement because of how much money they were going to leave everyone. It was kind of an off the hand comment, but it was surprising to hear. I know my Grandparents are wealthy but they are so frugal it's impossible to know how much they truly have. I don't think my Grandmother would say something like that in jest either. (This is my Grandparents dream to leave behind a ton of money, they are depression era and have worked their way up from nothing to what my best guess is a few million in the bank. I've repeatedly encouraged my Grandmother in particular to splurge on a nice vacation but she won't.)

This doesn't change my plans to save for my retirement and I'm not going to bank on a windfall. I just was wondering if this is what others do as well, or if it's normal to incorporate inheritance if you know how much you're likely to receive (which I do not.)?

MissStache

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Re: Do you account for inheritance(s) when planning?
« Reply #1 on: July 08, 2013, 11:40:52 AM »
I wouldn't.  For one thing, your ideas of what you will be getting could be wildly different.  You could be expecting 200K and end up with 10K.  Unless you've been given an explicit number, it would be irresponsible to speculate.  Also, there is no guarantee of when you would get the inheritance and would be hard to plan on that- and it seems so icky to think "well, grandma will die in 10 years..."

My parents have a decent estate that I know they will split evenly between my sister and myself, but I wouldn't even begin to factor that into my plans because there are so many variables.  If it comes through to be something significant, I'll count it as a windfall.  If not, it won't hurt my plans at all.

matchewed

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Re: Do you account for inheritance(s) when planning?
« Reply #2 on: July 08, 2013, 11:49:09 AM »
My parents have informed me that I'm going to be the executor of their will. I have a good rough idea of their assets and know their good and bad habits which will affect their future physical and financial health. With that being said I run my plan with zero expectation of an inheritance. It keeps my life mine to build, anything else is gravy.

Nords

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Re: Do you account for inheritance(s) when planning?
« Reply #3 on: July 08, 2013, 02:20:03 PM »
When you are considering how much you need to save for early or traditional retirement is it customary to include planned inheritances?
I've been planning on just not including it. I've always figured I'd get about $200,000 from my parents at least but I've never thought about it beyond that.
(This is my Grandparents dream to leave behind a ton of money, they are depression era and have worked their way up from nothing to what my best guess is a few million in the bank. I've repeatedly encouraged my Grandmother in particular to splurge on a nice vacation but she won't.)
This doesn't change my plans to save for my retirement and I'm not going to bank on a windfall. I just was wondering if this is what others do as well, or if it's normal to incorporate inheritance if you know how much you're likely to receive (which I do not.)?
I wish my Dad had spent a little more money on himself before Alzheimer's started.  Instead he saved over half of his pension & Social Security for nearly 25 years.  I don't think he denied himself (from what I can tell of his files) but I'm pretty sure he didn't indulge himself either.  These days I'm his conservator, and I'm uncomfortably aware that his assets will outlast him.

Let me share a cautionary tale about "inheritance assurances".

Nearly 21 years ago after our daughter was born, my spouse and I were telling spouse's parents about our college-savings calculations.  My FIL said "Ah, don't worry about that, we'll take care of it."  That admonition was repeated for over a decade.  A few years later (as the 1990s bull market took off) they started gifting my spouse to the annual limit.  Their guidance was "Put this money wherever you want, and if we need nursing home care someday then you won't have to use your own money."  (They even cautioned spouse to keep the money "in her name" with her brother POD so that it wouldn't leave the family through divorce or her death.  Good advice, and I agreed with it, but the delivery was lacking in tact.)  In effect they were gifting ahead of the Medicaid spend-down and giving strong hints that we should keep the money in CDs or savings bonds.  At the time her parents were barely 60 years old, and her family has longevity into the high 90s.  The gifting continued for several more years.

My spouse has known her parents all her life, and she knew how to handle this situation.  We kept our opinions to ourselves.  We kept working on our own college-savings program, and we just didn't discuss college expenses with her parents anymore.  Spouse also took their gifted money, put it into I bonds, and nobody talked about that either.

