Author Topic: Factoring inheritance  (Read 6396 times)

neonlight

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Factoring inheritance
« on: August 12, 2017, 02:32:49 AM »
It's probably a lame question to ask, maybe even not respectful of one's parents.

Do you guys actually factor in wealth that will be passed down to you? My parents mentioned that they have 2-3 property that they will give the kids us, is it disrespectful or unwise to factor this?
 
« Last Edit: August 12, 2017, 02:58:50 AM by neonlight »

MoseyingAlong

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Re: Factoring inheritance
« Reply #1 on: August 12, 2017, 02:43:05 AM »
I don't think it is disrepectful but I do think it is very unwise. There are just too many things that can happen to things outside your control..
Your parents could change their minds.
They could consume the assets for end-of-life care.
They could outlive you.
Their estate could be tied up for years.

I suggest only planning with assets that are yours.

deborah

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Re: Factoring inheritance
« Reply #2 on: August 12, 2017, 02:43:49 AM »
It is stupid.

One great grandfather had three children - of completely different ages. Although the oldest had always worked on the farm, when the old man died, everything was left to the youngest - he had got dad to change the will after he got dementia - it happens.

Secondly, parents can live quite a long time. They estimate that here (we have a longer life expectancy - about 4 years), if both your parents are still alive, one of them will live into their 90s. If you are not going to inherit until they both die, you will probably be in your 70s when you do.

Thirdly, as people are living longer, they are also more prone to long term ill health, which takes more money to support (they may need to be in a nursing home), and the inheritance can run out.

Fourthly, they can always change their mind and leave it to the lost dogs home.

GuitarStv

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Re: Factoring inheritance
« Reply #3 on: August 12, 2017, 02:50:44 AM »
I would never expect to get an inheritance.  If I do, cool - that's a nice bonus.

Snow

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Re: Factoring inheritance
« Reply #4 on: August 12, 2017, 02:57:04 AM »
Nope, absolutely not.

My family doesn't have a lot, and for those who do (one of my grandparents), I fully expect my mother to grab everything she can between her and her siblings, leaving nothing but probably the option to choose a trinket or two from their house, after the siblings have had their share. My other grandparent is not rich, but still young enough to live at least another 20 years. I had planned to be financially independent by that time.

As for my parents, I do expect them to live on for quite some time. I must admit, I find people who talk about what they'll do with the money "once they inherit" are rather off-putting. My mother is a bit of a spendypants and while my father wants to leave as much to his children as possible, I expect to run into issues with my siblings unless he leaves a pretty explicit will (not common here, less than 5% leave wills, and it's usually the wealthy bunch). I don't have the interest or the energy to faff around with that kind of drama, so I prefer to only factor in my own assets. Anything else would be a surprise and a bonus.

neonlight

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Re: Factoring inheritance
« Reply #5 on: August 12, 2017, 03:04:51 AM »
Nope, absolutely not.

My family doesn't have a lot, and for those who do (one of my grandparents), I fully expect my mother to grab everything she can between her and her siblings, leaving nothing but probably the option to choose a trinket or two from their house, after the siblings have had their share. My other grandparent is not rich, but still young enough to live at least another 20 years. I had planned to be financially independent by that time.

As for my parents, I do expect them to live on for quite some time. I must admit, I find people who talk about what they'll do with the money "once they inherit" are rather off-putting. My mother is a bit of a spendypants and while my father wants to leave as much to his children as possible, I expect to run into issues with my siblings unless he leaves a pretty explicit will (not common here, less than 5% leave wills, and it's usually the wealthy bunch). I don't have the interest or the energy to faff around with that kind of drama, so I prefer to only factor in my own assets. Anything else would be a surprise and a bonus.

Nope, absolutely not.

My family doesn't have a lot, and for those who do (one of my grandparents), I fully expect my mother to grab everything she can between her and her siblings, leaving nothing but probably the option to choose a trinket or two from their house, after the siblings have had their share. My other grandparent is not rich, but still young enough to live at least another 20 years. I had planned to be financially independent by that time.

As for my parents, I do expect them to live on for quite some time. I must admit, I find people who talk about what they'll do with the money "once they inherit" are rather off-putting. My mother is a bit of a spendypants and while my father wants to leave as much to his children as possible, I expect to run into issues with my siblings unless he leaves a pretty explicit will (not common here, less than 5% leave wills, and it's usually the wealthy bunch). I don't have the interest or the energy to faff around with that kind of drama, so I prefer to only factor in my own assets. Anything else would be a surprise and a bonus.

I can never imagine squabbling over inheritance, maybe because dad doesn't have a business empire spawning billions and we are just kids,  sister and me. Maybe because I am still young, things might get complicated when people have their own family and priority changes, I just don't get it (yet).

neonlight

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Re: Factoring inheritance
« Reply #6 on: August 12, 2017, 03:05:55 AM »
I don't think it is disrepectful but I do think it is very unwise. There are just too many things that can happen to things outside your control..
Your parents could change their minds.
They could consume the assets for end-of-life care.
They could outlive you.
Their estate could be tied up for years.

I suggest only planning with assets that are yours.

Thanks, it's an objective answer. Appreciate :)

neonlight

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Re: Factoring inheritance
« Reply #7 on: August 12, 2017, 03:10:43 AM »
It is stupid.

One great grandfather had three children - of completely different ages. Although the oldest had always worked on the farm, when the old man died, everything was left to the youngest - he had got dad to change the will after he got dementia - it happens.

Secondly, parents can live quite a long time. They estimate that here (we have a longer life expectancy - about 4 years), if both your parents are still alive, one of them will live into their 90s. If you are not going to inherit until they both die, you will probably be in your 70s when you do.

Thirdly, as people are living longer, they are also more prone to long term ill health, which takes more money to support (they may need to be in a nursing home), and the inheritance can run out.

Fourthly, they can always change their mind and leave it to the lost dogs home.

Yes it's stupid.

They are my source of happiness, and it's stupid of me to even ask this.

Snow

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Re: Factoring inheritance
« Reply #8 on: August 12, 2017, 03:15:00 AM »
I can never imagine squabbling over inheritance, maybe because dad doesn't have a business empire spawning billions and we are just kids,  sister and me. Maybe because I am still young, things might get complicated when people have their own family and priority changes, I just don't get it (yet).

