The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: mustachecat on October 03, 2012, 09:00:01 AM
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Yes, it's morbid to think about, but do you?
I'm not sure for myself. My parents could easily leave a significant estate, and given their very modest material lives, they probably will. Most likely, I'll inherit everything (I'm an only child).
And let me be clear: I don't think my parents SHOULD leave me anything. They've worked hard all their lives, and their money is theirs to do with whatever they want. If they spend it all down, I'd be happy as long as they got enjoyment and value out of it.
In any case, I haven't included any amount of inheritance in my financial planning.
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I know my parents could leave a pretty sizeable estate too. I don't expect/plan for anything. I agree that they worked for the money and should enjoy it however they like. I think they'd at least leave their house - even if they spent every single dollar. I hope to leave quite a bit to my own kids - by building a big pile of dough and living off of the returns only. Tough topic to think about though.
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No, they don't have much. I am more worried about the potential costs as they age.
As an aside, I think this can affect a persons view on spending - I have a good friend whose father is quite wealthy. My friend lives modestly overall, lives where he wants, and has a job that doesn't pay much, but he has spendy eating out/vacation and classic car habits (pretty much spends entire income on these two things) and doesn't save a dime. I think this is the result of his father has always served as a backstop/emergency plan, if you will, and he knows he will get a sizeable inheritance.
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We both have very successful, frugal parents. (Well, my mom isn't frugal, but my dad is. Both of The Hubs' parents are frugal.) We will likely inherit a significant amount between the two. But we assume and act as if we will inherit nothing. I wish I could say the same for our siblings.
We've told both sets of parents we'd prefer that they spend every last dime since they worked so hard for it.
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Probably; my mom is a "don't touch the principal" sort of investor/spender, has a 'stache, has health insurance through her pension system, and has a reasonably decent long-term care insurance policy, and a propensity to plan ahead (e.g. will likely downsize/move to a retirement community etc. before such are really necessary).
OTOH I am not planning on it and encourage her to spend her money on herself, including in ways she finds extravagant/frivilous.
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Yes, my parents have always been smart with money. I'd bet they are close to being able to retire if not already able (they are in their mid-50s).
I expect it but am not counting on it.
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From my parents? No way. Both will be subsiding on SS entirely. I'm more worried about having to support them than inheriting from them.
On the other hand, my wife's parents are pretty frugal, were well paid when they worked, retired at 51, and paid for our wedding. I don't know their actual worth, but her father was an Actuarial Consultant for a retirement/benefits company, so I'm sure he has planned out his retirement to the penny.
Either way, we don't plan on any sort of inheritance. Even if we did, they have longevity in their family. We likely won't see a possible inheritance until our 60's or longer.
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I don't expect to inherit, just as I don't expect to get social security. My main goal is to make sure my own financial engine is operating on all cylinders, capable of taking hits or windfalls, but not planning on specifics. I've successfully treated the whole issue as irrelevant to my life.
Also, I just hate the dynamics that money can bring into family life. It's unwise to ignore the issues, yes, but I don't want great expectations to cloud relationships, which are far more important.
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We both have very successful, frugal parents. (Well, my mom isn't frugal, but my dad is. Both of The Hubs' parents are frugal.) We will likely inherit a significant amount between the two. But we assume and act as if we will inherit nothing. I wish I could say the same for our siblings.
We've told both sets of parents we'd prefer that they spend every last dime since they worked so hard for it.
That's the right attitude and right not to plan for, all too often parents will leave the inheritance, or a larger share of it, to the ones that need it more in their eyes, even if it is due to irresponsibility/keeping up with jones lifestyle and the responsible ones are viewed as being able to take care of themselves.
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My parents have always been smart with money and are fairly well off in their retirement. That said, I wouldn't be at all surprised if they managed to totally break even and reach the end of life with everything perfectly spent, they are that good at planning. I imagine that my sister and I will share a modest inheritance in the sale of their house, as well as having a truly epic garage sale. But I am not counting on or expecting some great inflow of cash from my parents.
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Both sets of parents are very egalitarian, so I don't see that happening. We've both had discussions with our respective parents about the inheritance issue in general terms. (I have no idea about net worth for either set.) Whatever is left will be split evenly among all kids.
For my side, my brother has complete spendthrift tendencies, so I've discussed with my parents the idea of leaving amounts in trusts that will disburse in chunks at certain intervals. Sort of saving him from himself. They won't do that for him and not me, so that will likely happen for both. I don't care either way for myself, but it makes sense for my brother.