A few years later her parents sold their paid-off East Coast home and moved to Hawaii to watch their only grandkid grow up.  They put their profits into CDs.  During that time the stock markets crashed, the housing markets took off, and interest rates started dropping.  Soon, however, our daughter became a teen and wasn't interested in spending time with her parents, let alone her grandparents, who weren't acculturating very well out here anyway.  When spouse's parents inevitably decided to move back to their ol' East Coast stomping grounds (with our enthusiastic support), they learned that in just six years they'd been priced out of the housing markets.  The cashed-out equity from selling their old home had been steadily losing to inflation while it was "absolutely safe" in their CDs.  (Apparently we trusted I bonds more than they did.)  Their old home had doubled in value but they'd missed out.  All the real estate cost more than they had.

There was no more talk of college funds, and the gifting had stopped when the stock markets had dropped.  Instead they announced that they were taking out a mortgage to buy themselves a 2BR condo.  They wanted "spouse's" gifted money (and its unrealized gains) for the down payment.  This was not a plea for help or even a polite request... this was a notification that spouse was returning "their" money.  We spent the next few years "gifting back" a six-figure sum so that her parents would be able to stay 5000 miles away from us.  It puts a price on family harmony, and it's a bargain.

Spouse's parents live close to her brother, a CPA who manages their accounts and does their taxes.  Nobody really talks about their finances, but from the kvetching we've heard over the last few years I suspect that they're 100% CDs.  Her parents heckle each other over using electricity or water, they almost never go out for meals, and they won't even drive unless gas is "cheap".  Their entertainment is the Internet (TV programs, streamed movies, & websites).  They're frugal cheapskates (in the pejorative sense) and they'll live within their Social Security if necessary.  Spouse does not expect that her parents will ever ask for her help.  If spouse's brother asks for help then she'll write him a check. 

Spouse claims to be "so over" her parents, and I'm the only one who sees her tears. 

Just to lighten up this post a little, here's another entertaining perspective on inheritances from Jason Hull:
http://www.hullfinancialplanning.com/if-youre-waiting-for-an-inheritance-you-are-a-sick-entitled-teat-sucker/

Joet

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Re: Do you account for inheritance(s) when planning?
« Reply #4 on: July 08, 2013, 02:27:15 PM »
I assume it's safe to assume that an inheritance could quickly turn into an obligation with end-of-life/care issues and related expenses. If you expect an inheritance and they arent currently leveraging annual tax-planning/gift opportunities, why arent they?

mpbaker22

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Re: Do you account for inheritance(s) when planning?
« Reply #5 on: July 08, 2013, 02:34:57 PM »
Of course you account for it.  You shouldn't just ignore it completely.  But you shouldn't assume you're getting or spending $x as well.  Just account for it in the sense of hoping you get $x, but don't retire because you know you're getting $x at age y.

Spork

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Re: Do you account for inheritance(s) when planning?
« Reply #6 on: July 08, 2013, 02:51:13 PM »
I don't.

I have a pretty exact idea of what "I'm getting."  I sat in on some of my parents' estate planning (at their request).   My goal is to make it such that I do it on my own -- and everything else is just a bonus.  Any number of bad things could happen: ridiculous illnesses, lawsuits, squabbles between the beneficiaries of the will, etc. 

...and bottom line, I keep telling my dad: It's his money, not mine.  I'd like to see that his wishes are met, not mine.  If that includes me: awesome.  If not: awesome.

Hunny156

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Re: Do you account for inheritance(s) when planning?
« Reply #7 on: July 08, 2013, 02:57:24 PM »
I agree, plan on nothing where inheritances are concerned.  My parents lived frugally and saved quite a bit.  At the time of my dad's passing nearly 12 years ago, the value of the paid-off house and bank CD's were well over the $1 million mark, plus Dad's life insurance policies.  I incorrectly assumed at this point that Mom would never have to worry about finances.

I eventually discovered that in order to build the paid-off house is cash, Dad had taken cash value from the life insurance, so there was no insurance.  OK, at least we still had the house and the cash.  Then the real estate bubble popped, and the home dropped in value by about $500K.  Still really good on cash, though!

Long story short, my parents never felt the need to diversify, invest in the stock market, etc.  They also didn't bother w/Medicare planning, trusts, etc.  Mom's dementia came out full force shortly after Dad's passing.  My sister is a classic case of entitlement, so she tolerated my Mom while she continued to live rent free in Mom's house.  By the time we realized what was truly going on, Adult Protective Services was involved.  Hubby & I immediately stepped up, and moved Mom into assisted living near us, which is halfway across the country.  Mom's a trooper, and she's been in a painfully slow decline for years.  I got my sister to move into the small income apartment in my parents house, in exchange for covering the taxes & insurance, which she has never once paid out of her own pocket.  Luckily, renting out the main house and mom's social security covered most of her care, so we were drawing down at a slow pace, and I had no concern about her outliving her cash reserves.  Until my sister legally stole it all.  I guess she found some time and a shady lawyer to come to the house while Mom wasn't all there mentally, and well, you know the rest.