Haha, who said I was old? I just factor in some of my siblings irresponsible behaviour and do some extrapolation (from incomplete data) from there. I might get positively surprised, who knows? But by expecting there to be little or nothing left, I plan appropriately. My siblings always took after my mother, while I take after my father (especially with finances). We see things very differently, and I expect that will be an issue eventually. Plus, they might have caught on that I'm going to save lots by that time, and decide between themselves that I don't need an inheritance as much as they do. Stranger things have happened.

DrSweden

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Re: Factoring inheritance
« Reply #9 on: August 12, 2017, 03:16:38 AM »
Not at all. Of course if can be a nice bonus if you get something but nothing I factor in. They live their lives and I live mine.

neonlight

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Re: Factoring inheritance
« Reply #10 on: August 12, 2017, 03:17:33 AM »
I can never imagine squabbling over inheritance, maybe because dad doesn't have a business empire spawning billions and we are just kids,  sister and me. Maybe because I am still young, things might get complicated when people have their own family and priority changes, I just don't get it (yet).

Haha, who said I was old? I just factor in some of my siblings irresponsible behaviour and do some extrapolation (from incomplete data) from there. I might get positively surprised, who knows? But by expecting there to be little or nothing left, I plan appropriately. My siblings always took after my mother, while I take after my father (especially with finances). We see things very differently, and I expect that will be an issue eventually. Plus, they might have caught on that I'm going to save lots by that time, and decide between themselves that I don't need an inheritance as much as they do. Stranger things have happened.

Wasn't implying you are, just saying you are wise(r) :)

I wish you all the best

SpreadsheetMan

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Re: Factoring inheritance
« Reply #11 on: August 12, 2017, 03:37:04 AM »
I don't think it is disrepectful but I do think it is very unwise. There are just too many things that can happen to things outside your control..
Your parents could change their minds.
They could consume the assets for end-of-life care.
They could outlive you.
Their estate could be tied up for years.

I suggest only planning with assets that are yours.

No. My remaining 90+ year old parent's assets will cover about 3 years in a (UK) nursing home - this is what I expect to happen to the house+money.

Villanelle

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Re: Factoring inheritance
« Reply #12 on: August 12, 2017, 04:00:02 AM »
Meh.  We've discussed this here many times and I know I'm the outlier.

I don't firmly factor it in, but I'm definitely aware of it as a safety net or a step up in possible FIRE lifestyle, I guess.  It's hard to articulate.  It's not like a take a specific number and toss that in to the simulator as part of my stache.  But it's definitely something I'm aware of and file in a similar category to "we can go back to work if things get ugly" or "we can always cut out travel" I guess. 

My parents have been very clear about their finances, and very upfront about the numbers.  There is no reason to believe anything would change.  They have excellent health care coverage.  In their 70s, they still have positive cash flow.  And to be frank, there's a lot of money.  So even if something starts eating away at it significantly, there will still be, well, a lot.  Again, they've sat my sister and I down and explained very clearly what the plan is and roughly what the numbers look like.  There's no reason to believe that at some point in my life, I won't have a large influx of cash.  And my parents have literally said that they want my sister and I to be able to retire early and have an easier retirement.  I don't think it's disrespectful when it's clearly their wish.

The biggest wildcard is when it will come.  My parents are both extremely healthy.  I hope it's decades from now.  I hope to be long FIREd before I see a penny.  But I'm also aware the money is there and should be a huge supplement unless I die fairly early, in which case I won't have lost anything by factoring it in.

CheapScholar

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Re: Factoring inheritance
« Reply #13 on: August 12, 2017, 06:49:00 AM »
I don't rely on it, but I have to say I think about it from time to time.  Maybe that's because I'm an only child with parents divorced and neither of them remarried.  That makes my odds of inheritance relatively good (I don't have to share, and, most importantly, if one of them does die, the other doesn't get the estate, I do).

I hope my parents live as long as possible. If my mom passed suddenly, I'd probably get about 200K from her residence and assets.  Although, I suspect that bc she's been a lifelong smoker that she will exhaust everything in medical care.  My dad is worth about a million.  Seems to be in good health and I'm guessing he lives 20 more years.  I can FIRE on my own in 13, so guess it doesn't matter. 

neonlight

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Re: Factoring inheritance
« Reply #14 on: August 12, 2017, 06:49:47 AM »
Meh.  We've discussed this here many times and I know I'm the outlier.

I don't firmly factor it in, but I'm definitely aware of it as a safety net or a step up in possible FIRE lifestyle, I guess.  It's hard to articulate.  It's not like a take a specific number and toss that in to the simulator as part of my stache.  But it's definitely something I'm aware of and file in a similar category to "we can go back to work if things get ugly" or "we can always cut out travel" I guess. 

My parents have been very clear about their finances, and very upfront about the numbers.  There is no reason to believe anything would change.  They have excellent health care coverage.  In their 70s, they still have positive cash flow.  And to be frank, there's a lot of money.  So even if something starts eating away at it significantly, there will still be, well, a lot.  Again, they've sat my sister and I down and explained very clearly what the plan is and roughly what the numbers look like.  There's no reason to believe that at some point in my life, I won't have a large influx of cash.  And my parents have literally said that they want my sister and I to be able to retire early and have an easier retirement.  I don't think it's disrespectful when it's clearly their wish.

The biggest wildcard is when it will come.  My parents are both extremely healthy.  I hope it's decades from now.  I hope to be long FIREd before I see a penny.  But I'm also aware the money is there and should be a huge supplement unless I die fairly early, in which case I won't have lost anything by factoring it in.

Thanks, that's a very objective way of putting it.

My parents are not wealthy, they have hinted that they will leave us some things. I hope it's decades from now that I will know what it is that they are leaving behind exactly, nothing huge but it's something meant for me and sis.


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Re: Factoring inheritance
« Reply #15 on: August 12, 2017, 07:05:10 AM »
In short: no.  It's not your money until it is your money.

My sibling's precautionary tale:  My dad showed my sister the balance of his IRA about 20 years ago.  He implied she'd be getting a portion of it.  She assumed that meant 1/3 since there were 3 kids.  It was a pretty sizable amount and she just assumed she would be set for life when Dad died.  Things happened...
* The money was not managed well.  It wasn't awful, just high fees and low returns.
* Dad had to take significant RMDs for almost 15 of those years
* Mom had Alzheimer's and Dad spent what he needed to keep her as comfortable as possible.  She was in a nursing home and he hired a private caretaker to be with her when he wasn't there
* Sis was... well, she was a real bitch.  She was an alcoholic and pretty much was estranged from the entire family (including her kids).  At some point, Dad took her 1/3 and divided it equally between her and her children in the will -- knowing that if she inherited it all, it would never bubble down to her children.