For the Hubs, he has two siblings. One is bat shit crazy and a complete disaster. The other could give MMM a run for his money. The Hubs and the frugal sibling are trustees for the bat shit crazy sibling.
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My grandparents were (gma still is) very frugal people. Grandpa bought his house with one income and 3 kids. He did all the work on them himself. Whatever is left of his estate will be split 3 ways to the kids. My aunt and uncle died last year, so their portions get split between their kids.
My mother generation did not develop the discipline with money that my grandparents had. My cousins aren't much better. I hope to teach my sister.
To answer...Whatever is there will be absorbed by people who will squander it. I'll see nothing but a great example of what not to do. I'm getting used to it and have found it very positive over all.
I have seen what waste looks like. I have seen what frugal looks like. I'm making really good decisions for myself now and inheritance will not make or break me. These lessons are priceless.
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I really appreciate all the responses. I've wanted to ask this question for years, but it's not exactly a nice dinner conversation.
Seems like most of us are expecting something, but counting on nothing.
I bet this topic is a lot less taboo for the very wealthy, for whom estate planning really matters.
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Given my family history, I'd wager that my GMA's 3 kids will inherit her house minus the 20k or so left on the mortgage. The money from the sale of the house will be spent in about a year. The alternate outcome being that my mom gets the house, then loses it in 2 years.
The only thing I expect to inherit is responsibility for my siblings.
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Haven't a clue. My folks are very closed-mouthed about finances. It's just not polite in their view, and I respect and understand that sentiment.
Anything gotten would be a boon, and under no circumstances an expectation.
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My grandma has willed most of her estate to charity, but she says I get the piano :). Hopefully I'll have a place to put it by then.
I probably will inherit something from my dad eventually unless his new wife spends it all, but he's not even 50 yet so it shouldn't be any time soon. I intend to be FI long before then.
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No.
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Nope not at all, from either side of the family. My parents don't have much in assets to speak of, and will be relying on continuing work and social security payments. They were never lavish spenders - just the unfortunate circumstance of raising 4 kids in a HCOLA and never quite being able to recover from a job layoff. A few years ago they relocated to a much lower cost of living area in the midwest. To echo others, I'm also preparing myself to support them in their later years, with only a little help from my older siblings. I've never had a frank discussion with them about the next 25 years, but I can see the writing on the wall already.
My in-laws are pretty much the opposite - high income earners, but high spenders as well. Snowbirds, new cars, lots of cruises. My father in law always jokingly warns the kids that they're spending their inheritance, which doesn't bother me. They've always been generous - paid for my husband and sister in law's college education, and always try to give us money/pay for things. I just hope they save money for the twilight years as well.
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I plan to be FI before that happens so I don't expect anything.
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My grandma has willed most of her estate to charity, but she says I get the piano :). Hopefully I'll have a place to put it by then.
I probably will inherit something from my dad eventually unless his new wife spends it all, but he's not even 50 yet so it shouldn't be any time soon. I intend to be FI long before then.
Score Piano!!! I should also mention that i just got what i assume to be the most valuable items in GMa's kitchen, the kitchenaid mixer and a really nice meat cleaver...Heirlooms are good. :)
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Well, I'm the age of many of your parents so I've already got my inheritance...45k in an IRA plus about 15k in cash.
I don't have any kids but my heirs will get a bunch to divide up (7 figures) unless they piss me off enough that I leave it all to charity. Or I figure out a way to spend it all.
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Nope. Or better to say, didn't inherit anything, and didn't expect to.
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No, my parents will be relying on SS and have no house and negligible retirement savings. My husband is already providing minimal support to his father (supplements his monthly spending money and pays his phone bill), who has moved from low income housing to assisted living in the past few years. The other set of in-laws (since his mom remarried) have 4 kids between them and we are considered the responsible ones -- the others are not doing well financially, so if there's an inheritance there, I assume they would get the bulk of it.
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I expect to inherit--my dad is very open about his finances and his plans for his estate.
I've never let that factor into my plans, though. If I did, I could retire today, but I strongly believe that I am responsible for earning/saving/investing for myself. Anything beyond that is just a bonus.
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Nope. :) Even if I did, it would never ever fill the hole in my heart that would be there when my parents go. Well, except maybe my dad's car. It is pretty sweet. :P
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This is just a wild guess but I'll probably get about $250,000 from my Dad. My brother would also get $250k. Dad's house is in DC but I'm guessing he will sell that and move to Florida when he retires so he should also have a paid off home to sell or rent out. This would all depend on whether he remarries again.