We no longer speak now, but the amazing caretaker staff was able to play hardball w/my sister.  She continues to pay, or they'll send my Mom back home.  Every month, we hold our breath until the check clears.  As long as she continues to pay, I'm leaving this mess alone.  As far as I know, I will become a 50% owner of the home when my Mom passes, but I can only imagine how much of that will be eaten away in legal fees when my sister attempts to play games and stay in her free ride as long as possible.

I too, an "so over" my family.  Yet I'm still often shocked by how low people will go when it comes to money.

Bank

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Re: Do you account for inheritance(s) when planning?
« Reply #8 on: July 08, 2013, 02:58:26 PM »
Interesting question.  I second the opinion expressed above inheritances are too speculative to really even give much thought to, much less include in your retirement plans.

I had two sets of grandparents.  One set was very frugal and owned of a series of successful businesses.  The others were both salary workers who lived beyond their means for most of their lives.  You'd think you'd know how this would end, right?  Wrong.

Both of the "spendthrift" grandparents died relatively young of heart attacks.  Their modest life insurance policies and paid off house provided a substantial inheritance to their heirs.  The frugal grandparents lingered for years in assisted living communities, and then later nursing homes.  By time my frugal grandmother died last year after years of dementia, there was nothing left of all they had worked to accumulate and save.

I know what lesson I take from this, but YMMV.

footenote

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Re: Do you account for inheritance(s) when planning?
« Reply #9 on: July 08, 2013, 03:26:44 PM »
+ 1 Nords and Hunny156...

My parents had a respectable net worth and lived comfortably on their income in retirement. Mom died six years ago and dad reiterated to my brother and me that the trust he and mom had established decades before was still in effect.

In the six years since mom's death, I did not count on eventually receiving this inheritance. My brother and SIL did, buying: serial McMansions; three very expensive vacations each year; and two luxury SUVs and a Porsche.

Dad remarried four years ago and (unknown to us) raided the trust, leaving a massive amount of money to his second wife when he died late last year. My brother and I each ended up with about 1/4 what we had been told we would each receive.

As Nords points out, even "gifted" money can come with strings. No gift, no trust, no legal vehicle can ensure you will get money through inheritance.

olivia

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Re: Do you account for inheritance(s) when planning?
« Reply #10 on: July 08, 2013, 05:46:35 PM »
No, and unless your parents or grandparents are millionaires, I don't know why you would.  (And even then the stories here show that anything can happen.)  I have no living grandparents-one recently died but was in their 90s so I'm assuming any leftover money went towards nursing home care).

I hope my parents spend every cent they have before they die.  My dad didn't retire early but he's very Mustachian and probably could have if he wanted to.  He loved his job though and would have kept doing it but they offered him a buy out right before he turned 65 so he took it.  I like to tease my parents about "spending my inheritance" but it's 100% a joke-my dad has said he wants his last check to bounce, and I told him I agree 100%.  Plus my parents are in their 60s but in good health, so fingers crossed they'll be spending money for another 30 years and won't have anything left.

Frankies Girl

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Re: Do you account for inheritance(s) when planning?
« Reply #11 on: July 08, 2013, 08:16:40 PM »
I never counted on an inheritance from either of my parents. I've been plugging away with the husband on saving since I got a decent job, and was working towards early retirement on our own. It was kind of one of those "I want to be independent and stand on my own two feet" type of deals.

My father died late 2012. My sister and I were equal heirs. He was a depression era baby, grew up dirt poor, and because of how he lived (hoarder that never spent anything) my sister was blown away at the amount he had. I was not surprised, but he and I discussed money more than he did with her. I remember her exclaiming "but he washed out plastic baggies and reused them!" and I said, "Well, yeah, that's how he amassed that much money - he never spent it!"