When Dad died... she did receive a chunk of money...  but it was probably about 20% of the amount she THOUGHT she was getting. 
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dreams_and_discoveries

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Re: Factoring inheritance
« Reply #16 on: August 12, 2017, 10:29:33 AM »
You know, I'm getting more and more anti inheritance lately,  I see it perpetuating inequality and hindering social mobility.

I'd rather my parents spent every last penny, and got themselves good quality help and care and took lots of holidays.


kayvent

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Re: Factoring inheritance
« Reply #17 on: August 12, 2017, 10:45:41 AM »
I think it can be dangerous to presume the inheritance. Say their investments go well, they die during a bull market, they die young without any bouts of ill health, and there is not disputes, maybe the parents think that a child has been so wonderful with money that they don't need more.

Some people, a lot in fact, have the belief that those who are good at something don't need more of it. In other words, the children who are poor with money may receive an outsized inheritance.

Plugging Along

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Re: Factoring inheritance
« Reply #18 on: August 12, 2017, 01:27:26 PM »
My parents and siblings have talked about our inheritances since I was young, it's not a huge amount, but it's not small either.   We have managed their properties, investments, taxes, etc because english  is their not their first language.   

We are constantly telling our parents to spend more, but they don't want to spend our inheritances.   They want to leave something for us, but ironically NON of us want it.   We have told them this, we are all fortunate enough that we are worth many times more then they are.  Since they won't spend their money, we just gift them a lot of things that we know they wanted to do such as trips, large purchases, vehicles, etc. They feel good that their kids take care of them this way, and we just spend on what they are too frugal too, but want too. 

In terms of how we have planned for it,  my older siblings are FI many time over, and we aren't far off.  We don't consider the inheritance, and keep encouraging them to sell the properties and spend it.  We have decided that any onheritance we receive will go to our children.   We don't need the money to make it, and i think our parents would like to see it help the future generations.   We don't factor it in our planning, my great aunt just passed away at 106.  If my my parents live that long I will be over 80,  my kids in their 50, I would then pass it on to my grandkids. 

Though I always knew I had an inherientance coming, I never wanted to rely on, and plan for it only for my future generations. 

TartanTallulah

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Re: Factoring inheritance
« Reply #19 on: August 12, 2017, 01:42:00 PM »
I've observed a couple of cautionary tales at close hand. Both involved men who expected inheritances from their wife's parents to solve their financial problems. One died in his early seventies deep in humiliating debt and never saw his mother-in-law's money because she outlived him by a short time. The other didn't bother making pension arrangements because he assumed an inheritance from his wife's wealthy parent would provide for his retirement; he was surprised when he found himself divorced in his early forties.

I'm not planning on any inheritance. My parents had me when they were quite young. They're comfortably off in a Mustachian-without-knowing-it sort of way and are in good health and could easily live another 15 years, by which time I'll be at state retirement pension age and my children will be old enough to be trusted to inherit in their own right. I got nothing when my grandparents passed on, and I could end up being a skipped generation as far as inheritance goes. It's also possible that all they have will be spent on care when they're in their nineties. My husband's father is getting frail but he could tick over for a few more years and I doubt that he'll have much to leave.

My mother did try to jerk my strings for a while by making veiled threats about withholding "inheritance" at a time when I was living paycheck to paycheck and not following the script she had in mind for me. Most unendearing behaviour. I told her to stop being ghoulish.



Dicey

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Re: Factoring inheritance
« Reply #20 on: August 12, 2017, 02:01:13 PM »
NoPeter. (Funny auto correct for "Nope", so stet.)

MIL lives with us and has ALZ. She has over $2MM + LTC policy + small pension. She's generally healthy as a horse, strong as an ox, and could easily live another decade or more.

We're just hoping she never runs out of money; we're not counting on any inheritance. Also, I think it's super sad that she has this pile 'o money and can't enjoy it. Lots of lessons here.
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Villanelle

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Re: Factoring inheritance
« Reply #21 on: August 12, 2017, 11:52:44 PM »
I think it can be dangerous to presume the inheritance. Say their investments go well, they die during a bull market, they die young without any bouts of ill health, and there is not disputes, maybe the parents think that a child has been so wonderful with money that they don't need more.

Some people, a lot in fact, have the belief that those who are good at something don't need more of it. In other words, the children who are poor with money may receive an outsized inheritance.

I don't understand why the assumption seems to be that everyone is just guessing.  Sure, presuming there is an inheritance is foolhardy.  But does no one else's family talk about these things?  Maybe my parents are the exception.  They have always lived a pretty darn mustachian existence, so admittedly they're are not the norm financially. And maybe laying it all out in very clear terms is just an extentson of that. But I'm not presuming much of anything.  They've sat my sibling and me down and told us that we are both set to inherit everything they have, split 50/50, and have outlined what that means.  Not only did we discuss those terms, we know who the executor is, where the safe deposit box is (mom actually drove me by the bank because she wanted to make absolutely sure I knew!) and more. 

I wish my parents would spend more, but only kind of so.  When I think about that statement, it's true, except I don't really wish that any more than I wish MMM would spend more.  They are very happy, very comfortable, and have many things that make their life easier, but they aren't wasteful.  (Isn't that what this site is more or less about, and therefore what we should want for everyone, including our parents, matter of inheritance aside?)  They still do much of their own yardwork, but have a gardener to cut back on the demands on their 70+ year old bodies.  They eat very well, but almost entirely made from scratch.  They have hobbies on which they don't really put limits, but those hobbies are things like tennis, bridge, beer making, and beading, none of which are especially spendy.  It's absolutely the dream, so why would I wish they spent more when that goes against both their values, and mine (and the values of this site)?   And they have loosened up a small bit.  (They are leaving today for a week in the Dominican Republic, and I'm thrilled.)  But in the end, they are mustachians.  Telling them to spend an extra million or two would be ridiculous, as they are no more likely to do that than most of the more devoted members of this site.  They are perfectly content at their current level of spending and feel no real want.  If MMM got an extra $1mm tomorrow, would he suddenly spend significantly more?  I doubt it, as it's just not part of who he is and his spending levels are about his values, not the limits of his 4%.  My parents are the same way.  The could double their annual spending and never run out of their money.  They don't not because of the money, but because they don't need or want to.  Any disagreement I have with "I wish they would spend more" certainly isn't due to "... because I want to get my hands on it someday".   I wish they would spend as much as they need to be happy and comfortable.  And they are certainly doing that, for which I am thrilled and grateful.