I doubt my mother will leave us anything. She's a high income earner but she spends it all. I suppose her house will be paid off by the time she'd be in the realm of dying from old age which would leave something for me and my brother to split. Maybe $70,000 each?
My paternal Grandparents are no longer living. I received $4500 from my recently departed Grandma which I will be using to replumb my home (needed).
When my maternal Grandparents pass away I will inherit 3% in a family business which is fairly profitable and may stay that way for many years. Of course the patent will probably expire before they pass away so who knows. My Grandparents have sizeable assets that I'm sure will get split equally among my mother and her siblings. My mom will probably immediately share her inheritance with me and my brother and spend all of her bit.
I expect to inherit a fair sum of money. I don't plan on it though. I also don't plan on SS. (I'm 28 y/o)
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My parents just retired (Mum only last week!), so hopefully they've got quite a bit of life yet. I think they have the plan to skip a generation though - i.e. their grandkids get the money, since they're assuming me & my brothers will already be set up in life.
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No, they don't have much. I am more worried about the potential costs as they age.
Pretty much this.
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I already inherited about 200K from my (living) Grandfather. He gave large gifts for a decade or so to avoid paying taxes on his estate. Paid for college for me and now makes up a good amount of my net worth (I guess I have no idea what percentage it actually is). He stopped giving anything about 10 years ago, he says because he started getting slightly worried about how much he had left (this was around the first market crash). Though I also suspect he started to worry that we might get corrupted by the money if he kept giving it.
I certainly am not "counting on" ever getting anything more, but I am including in my planning that I will most likely get a similar amount at some point in the future (hopefully not anytime soon, but he's in his 90's). I don't know about the rest of you, but I have a "minimum" number for FI and an "Ideal" number for FI. They're only a couple of working years apart, but it will be hard to keep working after I hit my minimum, given that it seems like I'll get to my ideal anyway.
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Great Topic I think family economics/dynamics is a great topic.
I really have no idea if I will inherit anything or not. My mom has a fairly sizable next egg (maybe 1mil plus a pension) but I know I was in the will for $1 at one point. I think she has long term care insurance so my sister maybe in for a fair amount of money. She also has a younger husband so he will probably get some. My father may leave a little in the way of a house but not much and probably not for another 30-35years.
My wife's parents don't have a ton just a house probably. Its going to be crazy when they go because they wrote one son out of the will so it will be split between the other two. The one that got written out of the will will probably hold a huge grudge. I anticipate we probably won't take anything from the estate just because we have no desire to get involved in the in a dispute with her siblings.
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No - right now we are using a fair chunk of my Mom's assets to pay for her assisted living costs (>$5k/month). She has dementia and diabetes and so needs a bit higher level of care, which increases the cost. All of us kids are just hoping that she has enough assets to last throughout her life. I don't know about the rest of my family, but I know that I don't expect any inheritance, since we're spending a goodly chunk of it now and that side of the family tend to be long-lived.
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Yes.
My maternal grandparents are quite well-off, and my parents are solidly upper-middle class. My aunt (mom's sister) has done quite well for herself as well as far as I can tell from her living situation. I'm an only child and my aunt doesn't have any children, so I'm sure I'll come into some money down the road. But I have no idea when or how much, and I don't plan to sit around waiting on the charity of my ancestors to achieve FI! I'd much rather still have my grandparents around than have more money, by a long shot.
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Yes, likely 7 figures. The wife's family is phenomenally wealthy so I suspect we'll get a sum at some point.
We act as though we won't get anything, save 70% plus, and generally never ask them for anything.
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Seems like most of us are expecting something, but counting on nothing.
Up until 18 months ago I wouldn't have expected anything. My father was living as though he barely had enough pension & Social Security.
However between mid-stage Alzheimer's & multiple myeloma, things have changed. He's doing "as well as can be expected" now with medications (and after chemotherapy) but there's just no way to predict his longevity. After extensive research, the best I can say is that it's more than one year and less than a decade.
I'm now his conservator, too, so I've learned that for the last 25 years he's been living on half of his pension/SS and investing the rest in equity mutual funds. I suspect that he won't outlive his money. Any inheritance will be a very meaningful sum to my brother and could put him over the top to ER. Of course the exact opposite is true for spouse & me, since we're already ER'd, and we honestly have no idea what to do with the money. My Dad's father spent 14 years in a care facility with dementia (but not Alzheimer's) so my spouse's cynical plan is to use my share of any inheritance to pay for my eldercare expenses.