His money was in IRAs and brokerage accounts - a small amount in 4%+ CDs, but mostly stocks and bonds being professionally managed, so it's done very well overall. At this point, I am very grateful for the money, but there is the sadness that he was sitting on so much and could have used it to make his own life better that really gets to me.

I told both of my parents over the years that I would rather they spent down to the last penny and enjoyed their retirement than worry about leaving me anything. I truly wish my dad had done more - he had a pipe dream for the last 25 years about buying lakefront property and building a house, but he never did get around to it... and that breaks my heart.

My mother is probably going to be the same way. She's in poor health now, and not able to enjoy herself with what she's got, and she told me recently that she still hasn't touched her inheritance from HER parents... sigh.

My parents money is just that - theirs. I never figured it into my retirement, and would consider it a really amazing gift if there was anything, and that's how I'll continue to think of it.


freelancerNfulltimer

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Re: Do you account for inheritance(s) when planning?
« Reply #12 on: July 08, 2013, 08:38:17 PM »
I assume it's safe to assume that an inheritance could quickly turn into an obligation with end-of-life/care issues and related expenses. If you expect an inheritance and they arent currently leveraging annual tax-planning/gift opportunities, why arent they?

Knowing my Grandparents they have a hefty end of life fund. My Grandfather is "retired" but he still draws a sizeable paycheck from the business he owns 40% of.

My Grandparents have been taking advantage of annual gifting limits with their children. They've been giving annual gifts for the last few years and looking into gifting shares of the family business. I know my Grandfather has been talking with his CPA about estate planning, but I'm not privy to that info beyond family gossip. My mother and father have both gifted me generous amounts of money in the last two years. It's felt very weird to have been on this receiving end of these gifts the last few years because growing up we didn't have a lot of excess money. Both of my (divorced) parents have seen a big increase in income as they've gotten older.

freelancerNfulltimer

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Re: Do you account for inheritance(s) when planning?
« Reply #13 on: July 08, 2013, 08:45:33 PM »
His money was in IRAs and brokerage accounts - a small amount in 4%+ CDs, but mostly stocks and bonds being professionally managed, so it's done very well overall. At this point, I am very grateful for the money, but there is the sadness that he was sitting on so much and could have used it to make his own life better that really gets to me.

I told both of my parents over the years that I would rather they spent down to the last penny and enjoyed their retirement than worry about leaving me anything. I truly wish my dad had done more - he had a pipe dream for the last 25 years about buying lakefront property and building a house, but he never did get around to it... and that breaks my heart.

My mother is probably going to be the same way. She's in poor health now, and not able to enjoy herself with what she's got, and she told me recently that she still hasn't touched her inheritance from HER parents... sigh.

My parents money is just that - theirs. I never figured it into my retirement, and would consider it a really amazing gift if there was anything, and that's how I'll continue to think of it.

That's a very good way of looking at it; as an amazing gift. I get a bit frustrated with my Grandmother sometimes. She dreams of going to Italy but she "can't" but I know financially she could afford to do it in a way that wouldn't be taxing on her physically. When I tell her she should take that dream vacation, she says, "But we want to leave you all a big inheritance." She doesn't want to hear that I would rather she enjoy what they've worked for. My Aunt finally convinced them to get a new AC unit because it's not good for them at their age to be too hot. They didn't want to spend the money on that but when we go out for dinner as a family they don't blink an eye about picking up the check for the whole table.

oldtoyota

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Re: Do you account for inheritance(s) when planning?
« Reply #14 on: July 08, 2013, 09:34:21 PM »
I guess she found some time and a shady lawyer to come to the house while Mom wasn't all there mentally, and well, you know the rest.

My grandmother used to tell me stories like that all the time. She had known many well-off people who had had their money taken from them. In one story, the husband moved in a girlfriend and told his wife of many years that's how it was going to be. I have no idea how the wife ended up destitute (no alimony??) but that is what happened.

My grandmother's neighbor became friendly with a man way younger than she was. As you can imagine, he was after her money. He took her away from her friends. She became withdrawn and he decided they were moving. I am sure he was working in the background to get control of her assets. Unfortunately, the woman had no children and her husband had died decades earlier. She had no one to look out for her. It broke my heart as I'd spoken with her many times, and we'd even had breakfast together once when I was cleaning out my grandmother's house after her death.

And my grandmother's caretaker stole around $1,000 while my grandmother was in the hospital. Nice, huh?