Last I visited, I convinced mom to buy a gorgeous outfit we spotted at the store.  It was not on sale, and she almost never buys not-on-sale, especially when it is not something she needs.  But I ooohed and aaaahed and told her how lovely it looked (and it did) and she took it home.   And then returned it a week later.  She just couldn't.  And that had nothing to do with the $100 not being available for her children to inherit.  It just didn't sit well with her, based on her values. 

I am exceptionally lucky, in more ways than I could ever say, to have the parents I do.  They've pretty much got life figured out and are killing it by nearly every metric I can think of that matters.  That their awesomeness and decades of badassity will result in a pile of money I don't need isn't even a scribble in the margin of that list.  And thanks to them and the things they've taught me and modeled for me, when I'm 70, I probably won't buy the red jumpsuit either.

Dicey

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Re: Factoring inheritance
« Reply #22 on: August 13, 2017, 01:52:26 AM »
I think it can be dangerous to presume the inheritance. Say their investments go well, they die during a bull market, they die young without any bouts of ill health, and there is not disputes, maybe the parents think that a child has been so wonderful with money that they don't need more.

Some people, a lot in fact, have the belief that those who are good at something don't need more of it. In other words, the children who are poor with money may receive an outsized inheritance.

I don't understand why the assumption seems to be that everyone is just guessing.  Sure, presuming there is an inheritance is foolhardy.  But does no one else's family talk about these things?  Maybe my parents are the exception.  They have always lived a pretty darn mustachian existence, so admittedly they're are not the norm financially. And maybe laying it all out in very clear terms is just an extentson of that. But I'm not presuming much of anything.  They've sat my sibling and me down and told us that we are both set to inherit everything they have, split 50/50, and have outlined what that means.  Not only did we discuss those terms, we know who the executor is, where the safe deposit box is (mom actually drove me by the bank because she wanted to make absolutely sure I knew!) and more. 

I wish my parents would spend more, but only kind of so.  When I think about that statement, it's true, except I don't really wish that any more than I wish MMM would spend more.  They are very happy, very comfortable, and have many things that make their life easier, but they aren't wasteful.  (Isn't that what this site is more or less about, and therefore what we should want for everyone, including our parents, matter of inheritance aside?)  They still do much of their own yardwork, but have a gardener to cut back on the demands on their 70+ year old bodies.  They eat very well, but almost entirely made from scratch.  They have hobbies on which they don't really put limits, but those hobbies are things like tennis, bridge, beer making, and beading, none of which are especially spendy.  It's absolutely the dream, so why would I wish they spent more when that goes against both their values, and mine (and the values of this site)?   And they have loosened up a small bit.  (They are leaving today for a week in the Dominican Republic, and I'm thrilled.)  But in the end, they are mustachians.  Telling them to spend an extra million or two would be ridiculous, as they are no more likely to do that than most of the more devoted members of this site.  They are perfectly content at their current level of spending and feel no real want.  If MMM got an extra $1mm tomorrow, would he suddenly spend significantly more?  I doubt it, as it's just not part of who he is and his spending levels are about his values, not the limits of his 4%.  My parents are the same way.  The could double their annual spending and never run out of their money.  They don't not because of the money, but because they don't need or want to.  Any disagreement I have with "I wish they would spend more" certainly isn't due to "... because I want to get my hands on it someday".   I wish they would spend as much as they need to be happy and comfortable.  And they are certainly doing that, for which I am thrilled and grateful.

Last I visited, I convinced mom to buy a gorgeous outfit we spotted at the store.  It was not on sale, and she almost never buys not-on-sale, especially when it is not something she needs.  But I ooohed and aaaahed and told her how lovely it looked (and it did) and she took it home.   And then returned it a week later.  She just couldn't.  And that had nothing to do with the $100 not being available for her children to inherit.  It just didn't sit well with her, based on her values. 

I am exceptionally lucky, in more ways than I could ever say, to have the parents I do.  They've pretty much got life figured out and are killing it by nearly every metric I can think of that matters.  That their awesomeness and decades of badassity will result in a pile of money I don't need isn't even a scribble in the margin of that list.  And thanks to them and the things they've taught me and modeled for me, when I'm 70, I probably won't buy the red jumpsuit either.
Villanelle, this is beautifully written. It sounds like you have terrific parents and I suspect they, in turn, are very proud of you.

However, you seem to have completely ignored that one or both of them could develop a catastrophic illness in their old age. Since Alzheimer's is one I'm intimately familiar with, I'll use that as the most obvious example. Since the cause is unknown, but has been established to not be exclusively genetic, it could happen, even without a family history. Sadly, it's so damn common that we are not talking about unicorns here, it's a real possibility.

Such an illness could prove disastrous in many ways, such as 1. Actual cost of healthcare, 2. Poor decisions made due to declining mental and/or physical health, 3. Undue financial influence by a seemingly neutral but actually self-interested party, such as a caretaker.

This shit happens every single day. To presume that your parents have their stuff so completely together that they are bulletproof is risky, IMO. Your implied criticism of everyone else who commented on this thread just doesn't feel right or fair.

Here's a personal anecdote about my parent's estate. Mom, who was the MoneyBoss of their household, asked each of their six offspring to write their name on the back of anything in the house they especially wanted. That way, if there was anything that more than one person wanted, it could be sorted out in advance. Happily, that situation never came up, but here's what did. My spendthrift sister crawled under their very late-model, paid-for car and wrote her name on the chassis. Everyone, including my parents, knew about that and treated it as a joke. Ha Ha Ha, she's so funny.

In brief, their stated wish was for the surviving spouse to get everything and after that spouse's death, everything was to be rolled into their trust and divided into six equal shares. My mother specifically omitted the grand kids, believing that the parents could pass on whatever they wished to their kids. Since some of their children did not have offspring, they felt that was the most equitable decision.