I've tweaked Dad's asset allocation from 85% stocks down to about 35%/15%/50% equities/bonds/cash. His long-term care insurance will cover most of his expenses through late 2014, and after that he'll still have his pension/SS to slow the spend down. There's just no way to predict what the best use of the money could be until we actually end up going through probate.
My brother will get his fair share so there's no need for me to disclaim my share to him. I worry about affluenza & entitlement for our daughter, but she's almost 20 years old now and over the next decade I'm pretty sure I'll stop worrying about that. I mostly spend my time wishing Dad had not lived such a frugal life, but he ER'd at the age of 53 and enjoyed over two decades of the things he likes to do.
Ironically Alzheimer's has taken those memories. He currently thinks he's on a protracted 1960s business trip, working at the care facility and being allowed to stay there on weekends until he finishes his project. He says he wants to earn enough money to give some to us when he dies. We reassure him that he's done a great job and that he should do what he wants, and he says he has nothing that he wants to spend the money on. A few minutes later the entire conversation starts from the beginning all over again. At least it always has a happy ending, so he feels good about how well he's taken care of us.
One lesson learned from his decline into Alzheimer's is that it can cost $10K of medical & legal expenses before things settle down. I was also another $20K into the care facility expenses before the long-term care insurance claim was finally approved (and backdated). This was for a guy living a very simple life with minimal possessions in a 2BR apartment, so I can't imagine how much worse it would have been with real estate or business partnerships or other entanglements. I never expected to be spending an emergency fund on those kinds of expenses.
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No. It's far more likely that I'll be supporting them as they grow old.
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Interesting topic.
We will.
My parents RE in their late 40s and have sufficient funds for them to live off so my brother and I will inherit half each. My brother is shocking with money and is 35 with nothing plus some debt, so I am hoping he will settle down then and invest wisely.
My parents are in their late 60s, but not in the best health, so I think 10-15 years.
We will be FIRE next year, so we will invest the money for our children and let it roll over and over.
DHs dad has passed away and his mum is in her 80s. We will inherit a small amount from the sale of her house, but DH is one of 6 children so it wont be much.
But I really have no idea what MIL is worth as their family doesn't talk about money, whereas my family has discussed at length the will.
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The only thing my parents have of value is a house, and unfortunately, I think they will have to sell it and move somewhere cheaper to retire.
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No, I don't expect to inherit anything. My father is in his mid-60's, up to his eyeballs in debt and at least 10, if not 15 years from being able to retire (he's a dentist). He also still has kids at home, the youngest is 12. There are six kids in all, and also his wife is quite a bit younger than him, and even less fiscally responsible than he is. Even if he manages to retire okay, there will be nothing left by the time she's finished. My husband's parents will likely leave something, they live fairly frugally. But he is one of five kids, so there will be a lot of people to split it amongst.
I don't actually expect to outlive either my parents or his. My mother died when I was 8, her mother died when she was 7, her mother's mother died when her mother was 2 and so on. I've researched my maternal line back 7 generations and each mother died before her daughter's 10th birthday. Now, the causes of death that I know of (only have that info going back 3 generations) were not anything genetic. My mother died in a car accident, my grandmother in a wheat harvest accident and my great-grandmother died from a suspected infection in the pre antibiotics days. So there isn't any family history that directly makes me more likely to die young, but I have simply never expected to live long enough to see my children into adulthood, let alone living long enough to bury my father.
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Yes. From grandparents and parents. From wife's grandparents and parents.
No, I don't account for that just like I don't for SS.
However, I don't like the idea of encouraging a loved one to spend more than they have to just to "enjoy" what they had earned over his or her lifetime. Seems like consuming for consumption's sake. I'm not selfish and would be perfectly fine if I wasn't receiving anything from relatives. The relatives I will receive inheritance from are currently all able to live comfortably and have expressed enjoyment in passing land, cash, book collections, family heirlooms, etc. on to other generations of the family to enjoy. I like this idea myself. I would love to be able provide my own children one day with important articles to pass down along with cash and perhaps provide the grandchildren with a little money to help with a wedding or college costs.
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The only thing I am expecting is to inherit the cottage as I can't see it leaving the family. In terms of money, etc I expect my parents to use what they've earned and eventually maintain on my mothers pension. I am very fine with this and hope they enjoy.
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We are not expecting anything. The only ones with potentially enough to pass any on are my mom's parents, and they are 91 and 93 and have 3 kids and 7 grandchildren and I have no idea how many great grandkids. I think they are likely to split things evenly between everyone, or just their 3 kids. Either I will get very little or nothing. I'd prefer that they gave to their kids because my mom is completely broke and living on social security and a pension for a total of $1,100 a month. It's just not quite enough and any help my brothers and I get taking care of her we will be grateful for.