I am pestering my parents all the time to get their papers organized. They say they are doing it, but they have not told me where things are. If they both become incapacitated, I have no idea how to pay their taxes or do anything. It's scary.




CU Tiger

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Re: Do you account for inheritance(s) when planning?
« Reply #15 on: July 08, 2013, 09:57:23 PM »
If my folks are healthy until the moment they die, my sister and I will inherit something.

But if there are big medical bills or they need protracted, skilled care, we will probably split the cost of caring for them.

Therefore I am planning on $0 inheritance. It is on us to Save and invest and plan for our future and that suits me fine.

Michelle119

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Re: Do you account for inheritance(s) when planning?
« Reply #16 on: July 10, 2013, 06:30:28 PM »
No I don't count on any sort of inheritance. That said, my mom unfortunately passed away suddenly a few months back. My dad said that there is some life insurance he took out for me and my sister on my mom's life so we are getting some proceeds. He thinks its about $20k but I haven't heard anything else since one conversation, this would be amazing if we got it since it would wipe out a lot of our SL debt and car loans. And it would essentially allow me to "retire" to be a part-time stay at home mom of future kids a year earlier.

Hunny156

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Re: Do you account for inheritance(s) when planning?
« Reply #17 on: July 10, 2013, 07:03:17 PM »

I am pestering my parents all the time to get their papers organized. They say they are doing it, but they have not told me where things are. If they both become incapacitated, I have no idea how to pay their taxes or do anything. It's scary.

It IS scary, I totally feel for you!  I often tell people my story, if only for the lesson to be learned.  Realistically, the scenario we are in isn't exactly a shocking one.  My sister & I didn't wake up one day and change, this is how we always were, and we were also raised to not get along, so again, no big surprise here.

It is what it is, but at the end of the day, this mess is my parents fault.  It wasn't for lack of $$, it wasn't for lack of lawyers, it was just not worrying about it and thinking everything would take care of itself.  Clearly not the case.  Ironically, several years back, when Mom was still lucid and complaining about how spoiled my sister was, I made a simple suggestion.  Kick her out, let her try to make it on her own, and WHEN she failed, let her come back home.  I surmised that this lesson in reality would make her a more grateful, responsible adult.  Mom coldly informed me that she didn't want to live home alone, and at the end of the day, she wouldn't be around to deal w/the fallout.  She literally said "Not my problem".  Oh, the irony.  Mentally, she's not here to realize how much this truly is her problem now.

Here's another low blow and a reason to get your finances in order at any age.  When I began to suspect my sister's theft, I consulted an elder care attorney.  He advised me to spend all my Mom's remaining savings that I did have access to, and what type of expenses that Medicare would approve.  I spent a good chunk of the money on my mom's funeral expenses.  My parents always advocated fairness, so I called my Dad's funeral director, and asked him to duplicate my Dad's arrangements.  The only differences are that I need to have my Mom flown back to the east coast, and that the casket is mauve instead of black.  I held my breath that my sister would not notice the bank accounts while the checks cleared.

Once she did, I was appalled to get a call from the funeral director.  My sister had been harassing him, demanding a meeting to get a refund of my Mom's pre-paid funeral services!  I'm not sure if you can really go lower than that.  Luckily, since I had signed the contract, my sister had no legal recourse.  I played hardball w/the funeral director when he expressed his unwillingness to get in between two sisters, and suggested he return the funds to me and I would take my business elsewhere.  He got the point, and told my sister to go scratch.  But it was very scary to scramble to "fix" mistakes that were made, only to find someone else going behind your back to undo what you were trying to correct.  Not to mention how totally useless power of attorney can actually be.

Communication and knowledge about family finances is crucial.  I wish more people would realize that, and not leave such messes and wars behind.

pachnik

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Re: Do you account for inheritance(s) when planning?
« Reply #18 on: July 10, 2013, 07:34:46 PM »
I don't count on my parents' money at all regarding planning because it isn't my money.  A lot of things could happen and they could use their money.

My dad hasn't been well lately and I am glad that they could afford to travel while he was in good shape.  I wouldn't feel good knowing that they hadn't travelled and were hanging on to the money for me.

tpozywio

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Re: Do you account for inheritance(s) when planning?
« Reply #19 on: July 11, 2013, 02:56:09 PM »
Don't...if you inherit a windfall you'll be ready for earlier retirement

davisgang90

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Re: Do you account for inheritance(s) when planning?
« Reply #20 on: July 11, 2013, 03:18:58 PM »
As others have said, I don't plan on anything.