Imagine my surprise when, in settling the estate, my other sibs decided that since spendthrift sister had written her name on the car, it was hers on top of her 1/6th share! Yes, this is the sister who was on parental life support most of her adult life and had embezzled the cash equivalent of the value of the car in the year prior to my mother's death. What the FUCK? Now my brother and I are co-trustees and co-executors. I should have been able to veto this decision, right?  My dilemma is that my parents have left this world, but my siblings are very much present. I caved, but I am still not happy about it. Worse, my spendthrift sister now knows that I alone opposed this creative interpretation of the will and trust documents. Ugh.

At one point, my parents had allotted this sister a smaller inheritance, because of all the help they'd given her. About a year before Mom died, with great effort, they visited their attorney and changed the will back to equal shares for everyone. They never knew about the embezzlement. Ironically, it was happening at about the same time, but hadn't been discovered yet.

I could go on and on, but I hope I've shared enough to illustrate that even if you think everything is perfectly sorted out, things can go sideways. I still hold that it's best to assume nothing, even if your crystal ball is in perfect order and you know exactly what the future holds.

BTW, my brother and I always received copies of their will and trust documents, both the originals and the updates. Mom always handled their finances. She and I discussed them at length a number of times. One of our regular conversations went like this:

Mom: We'd really like to leave something for each of you children after we die.

Me: That's very nice mom, but when you divide it by six... We're all fine. We'll be fine. Why don't you spend it on yourselves instead?

Mom: Hrumph

------------------------------

And the red jumpsuit story? If that was my story and my mom and she looked so great in it, I'd like to imagine that I would have gone back to that store, bought it for her at any price, with my own hard-earned money, and saved it for her next birthday or other gift-giving occasion. If pressed, I might have even let her think that I'd gotten it on sale after she returned it. Then I would have insisted she try it on and taken a picture of her in her lovely red outfit. The smile on her face would have been something to cherish forever.
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Villanelle

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Re: Factoring inheritance
« Reply #23 on: August 13, 2017, 03:20:20 AM »
Mom would be mortified if I bought that red jumpsuit for her.  i've been stalking it on the department store website, and should it go on sale, I will buy it, but I'll need to make certain she knows it was on sale, or she would be very upset.  I would never lie to her about that, as that would feel wrong as well. 

Also, I'm not sure what "implied criticism" you are talking about. I was responding to the "implied criticism" for those who do factor in an inheritance.   I was responding to those who made blanket decisions about it being wrong or bad.  I was showing an example of where it isn't.  So no, there was no implied criticism, other than perhaps criticism of those who seem to see this is a bnary question that is either always right, or always wrong.  If I had a greedy brother or my parents' finances were what they are or I was assuming I'd get half, or any number of other factors, it would be unwise.  I readily admit that it is often unwise to assume an inheritance is coming (and what amount that might be). Others seem incapable of admit that sometimes it isn't foolish.

My larger point I guess it that situations matter.  Nuance matters.  My family is hyper functional.  I would bet every last penny I have that my one sibling won't dispute the will or try anything shady.  We might argue over mom's wedding album or the statue of their favorite dog.  If my parents need a caretaker, that would almost certainly either be me, or someone I hire (for the day-to-day) and oversee--something I have plenty of time and energy to do on a fairly involved level. I'm an "retired" overseas dweller and could move to them if necessary or move them to me when I am back in the US.  As I've explained, I know the details of the will.  My parents have mentioned many times how proud they are to leave us meaningful amounts of money.  There is essentially zero chance of that changing, and due to the way care-giving would go down, there's very little chance of some weird, undue influence from a greed outsider.  I don't have a spendthrift sister.  There are no grandkids or other close relatives.  And there's a lot of money.  I'm not comfortable getting specific because they aren't my details to share, but there's more than enough to cover a lot of care.  They also have very good healthcare.  And two separate pensions for life (either of their lives).  All these details matter when deciding if *for me* it is unwise to assume that money is coming someday.

So *in my situation* I think it makes perfect sense to have an awareness of that inheritance.  I'm not the one who has made blanket statements about how it's foolish to count on an inheritance and shouldn't be done, and that's what I was responding to.  It most certainly is not foolish.  It is *sometimes* foolish.  And, IMO, it is sometimes not.   

Dicey

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Re: Factoring inheritance
« Reply #24 on: August 13, 2017, 04:01:17 AM »
^^I think all I'm going to say in response is that I'm sincerely glad for you that everything is so well figured out. I wish you all the best.^^
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Laura33

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Re: Factoring inheritance
« Reply #25 on: August 13, 2017, 08:23:36 AM »
Short version is that I factor in these things as they become more certain.

When DH and I first married, we completely ignored Social Security, pension, and inheritance in our retirement plans, even though it was fairly likely that at least 2 of 3 would still be there @30-40 years later [note that this was pre-MMM days, so we assumed 65].

Now that we are less than ten years out, we have a little more certainty on these things, and so we are starting to factor them in.  In our case, that means assuming probably about 75% likelihood of pension (DH's company is very unlikely to go under), about half of SS estimates (since we assume it will get cut at least somewhat by the time we get there), and inheritance more as "old age insurance" -- it is likely that both of us will get a significant chunk of money (his parents and my mom), but it is unlikely that either of us will inherit by our planned RE date (and we seriously hope we don't!).

I know exactly what the estate plans are on both sides (both our parents practically throw that at us), and I have zero concerns about spendthrift siblings or the like.  But I am not going to count chickens until I know that major long-term care requirements don't use up all the money.  My stepdad had Parkinson's; had he not died unexpectedly, his care would have cost 6 figures a year for many years, and he did not have LTC insurance.  What happens if something similar happens to my mom?  My stepdad's mom had alzheimer's for more than a decade before she died -- that can bleed an estate dry.

Or to be less theoretical:  My MIL has been fighting cancer for 4 years.  Over the past four years, I would not be at all surprised to find that they've spend over $100K on her treatment and travel and such (they flew up by us to get treatment the top specialist in her field and fly back frequently for checks, updates, etc.).  They are also working through their bucket list and traveling as much as her energy will allow.  But more to the point:  she is now on an experimental drug that, unless they can get Medicare to cover it, runs $20K/mo. (yes, $20K -- that 0 is not a typo).  And we hope she is on it for a long, long time -- it is a "manage the disease" drug, not a "cure" drug.  So assume she lives another 2-3 years, you could easily see her last 5 years costing them close to $1M.  And then my FIL would still be barely 80 and presumably have another unknown chunk of years ahead of him, with possibly his own longer-term health problems. 