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I am not sure what to really expect, but it doesn't matter since I will have been FI for many years (and it better be many years Mom and Dad!) before even having to think about it. My parents are middle class and are relatively decent with money (I would not call them frugal however), so I imagine there will be a small sum for me and my brother. Possibly the same on my in-laws side, though they are not as careful with their finances. Either way, I will probably just donate to charity anything extra I receive in inheritance (whatever seems appropriate depending upon the person), it would do much more good for someone else at that point in my life.
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Yes. From parents.
+1
No, I don't account for that just like I don't for SS.
+1
However, I don't like the idea of encouraging a loved one to spend more than they have to just to "enjoy" what they had earned over his or her lifetime. Seems like consuming for consumption's sake.
Another +1...although I would add that if you do encourage a parent to "enjoy it while you can", and they take your advice....and then their health deteriorates later in life, without sufficient money to pay for adequate care, which will you do:
A) Let them die a miserable death, alone and suffering
B) Become their full-time primary caregiver after putting your entire life on-hold,
C) Spend down your portfolio significantly just so they have a meager sustenance end of life for 2, 5, 8 years - and then be left with far less of your own stash after they pass on, and be forced to work long after you wanted to retire, just because you told your parent(s) to live it up?
Yes, my parents raised me and sacrificed for me, and I would do the same for them in return (and have already)...but I'm not going to necessarily encourage them to spend frivolously just so they don't die with more than $50 to their name, at the risk of jeopardizing my own sacrifices and delayed gratification.
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There are many ways an expected inheritance may disapear.
The largest increase in divorce demographics are seniors. Ask any guy, it is expensive.
Many men who lose their wives replace them with newer models who go through cash faster than the older model. The companionship is worth it to them. Your share may be reduced by what is given to your step-mother and may be divided by her children who get an equal share of Dad's cash.
Medical bills can wipe out a nest egg in a few years.
Money can be spent, lost or given away so there may be nothing left.
Trillions of dollars of real estate value has been wiped out in the last five years. Usually the family home is the largest asset in most estates. Often there will not enough time to recover all the losses. Thanks Wall Street.
Baby Boomers are more selfish than their parents and leaving a nest egg for junior is not the priority that it was previously. Spending habits in retirement is different for them than their parents. They retire sooner, live longer and spend more.
Money has ruined many relationships between parents and children. Some parents use it a bargaining tool.
Remember your spouse or other creditors may have a claim on it after comes in.
Wills can be changed with the stroke of a pen. In today, out tomorrow. Sorry about your luck.
Seniors are easy targets for cons. Remember suckers are born evey minute. Right Bernie.
Bottom line. If it happens and you do get the windfall treat it as bonus or a lottery win. Do not expect it or count on it. It is not yours until the death of the second parent and Uncle Sam takes his increasing share. I understand that the tax free amount of an estate decreases on January 1st. Someone has to pay for the deficit.
Good luck.
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There are many ways an expected inheritance may disapear.
The largest increase in divorce demographics are seniors. Ask any guy, it is expensive.
Many men who lose their wives replace them with newer models who go through cash faster than the older model. The companionship is worth it to them. Your share may be reduced by what is given to your step-mother and may be divided by her children who get an equal share of Dad's cash.
cdngb, I'm hoping you didn't mean this to sound as offensive as it does.
Historically, women have actually ended up in worse financial situations post divorce than men have, due to factors such as lower salaries, years out of the workforce to raise kids (therefore less contributions to pension plans, etc).
Nowadays, that may no longer be true as such a general rule, but I can tell you that of my friends and family members who have gotten divorced, it's still mostly the women who have ended up in more precarious financial situations. In some cases, the women have walked away carrying the debt load incurred during the marriages, only because their ex-husbands are such irresponsible idiots with money that they had no hope of getting any assets out of them. One as much as told my friend that if she tried to get him to pay any of the debt (which was in both their names) that he'd just declare bankruptcy - leaving her on the hook for it anyway. (May I say that amazingly, she still left him the car, because she knew that he needed it for his job more than she did - not all women are out to screw their exes, even in the face of provocation!)
I'm not saying that all men are gamblers, deadbeats and idiots - just that some of my friends' husbands have been - but that there are stories on both sides and that generalizations are dangerous.
As for using the same terminology for women as you'd use for cars ... it's pretty offensive, actually, which I suspect you'd realize if you stop to think about it. Please, don't.
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You are correct. I should have said anyone not guy. Sorry.
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Appreciate your response. Thanks.