If an inheritance is integral to your retirement plan, you need a better plan.

ender

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Re: Do you account for inheritance(s) when planning?
« Reply #21 on: July 11, 2013, 09:09:21 PM »
I have no clue what my parents assets are worth, though they are only about 60.

I hope nothing happens to them because in spite of me asking about things, my parents have no documentation whatsoever which could pass to me should something happen. It would be a mess, that's for sure, and one I wish I could convince them is a risk and hassle not worth taking.

Maybe someday they will talk about something other than, "when you going to spend and live a little?" with respect to money and me.

Iron Mike Sharpe

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Re: Do you account for inheritance(s) when planning?
« Reply #22 on: July 12, 2013, 07:54:22 AM »
I think I'll get one.  But I'm planning my retirement under the assumption of no inheritance and no Social Security.  Getting one or both of those would just be gravy that would allow me to do some traveling.

rubybeth

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Re: Do you account for inheritance(s) when planning?
« Reply #23 on: July 12, 2013, 08:10:06 AM »
I'm not counting on it in any way, though my dad has shown me where all the financial stuff is online and in his papers, just in case something happens to him and mom is too stressed to deal with it. Though my parents are older, both sets of my grandparents lived or are living into their late 80s, so who knows how long my parents will be around, could be well into their 90s. God willing, I'll be retired long before they die. If I did inherit anything, I'd probably want to do something to memorialize them, like fund a scholarship or something.

MooseOutFront

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Re: Do you account for inheritance(s) when planning?
« Reply #24 on: October 16, 2013, 10:13:21 AM »
I account for it only in that it allows me to err on the side of a less conservative SWR and projections.  My brother and I will own land that my grandparents left to us in a generation skipping trust.  My parents retain use of the land while they are alive.  I don't expect this to be available to me for another 10-20 years and even then I don't expect to sell it unless I have to, but it will be there.  Also, barring a future cautionary tale, there will be inheritances from both my parents and in-laws since they all live on fed.gov pensions and have assets and incomes outside of this. Nothing crazy, but we all know how far an extra couple hundred thousand could go.

I guess I feel like I'm playing mental gymnastics to pretend that I won't be getting something of substance, but we're really talking old person money here.  I'm running my mustachian plans in accordance with retiring at 40.  The only affect the potential  inheritance has is that I'm OK assuming things like 6-7% inflation adjusted returns on my old person funds and I'm OK projecting that I will be getting 75% of social security and things like that.

SnackDog

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Re: Do you account for inheritance(s) when planning?
« Reply #25 on: October 16, 2013, 10:27:57 AM »
I'm sure all will be fine but a lot of things could happen to that inheritance before it lands in your bank account.  Grandma and Grandpa, bless their hearts, could lose their marbles and get swindled out of it.   One or both could have health problems which drain a great deal of it.  Grandma could back her Buick Electra over a neighbor, maiming him, and lose a few million in a lawsuit.  Your wonderful brothers and sisters could decide they don't like how the spoils are divided and sue everyone else into oblivion.

I have seen the last example in more wealthy families than I can count.  Someone starts off suing just to keep everything fair, then they get so mad they continue suing to make up for their emotional damages, and eventually they just carry on the legal proceedings out of spite until all the finances are drained.

gillstone

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Re: Do you account for inheritance(s) when planning?
« Reply #26 on: October 16, 2013, 10:43:44 AM »
You shouldn't plan on it being there. You never know what will happen before they pass on including:
- Major medical or legal expenses that wipe out their assets
- A family feud which rewrites the will prior to their death
- A dispute in probate and lawsuits all around after they die
- Major losses due to scams, poor investments, etc...
- Signficant taxes due to poor estate planning

Also, its better to plan to stand on your own and be pleasantly surprised when the money does show up.

Bank

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Re: Do you account for inheritance(s) when planning?
« Reply #27 on: October 16, 2013, 10:46:03 AM »
Someone starts off suing just to keep everything fair, then they get so mad they continue suing to make up for their emotional damages, and eventually they just carry on the legal proceedings out of spite until all the finances are drained.