So, sure, it's close enough that we'll likely get something.  But it's also likely that we won't get it until at least 10 years after our FIRE date, and the amount that we get could wind up significantly less than what our parents currently have.  So I count it as a nice "extra" that might ease some concerns about our own long-term care needs, and/or cover some grandkid stuff (e.g. grad school).
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wenchsenior

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Re: Factoring inheritance
« Reply #26 on: August 13, 2017, 08:59:10 AM »
I think it's good to have awareness of your parents' overall financial situation, especially if you will end up being involved in final disposition of wealth/property or if you will be involved in their care as they age.


That is quite different from anticipating an inheritance, which I think is quite foolish.  The OP is not expecting disputes over inheritance, but many threads on this board detail families being blindsided by inheritance fights and surprising inequities or poor planning on the part of the recipients or givers.

But the main reason is that end of life care or other unexpected life events can quickly consume vast amounts of resources.

Not to go into great detail, but my father is still living independently and has not even begun a decline yet.  However, 5 years ago, he and his wife were worth almost 2.5 million, and today he (solo) is worth about 700K.  He does not have long term care insurance, and his end of life costs have not even started yet.  So there might be a little left over at the end of his life, but there very well might be next to nothing.

Plan for your financial security as if the inheritance didn't exist.  If you get something, it's like a great topping on the sundae.

wenchsenior

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Re: Factoring inheritance
« Reply #27 on: August 13, 2017, 09:05:55 AM »
Short version is that I factor in these things as they become more certain.



Or to be less theoretical:  My MIL has been fighting cancer for 4 years.  Over the past four years, I would not be at all surprised to find that they've spend over $100K on her treatment and travel and such (they flew up by us to get treatment the top specialist in her field and fly back frequently for checks, updates, etc.).  They are also working through their bucket list and traveling as much as her energy will allow.  But more to the point:  she is now on an experimental drug that, unless they can get Medicare to cover it, runs $20K/mo. (yes, $20K -- that 0 is not a typo).  And we hope she is on it for a long, long time -- it is a "manage the disease" drug, not a "cure" drug.  So assume she lives another 2-3 years, you could easily see her last 5 years costing them close to $1M.  And then my FIL would still be barely 80 and presumably have another unknown chunk of years ahead of him, with possibly his own longer-term health problems. 



We've got a close friend who was just prescribed either this same drug or a close relative, for a non cancer, lifelong illness.  So far, his insurance is refusing to cover.  It costs triple his gross income.  Cost of these drugs is absolutely horrific.

ltt

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Re: Factoring inheritance
« Reply #28 on: August 13, 2017, 09:17:31 AM »
I would not factor it in--just don't know what will happen in future.

bigchrisb

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Re: Factoring inheritance
« Reply #29 on: August 13, 2017, 10:52:07 PM »
Both my wife and I are likely to inherit at some stage (each in the $500k-$1m range).  However, we certainly don't count on it.  We view that if this occurs, then we are really just custodians of the money for future generations, and don't really view it as "ours".

That said, we do count on our parents as a form of safety net.  We have never needed it, but know that if we were in the position that we couldn't pay for medical costs / basic food / basic shelter that our parents would provide some assistance.  We plan to never put them in that position, and plan to be able to offer the same safety net to our own children one day.

Long story short, don't bank on an inheritance.  You have no idea when or if it will happen.  I've also seen an inheritance mentality ruin the motivation and drive in others. 


GuitarStv

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Re: Factoring inheritance
« Reply #30 on: August 14, 2017, 07:07:16 AM »
You know, I'm getting more and more anti inheritance lately,  I see it perpetuating inequality and hindering social mobility.

Not surprising you feel this way.  The sole purpose of inheritance is (and always has been) to give a child an unearned advantage over others.

Cwadda

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Re: Factoring inheritance
« Reply #31 on: August 14, 2017, 07:36:36 AM »
I think it can be dangerous to presume the inheritance. Say their investments go well, they die during a bull market, they die young without any bouts of ill health, and there is not disputes, maybe the parents think that a child has been so wonderful with money that they don't need more.

Some people, a lot in fact, have the belief that those who are good at something don't need more of it. In other words, the children who are poor with money may receive an outsized inheritance.

I don't understand why the assumption seems to be that everyone is just guessing.  Sure, presuming there is an inheritance is foolhardy.  But does no one else's family talk about these things?  Maybe my parents are the exception.  They have always lived a pretty darn mustachian existence, so admittedly they're are not the norm financially. And maybe laying it all out in very clear terms is just an extentson of that. But I'm not presuming much of anything.  They've sat my sibling and me down and told us that we are both set to inherit everything they have, split 50/50, and have outlined what that means.  Not only did we discuss those terms, we know who the executor is, where the safe deposit box is (mom actually drove me by the bank because she wanted to make absolutely sure I knew!) and more. 

I wish my parents would spend more, but only kind of so.  When I think about that statement, it's true, except I don't really wish that any more than I wish MMM would spend more.  They are very happy, very comfortable, and have many things that make their life easier, but they aren't wasteful.  (Isn't that what this site is more or less about, and therefore what we should want for everyone, including our parents, matter of inheritance aside?)  They still do much of their own yardwork, but have a gardener to cut back on the demands on their 70+ year old bodies.  They eat very well, but almost entirely made from scratch.  They have hobbies on which they don't really put limits, but those hobbies are things like tennis, bridge, beer making, and beading, none of which are especially spendy.  It's absolutely the dream, so why would I wish they spent more when that goes against both their values, and mine (and the values of this site)?   And they have loosened up a small bit.  (They are leaving today for a week in the Dominican Republic, and I'm thrilled.)  But in the end, they are mustachians.  Telling them to spend an extra million or two would be ridiculous, as they are no more likely to do that than most of the more devoted members of this site.  They are perfectly content at their current level of spending and feel no real want.  If MMM got an extra $1mm tomorrow, would he suddenly spend significantly more?  I doubt it, as it's just not part of who he is and his spending levels are about his values, not the limits of his 4%.  My parents are the same way.  The could double their annual spending and never run out of their money.  They don't not because of the money, but because they don't need or want to.  Any disagreement I have with "I wish they would spend more" certainly isn't due to "... because I want to get my hands on it someday".   I wish they would spend as much as they need to be happy and comfortable.  And they are certainly doing that, for which I am thrilled and grateful.