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No clue. Parents are divorced and about 65 in reasonably good health. Probably around ~1 mil each in savings including their house. By the time they do pass away I expect medical costs or routine withdrawals to have more or less eroded most of their savings. Oh well, they put me through college.
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Yes, but I'm only factoring that in my ER as backup funds.
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Expect....a loaded word. Well, I'm also in the boat of probably having to help my own parents so I know I will not inherit anything from them. My husband is a different story. His parents have been reasonably responsible with money. Both parents worked and saved and they have a pension, investments and SS. And both of my husband's parents had their last surviving parents die within the last few years leaving them both estates worth over $250K. They'd already retired with all they needed at that point. My husband's 30yo sister and her elementary school aged child live with and are completely supported by my husband's parents. Honestly I don't know if anything will be left of the "estate" in 10 years time with that kind of unexpected drain on their finances. We've never made any possible money part of our retirement funding plan. It will be a help, surely, if such an inheritance comes about, but we aren't counting on it.
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I am not planning on anything, and it would be stupid of me to do so. I am 33 and still have 3 living grandparents. My parents are young, father retired early from corporate work, has his own lucritive business to keep him busy. My mom works 3 days a week to stay busy / have health insurance paid for. I suspect due to the great health of everyone in my family, that even with substantial nest eggs they will live a very long time. Wife's family is pretty much the same exact situation, though they are a bit older. So once you get through that layer of uncertainty, Then I have 2 siblings, wife has 3 siblings, so there would be splitting there. IF any windfall ever came my way from inheritance or any method, It would probably put me over the edge to ER earlier than I am projecting, but my ER dream seems to be different than most - I want to retire from one job and take up another that I can do out of love of doing it, not necessity of the paycheck.
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I don't expect anything. Like many others have said, my financial plans do not account for any kind of inheritance.
My parents have been divorced for quite some time now. I could possibly receive some money from my mom, though I know she doesn't have a ton. What she has would probably be split between myself and my sister. I highly doubt I would get anything from my dad, and I'm just fine with that. I don't think he has much.
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Nothing of meaningful financial value, no. My parents are going to need every penny and every bit of equity in their house to fund any kind of retirement; the in-laws have money, but they are talking about buying a second Porsche, so I'm expecting that they'll have burned through most of their cash over the next 20 years, and what's left after the siblings are done squabbling will be negligible. (especially our share, as such squabbling is just too distasteful to indulge in, no matter what the ROI, and we will almost certainly the least in need).
I'm sure a few heirlooms will show up and have massive sentimental value -- which, if you bring it to Starbucks with 3$, might just get you a coffee.
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I expect I'll get something, though it really doesn't matter to us early retirement guys does it? Even if both my parents only makes it to only 75 then I'm still going to be 45, and retired already on my own. What if my dad makes it to 105???? I'll be 75 haha!
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Given all the hard drinking, smoking, and drugs I've done in the past, I fully expect to bequeath rather than receive.
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Yes, it's morbid to think about, but do you?
I'm not sure for myself. My parents could easily leave a significant estate, and given their very modest material lives, they probably will. Most likely, I'll inherit everything (I'm an only child).
And let me be clear: I don't think my parents SHOULD leave me anything. They've worked hard all their lives, and their money is theirs to do with whatever they want. If they spend it all down, I'd be happy as long as they got enjoyment and value out of it.
In any case, I haven't included any amount of inheritance in my financial planning.
Yes and it IS depressing. My father had to twist my arm to get me to come sign all of the paperwork at his bank. I put it off for months. I don't have any financial plans based on an inheritance however. He retired at 54 and is doing his globe trotting thing, I'm just mad he doesn't call to let me know when he is about to be leaving the country.
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I know my parents have some significant assets, and there is pension money to provide for some expenses so they may have a sizable amount left if they manage it well. I think there is a good chance the great majority of it will be tied up in a lake house, and it's possible they will try and set up a fund to ensure the family can continue to use it for quite a while. I don't like the idea at all personally, but it's their choice and they can do what they want. But in the end I would say I can reasonably expect some inheritance at some point, but I don't factor it into my decisions at this point.
I'm hoping they are able to leave some for my sister and brother who could use the money a lot more than I can. I have no idea whether any assets I'll eventually receive will be sizable enough to make a difference. I hope to be FI before that time, and any assets from them would simply be nice insurance. One personal goal I have is to be FI with enough money on top of that to invest in 3rd world countries in ways that benefit them and in which profit is only a distant and doubtful possibility. It would take time that I would only have through being FI, and money I could only invest if I did not need it for FI.