Jarndyce v. Jarndyce, for those of us who read Dickens' BLEAK HOUSE while getting their wildly impractical liberal arts undergraduate degrees.

snuggler

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Re: Do you account for inheritance(s) when planning?
« Reply #28 on: October 16, 2013, 06:09:06 PM »
I told both of my parents over the years that I would rather they spent down to the last penny and enjoyed their retirement than worry about leaving me anything. I truly wish my dad had done more - he had a pipe dream for the last 25 years about buying lakefront property and building a house, but he never did get around to it... and that breaks my heart.

My mother is probably going to be the same way. She's in poor health now, and not able to enjoy herself with what she's got, and she told me recently that she still hasn't touched her inheritance from HER parents... sigh.

My parents money is just that - theirs. I never figured it into my retirement, and would consider it a really amazing gift if there was anything, and that's how I'll continue to think of it.

Great way to think about it. I would much rather my parents enjoy it- they earned it, and they deserve it. I am just so grateful for the intangible things they have given me, and for the fact that they could also help me with the tangible things when I couldn't yet fend for myself.

I think the main reason that I feel really creeped out by counting on a parent's inheritance is that I do not EVER want to even think about my inheritance if I ever have to take care of my parents/make their healthcare decisions/make their financial decisions. By focusing on my own retirement stash, I can ensure that thoughts about my inheritance will never even temporarily enter my brain, and I can have full confidence that I made the choices that were best for my parents. They have chosen me and my sister to be their stewards in case they cannot care for themselves, and I take that responsibility very seriously.

Hoerwolle

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Re: Do you account for inheritance(s) when planning?
« Reply #29 on: October 17, 2013, 04:32:27 AM »
I don't count in any inheritance into the plans for me - but I slightly do it for my wife. We have a paragraph in our pre-nuptial agreement, that (among other things) inheritances are not part of the marriage. I am calculating and planning for myself, but I know that my wife will be well off no matter what. So I do not need to plan for her.

She will inherit enough to go straight into retirement, if she wants to. She already has more than one stock account where her parents have poured money into over the years, some medium long invests and some long term invests. And even some emergency funds. I have no idea, how much money she has right now, I doubt she does. I never thought about it until it more or less bit me in the nose, but my wife's family is well off.

I am working to get rid of the last bit of my debt with my own money ;) (I checked a few months ago, the fees to get rid of it right then were higher than the interest I would pay until it's gone in december)

I will probably inherit some money and part of a house (three siblings) from my parents at some point in the future, but right now I enjoy seeing them spending their money for their own fun by taking vacations and visiting places all across europe. I enjoy the cards they send me a lot more than any amount of money they could inherit to me.
« Last Edit: October 17, 2013, 04:37:03 AM by Hoerwolle »

happy

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Re: Do you account for inheritance(s) when planning?
« Reply #30 on: October 17, 2013, 06:16:57 AM »
I don't take any possible inheritance into account in my FI plans. My goal is to self-fund my retirement, but if I do receive  something extra, I will try to grow it for my kids. .

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Re: Do you account for inheritance(s) when planning?
« Reply #31 on: October 17, 2013, 08:45:37 AM »
I'm in the majority here:  Don't count on an inheritance.  If it happens, you're better off than you'd expected, but save for yourself as if you'll end up with nothing.  Better safe than sorry. 


kkbmustang

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Re: Do you account for inheritance(s) when planning?
« Reply #32 on: October 17, 2013, 08:46:04 AM »
My husband and I both assume we will receive $0 from either set of parents for purposes of retirement planning. However, I'm certain we will receive pretty decent inheritances from both sides. That being said, I sort of hope we don't. Because that means our parents did all the traveling they had hoped to do in their respective retirements and didn't work hard their whole lives without enjoying the rewards of their efforts.

My husband's parents are both in their 70's and my FIL works maybe 10 hours a week and will continue doing so for another year, then he'll fully retire. Right now they are taking 3-4 international trips each year while they still physically can, although they are definitely slowing down. They want to go to China and a couple more countries, then they'll focus on domestic trips as they age.

My parents are in their mid-60s and both still work. I can see my dad scaling down to part time in a few more years.  They plan on extensive travel once they retire in a few years.