Last I visited, I convinced mom to buy a gorgeous outfit we spotted at the store.  It was not on sale, and she almost never buys not-on-sale, especially when it is not something she needs.  But I ooohed and aaaahed and told her how lovely it looked (and it did) and she took it home.   And then returned it a week later.  She just couldn't.  And that had nothing to do with the $100 not being available for her children to inherit.  It just didn't sit well with her, based on her values. 

I am exceptionally lucky, in more ways than I could ever say, to have the parents I do.  They've pretty much got life figured out and are killing it by nearly every metric I can think of that matters.  That their awesomeness and decades of badassity will result in a pile of money I don't need isn't even a scribble in the margin of that list.  And thanks to them and the things they've taught me and modeled for me, when I'm 70, I probably won't buy the red jumpsuit either.

Agreed, this is beautifully written. This is my parents to a T.

My family has always been completely open to talking about money. It's never been that "weird" subject (just amongst ourselves, of course). My parents and I 100% know about each other's financial details. We help each other on our rental properties, investment decision-making, and leading a more Mustachian life all the way around. I'm the executor of their will. They will leave a sizable inheritance, though I anticipate FIREing well before that.

zinnie

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Re: Factoring inheritance
« Reply #32 on: August 14, 2017, 07:53:09 AM »
I do, because it is the most likely outcome. I just think of it like my SWR has to last 30-40 years instead of 60-80. I know that my dad's accounts will TOD to me and my brother when he dies. I also know that my mom plans to donate the majority of hers (they are no longer married). We've talked about this in detail, though, it isn't some kind of vague concept.

I feel like part of the reason this is often a forbidden subject is because it covers two areas we don't like talking about--money and death. Both of which, in my opinion, society would be better served by being more open about. People would be more educated about money if families talked about it more, and talking about assets and planning for unused assets could encourage donation.

I wish my dad didn't ever have to die, but he is going to. It's part of his life plan to pass his assets down to his kids. My mom prefers to donate to causes she finds worthy (they are no longer married). Both are the right choices for them. On this board we are in a group of people that are planning out huge portions of their lives based on what is most likely to happen in the markets over long periods of time. Why shouldn't we plan based on the likelihood of this one factor as well? All of the reasons to ignore inheritance seem to center around not knowing details (a good reason not to plan around something) or uncertainty about there being an inheritance (another good reason not to plan around something). But when an inheritance is very likely, it seems logical to include in long-term planning. 

iris lily

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Re: Factoring inheritance
« Reply #33 on: August 14, 2017, 10:00:02 AM »
Nope, absolutely not.

My family doesn't have a lot, and for those who do (one of my grandparents), I fully expect my mother to grab everything she can between her and her siblings, leaving nothing but probably the option to choose a trinket or two from their house, after the siblings have had their share. My other grandparent is not rich, but still young enough to live at least another 20 years. I had planned to be financially independent by that time.

As for my parents, I do expect them to live on for quite some time. I must admit, I find people who talk about what they'll do with the money "once they inherit" are rather off-putting. My mother is a bit of a spendypants and while my father wants to leave as much to his children as possible, I expect to run into issues with my siblings unless he leaves a pretty explicit will (not common here, less than 5% leave wills, and it's usually the wealthy bunch). I don't have the interest or the energy to faff around with that kind of drama, so I prefer to only factor in my own assets. Anything else would be a surprise and a bonus.

Nope, absolutely not.

My family doesn't have a lot, and for those who do (one of my grandparents), I fully expect my mother to grab everything she can between her and her siblings, leaving nothing but probably the option to choose a trinket or two from their house, after the siblings have had their share. My other grandparent is not rich, but still young enough to live at least another 20 years. I had planned to be financially independent by that time.

As for my parents, I do expect them to live on for quite some time. I must admit, I find people who talk about what they'll do with the money "once they inherit" are rather off-putting. My mother is a bit of a spendypants and while my father wants to leave as much to his children as possible, I expect to run into issues with my siblings unless he leaves a pretty explicit will (not common here, less than 5% leave wills, and it's usually the wealthy bunch). I don't have the interest or the energy to faff around with that kind of drama, so I prefer to only factor in my own assets. Anything else would be a surprise and a bonus.

I can never imagine squabbling over inheritance, maybe because dad doesn't have a business empire spawning billions and we are just kids,  sister and me. Maybe because I am still young, things might get complicated when people have their own family and priority changes, I just don't get it (yet).

That is why squabbling will most likely occur. The smaller the pot, the harsher the squabble.

But maybe not.

iris lily

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Re: Factoring inheritance
« Reply #34 on: August 14, 2017, 10:10:53 AM »
My parents  and DH's parents also talked about money and death. Now, 3 of our 4 parents are dead. There were no sirprises, no squabbling, no black sheep sibling who fccked it all up.

My mother always told us "we are giving you an education, that is your inheritence, dont count on anything else" and that was fine, it set up reasonable expectations. And when she  died she did in fact leave a nice little sum each for me and my brother,  but not a life changing amount.

DH's father is elderly and failing. I have lived through asset-eating long term end of life care options and know about them,  he will not spend out his assets, he has way too much $ and he is not all that healthy.so, he will leave an estate divided among 5 siblings and everyone knows what will happen.

boarder42

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Re: Factoring inheritance
« Reply #35 on: August 14, 2017, 10:37:01 AM »
My parents are currently transferring wealth annually.  my brother and i each get 10k a year.  in 2 years that will likley be 15k a year.  and my parents will still leave us more when they pass.  my wife's family is likely going to leave us a fat pile of cash too.  all in all we'll over save i think but i dont want to count on their money.  but it does help accelerate our path the way my parents are doing it.

I dont even account for them continuing that money once FIREd so we'll have piles too much i'm sure.
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Gondolin

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Re: Factoring inheritance
« Reply #36 on: August 14, 2017, 10:41:01 AM »
If you assume your parents will die penniless, you'll never be disappointed.
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Acastus

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Re: Factoring inheritance
« Reply #37 on: August 14, 2017, 11:15:40 AM »
It is not wise to count on an inheritance. It is much safer to make your own plans, then if you get something, it is a bonus. Other people's money is just that, money for them to spend. Too many things can happen between now and then. Unforeseen  expenses, a falling out in the family, or someone else with a larger need could all happen.