I would also love to tell my children something like "The day you can prove to me you are FI, I will add $100,000 to your finances to show my level of respect for your accomplishment. I will know at that point you are able to be responsible with finances and spend the money wisely." I think giving money to any of my children who have proven they cannot handle finances would be a waste, but that's easy to say at this point, it would be hard to implement that in real life...
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I would also love to tell my children something like "The day you can prove to me you are FI, I will add $100,000 to your finances to show my level of respect for your accomplishment. I will know at that point you are able to be responsible with finances and spend the money wisely." I think giving money to any of my children who have proven they cannot handle finances would be a waste, but that's easy to say at this point, it would be hard to implement that in real life...
I love that idea, mainly because gifting it earlier makes them less independent (see: discussion in The Millionaire Next Door book), but your idea does not.
Filed away for future reference.
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My mother has a rental house, plus her own house, which I will inherit (assuming she doesn't sell the rental).
Since I don't really believe in inheritance, morally, my plan is to rent them both out at cost, to someone who is doing something to make the world a better place. In other words, (assuming they are both paid off), property tax, insurance, maintenance, etc, divided by 12, would be the rent, which should be well below market rate for rent in this area (which is the point of an investment rental property).
Instead of just looking for tenants with a reliable job, good credit, etc, I would require some number of volunteer hours, working at a low-pay political advocacy job, or something equivalent, where they can't afford regular rent because they spend their time do-gooding.
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Probably.
My dad passed 5 years ago. I inherited about $10k.
My mom passed last year. Her hubby my stepdad earned the money, and we three kids are in the will because he didn't have any. But he could always remarry because he's only in his 60s. I just want him to be happy.
My grandpa had some money, several hundred thousand. But he remarried when my grandma died. The money is in trust and doesn't get disbursed until she dies. I get 1/3 of my mom's 1/4 of the girls' share. The sons get a lot more. Well, the second wife is 95 and has outlived 2 of the 7 kids and will likely outlive at least one more. Which is awesome. I love her to death. They married in the early 80s.
The amount we could inherit from all sources is less than our net worth.
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I don't expect anything from my parents or from anyone else. I'm guessing I'll be fully supporting at least one parent at some point in the later future. It's 100% on me, as my sister has zero assets to mention. It's a sensitive subject to me, I've tried to bring it up the past few years without success. My family people tend to die young or live into their 90's healthily, so a little hard to predict on that front.
GF, likely future wife parents are good with their money and I'm not overly worried about their future situation.
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I would also love to tell my children something like "The day you can prove to me you are FI, I will add $100,000 to your finances to show my level of respect for your accomplishment. I will know at that point you are able to be responsible with finances and spend the money wisely." I think giving money to any of my children who have proven they cannot handle finances would be a waste, but that's easy to say at this point, it would be hard to implement that in real life...
I love that idea, mainly because gifting it earlier makes them less independent (see: discussion in The Millionaire Next Door book), but your idea does not.
Filed away for future reference.
That's brilliant. Also saving that idea for when I have kids.
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I would also love to tell my children something like "The day you can prove to me you are FI, I will add $100,000 to your finances to show my level of respect for your accomplishment. I will know at that point you are able to be responsible with finances and spend the money wisely." I think giving money to any of my children who have proven they cannot handle finances would be a waste, but that's easy to say at this point, it would be hard to implement that in real life...
I love that idea, mainly because gifting it earlier makes them less independent (see: discussion in The Millionaire Next Door book), but your idea does not.
Filed away for future reference.
I remember hearing that one of the multi-millionaires on Dragon's Den (Shark Tank - USA equivalent) has a trust setup that will payout every year to match the salaries of his children. That way he can be very generous, but still the motivation behind receiving the money is always derived from your own ability to work/earn.
I always thought I might do something like that if I were super rich...
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I don't actually expect to outlive either my parents or his. My mother died when I was 8, her mother died when she was 7, her mother's mother died when her mother was 2 and so on. I've researched my maternal line back 7 generations and each mother died before her daughter's 10th birthday. Now, the causes of death that I know of (only have that info going back 3 generations) were not anything genetic. My mother died in a car accident, my grandmother in a wheat harvest accident and my great-grandmother died from a suspected infection in the pre antibiotics days. So there isn't any family history that directly makes me more likely to die young, but I have simply never expected to live long enough to see my children into adulthood, let alone living long enough to bury my father.
My Mom died at 50. When I was 27, I had this misguided assumption that I would also die young. It was a crazy fallacy (hopefully), but it was something that I carried with me. When I turned 28, I realized how silly that was. I'm glad to hear that I'm not the only person who's just assumed they'd die young though.