All of that being said, we have a general idea of the financial situations for both sets of parents and, absent horrible, protracted medical expenses, we expect to inherit quite a bit from both. But we don't count on it or even talk about it when we discuss our own retirement planning. We will be able to retire on our own merit with plenty of assets to sustain us. I can't imagine, given our anticipated savings once we pull the retirement trigger, if we do inherit from our parents that there is any possible way we could spend it all.

Norrie

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Re: Do you account for inheritance(s) when planning?
« Reply #33 on: October 17, 2013, 09:06:43 AM »
Nah, there's no money in my family. My parents lost money when the stock market crashed, and then they were both diagnosed with terminal cancer, and had very long and very expensive treatments (and are thankfully still with us). Despite being insured and even having a separate cancer policy, they were left with six figures worth of medical debt.

I've been trying to get my parents to get their finances/paperwork in order, so that if anything happened to them, I'd know what to do, but it's like talking to a brick wall. So we're trying to lead by example. But it would seriously be a nightmare if we lost them any time soon.

little_owl

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Re: Do you account for inheritance(s) when planning?
« Reply #34 on: October 17, 2013, 10:00:42 AM »
I agree with the majority here, dont count on anything...one, because it is sad to think about and two, because none of us know what the future holds.

H and I hope we are able to retire when our parents are still living, and even take some trips with them.  That would be the ultimate!!!

Dezrah

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Re: Do you account for inheritance(s) when planning?
« Reply #35 on: October 17, 2013, 10:59:47 AM »
One day my younger brother made a comment about how one day he would inherit a ton of money from them.  He must have been about 17 at the time.  My mom looked at him and said, “Your dad and I are going to live a very long time and we intend to spend every cent of what we have.  You’re not inheriting anything.”  When she told me this story, my reply was, “Well yeah, that’s something I’ve always known.  Where the heck does he even get an idea like that?” 

In truth, I’m pretty sure they’ll leave behind a huge amount of assets in the form of their retirement home.  Even then though I suspect it will be more of a burden than a joy trying to split an expensive piece of vacation real estate four ways (first world problems, I know).

dude

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Re: Do you account for inheritance(s) when planning?
« Reply #36 on: October 17, 2013, 11:17:45 AM »
man, interesing topics, and the cautionary tales in this thread are gripping!

From my family - ha!  No.

But my wife is an only child, and her parents' house (which they will live in until they die) is in her name.  Beyond that, I don't know, and I'm not expecting anything.

So, in that sense, yes, I'm planning on an "inheritance" of sorts -- namely, a paid-off house.  But if for some crazy reason (I don't know, maybe my wife had to liquidate it to help them in some way), we'd still be fine, though we would either have to rent or have enough equity/appreciation in our place to sell it and buy something very modest -- or just move to Latin America.

MooseOutFront

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Re: Do you account for inheritance(s) when planning?
« Reply #37 on: October 17, 2013, 11:29:10 AM »
H and I hope we are able to retire when our parents are still living, and even take some trips with them.  That would be the ultimate!!!
I like this.  The sooner we can retire the more realistic this possibility is.  My parents would love to sponsor such trips if we only had the time...

dude

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Re: Do you account for inheritance(s) when planning?
« Reply #38 on: October 17, 2013, 11:35:16 AM »
btw, MooseOutFront, as a huge fan of "Vacation," I LOVE the name!  hahaha!

Albert

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Re: Do you account for inheritance(s) when planning?
« Reply #39 on: October 17, 2013, 11:39:44 AM »
I'm not getting any substantial amounts of money, but I'm pretty sure parents will leave behind both their city condo and country house (both worth about 100k euros) debt free to me and my sister. I'm not counting on it though particularly considering that family history, parents age and health indicates that they will live another 20-25 years (and I hope they do!).

NeverWasACornflakeGirl

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Re: Do you account for inheritance(s) when planning?
« Reply #40 on: October 17, 2013, 11:56:09 AM »
I wonder how many other people are like me, reading this post and thinking, "Inheritance, what inheritance??"  I have to put off my retirement so I can take care of my parents!  ;-)

ruthiegirl

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Re: Do you account for inheritance(s) when planning?
« Reply #41 on: October 17, 2013, 03:33:32 PM »
I wonder how many other people are like me, reading this post and thinking, "Inheritance, what inheritance??"  I have to put off my retirement so I can take care of my parents!  ;-)

I second this.  There will be no inheritance.