... expect another response from me shortly, after I finish reading the rest of this thread...
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And I'm done reading the whole thread now.
My Mom died almost 5 years ago. She owned a business that we sold, but then had to deal with 7 years of unfiled and unpaid personal and business taxes. The estate took over 4 years to settle, and the only things she owned were the business, and 2 vehicles (no real estate). It was crazy difficult, and required three trips to probate court with the estate. We had to hire an estate lawyer, and a tax lawyer to deal with that mess.
I burned through $60,000 pretty quickly (a few cars, and the start-up costs for my business, our wedding, paying for the remainder of DH's and my school, a few vacations), despite being pretty financially-savy, and we are in a higher cost of living area, so our house is the most expensive thing we've bought. We only owe ~$65,000 on the house (less than 20% of the cost).
I'm not sure that my life is any better than it would have been, if my Mom was still here, and we'd not received a penny. She was TERRIBLE with money (as evidenced by her non-payment of any taxes in 7+ years before her death) and if she'd had access to the money, she'd likely have spent every penny herself. My life is different, that is for sure. We didn't have the best relationship (she was emotionally abusive) and it took me a good 3 years after her death, to process it all.
Anyhow, it sure 'set us up' as our housing costs for our family-sized 3 bedroom house, are just the same as they were for our 1 bedroom apartment, because of the cash we put down. I am grateful, while at the same time, still battle with the guilt of enjoying the freedom that her death brought (both monetarily, and emotionally). I miss her less and less, but often it is more intense than I expect it to be.
My Dad will be retiring sometime in the next few years, and I hope he lives until a ripe old age, free of mental and physical limitations. I haven't talked in detail with him about his finances, but I saw the other day that he's keeping 10 times what he should be, in cash, in his chequing account, and I gave him crap for it being there, and not being somewhere earning interest. He's old school though, and feels like he always needs access to enough to pay cash for something large (like think brand new car large) over a weekend. His GF is working on getting him to use online banking, and then we can get him an e-savings account that he can have the access to he likes, while also earning interest.
We paid off his house with the first estate disbursements, and he owes no one, any money. He has both of my Mom's vehicles, and he has such a large FU fund, that he often reminds his employer, who is really in charge in that relationship (go Dad!). He used to be the kind of person who never took more than 4 vacation days a year, and saved every penny for later. However, since my Mom's death, he has finally started spending money on things he wants, and he enjoys, like trips to Nascar stuff. He takes at least a month off work every year, and heads south.
I hope that he, and his money last the exact same time, but I suspect that he is frugal enough that his money will outlast him, and there will be something left for us. Hopefully that won't be for another 30+ years though. I don't think I can handle losing another parent yet.
As for the inlaws, it is a completely different story. My FIL will likely never be able to retire, but will somehow be financially independent. However, my MIL will likely need our financial support, and will probably wind up living with us in the future.
DH and I would like to be able to pay for schooling for our kids, should we be blessed with them, but we won't likely tell them. I grew up in a frugal household, where we bought things secondhand, and I worked for my activity money (paper routes and the like, starting when I was 8). I grew up knowing the value of a dollar, and we want our kids to be the same way.
I'm not sure that I really answered the question, but I didn't expect to inherit anything, until my Mom died suddenly almost 5 years ago, and I'm not expecting anything else, as my one set of grandparents are likely to leave the bulk of their (likely sizeable) estate to my uncles that run farms.
Money changes family dynamics, and not always for the better. I think my family is rather unscathed, but my inlaws definitely treat us differently than they used to.
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I remember hearing that one of the multi-millionaires on Dragon's Den (Shark Tank - USA equivalent) has a trust setup that will payout every year to match the salaries of his children. That way he can be very generous, but still the motivation behind receiving the money is always derived from your own ability to work/earn.
I always thought I might do something like that if I were super rich...
What I wouldn't like about that idea is that a high income consumer kid could simply up consumption and still be rewarded by that system. But it does give me an idea for a modification to my prior thought. I could match my children's yearly savings. Earning more would still be motivated, but only if they saved more, so there would be a large incentive to save as much as possible. And meeting with me every year to document the savings would provide me with a platform to encourage them and support/advise them in investment and other financial issues if they wish. They could always maintain privacy by turning down my help which I would also respect and encourage.
I'm sure I'll modify and play with this idea over time, but I think incentives matter a lot in behavior. I'd love to provide good incentives for my children that help them learn lessons that took me way too long.