Blonde Lawyer

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Re: Factoring inheritance
« Reply #38 on: August 14, 2017, 11:24:50 AM »
Both my wife and I are likely to inherit at some stage (each in the $500k-$1m range).  However, we certainly don't count on it.  We view that if this occurs, then we are really just custodians of the money for future generations, and don't really view it as "ours".

That said, we do count on our parents as a form of safety net.  We have never needed it, but know that if we were in the position that we couldn't pay for medical costs / basic food / basic shelter that our parents would provide some assistance.  We plan to never put them in that position, and plan to be able to offer the same safety net to our own children one day.

Long story short, don't bank on an inheritance.  You have no idea when or if it will happen.  I've also seen an inheritance mentality ruin the motivation and drive in others.

We also mentally have my in-laws as a safety net in the back of our mind.  It allows me to be more comfortable investing more and having the savings account trimmer.  We have a super worst case scenario fall back plan that gives me a lot of piece of mind.  We've never had to use it and hope to never use it.

I suspect my parents view me and my husband the same way.  They have a lot less money and we might be their emergency plan B and that is okay with me.

historienne

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Re: Factoring inheritance
« Reply #39 on: August 14, 2017, 02:40:30 PM »
Meh.  We've discussed this here many times and I know I'm the outlier.

I don't firmly factor it in, but I'm definitely aware of it as a safety net or a step up in possible FIRE lifestyle, I guess.  It's hard to articulate.  It's not like a take a specific number and toss that in to the simulator as part of my stache.  But it's definitely something I'm aware of and file in a similar category to "we can go back to work if things get ugly" or "we can always cut out travel" I guess. 

My parents have been very clear about their finances, and very upfront about the numbers.  There is no reason to believe anything would change.  They have excellent health care coverage.  In their 70s, they still have positive cash flow.  And to be frank, there's a lot of money.  So even if something starts eating away at it significantly, there will still be, well, a lot.  Again, they've sat my sister and I down and explained very clearly what the plan is and roughly what the numbers look like.  There's no reason to believe that at some point in my life, I won't have a large influx of cash.  And my parents have literally said that they want my sister and I to be able to retire early and have an easier retirement.  I don't think it's disrespectful when it's clearly their wish.

The biggest wildcard is when it will come.  My parents are both extremely healthy.  I hope it's decades from now.  I hope to be long FIREd before I see a penny.  But I'm also aware the money is there and should be a huge supplement unless I die fairly early, in which case I won't have lost anything by factoring it in.

This is basically my situation, except that I'm an only child, so it's all coming my way.  I do expect that end of life care will use up some of my parents' assets, but there will probably be a decent amount left.  However, if genetics are any guide, my parents will both live for another 15-20 years (and I certainly hope that they do!).  By that time, I'll be 50+ myself, so in practice I'm living my life as though the future inheritance doesn't exist.  The only difference is that we are probably undersaving for our kids' college funds; but we should be able to mostly cashflow college anyway, if we live frugally enough. 

We do consider my parents' money a safety net of sorts, though - we are currently spending down our emergency fund to do some work on our house.  This isn't extravagant spending - we bought a house knowing it needed work soon, and we are doing that work.  We're not spending down to zero, but going lower than I would normally be comfortable with.  We will rebuild it over time, which will be much easier in about a year, when our daycare expenses will drop dramatically.  In the interim, I know that we can borrow money from my parents if necessary.  Having this backstop enables us to save money in the long term (buying our house + renovating will be cheaper than buying an equivalent house that is already fixed up).  I appreciate that.

SimpleCycle

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Re: Factoring inheritance
« Reply #40 on: August 14, 2017, 02:55:15 PM »
We've watched a few inheritances go through Medicaid spend-down now, so while we're aware it could happen, we presume it is more likely it won't.  Neither set of parents has taken steps to protect their assets from end-of-life expenses, such as LTC insurance.

Cwadda

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Re: Factoring inheritance
« Reply #41 on: August 14, 2017, 03:16:16 PM »
My parents are currently transferring wealth annually.  my brother and i each get 10k a year.  in 2 years that will likley be 15k a year.  and my parents will still leave us more when they pass.  my wife's family is likely going to leave us a fat pile of cash too.  all in all we'll over save i think but i dont want to count on their money.  but it does help accelerate our path the way my parents are doing it.

I dont even account for them continuing that money once FIREd so we'll have piles too much i'm sure.

Are you using the extra $10k/year to pay down your mortgage early? :D

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Re: Factoring inheritance
« Reply #42 on: August 14, 2017, 03:31:58 PM »
My parents are currently transferring wealth annually.  my brother and i each get 10k a year.  in 2 years that will likley be 15k a year.  and my parents will still leave us more when they pass.  my wife's family is likely going to leave us a fat pile of cash too.  all in all we'll over save i think but i dont want to count on their money.  but it does help accelerate our path the way my parents are doing it.

I dont even account for them continuing that money once FIREd so we'll have piles too much i'm sure.

Are you using the extra $10k/year to pay down your mortgage early? :D

I'm not normally a big fan of trolling, but in this case, it was truly impeccably done. You have my admiration.
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Dicey

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Re: Factoring inheritance
« Reply #43 on: August 14, 2017, 03:40:10 PM »
My parents are currently transferring wealth annually.  my brother and i each get 10k a year.  in 2 years that will likley be 15k a year.  and my parents will still leave us more when they pass.  my wife's family is likely going to leave us a fat pile of cash too.  all in all we'll over save i think but i dont want to count on their money.  but it does help accelerate our path the way my parents are doing it.

I dont even account for them continuing that money once FIREd so we'll have piles too much i'm sure.

Are you using the extra $10k/year to pay down your mortgage early? :D

I'm not normally a big fan of trolling, but in this case, it was truly impeccably done. You have my admiration.
True, but you just know the answer is it gets added to their stash. Right? Right???
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boarder42

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Re: Factoring inheritance
« Reply #44 on: August 14, 2017, 03:44:18 PM »
My parents are currently transferring wealth annually.  my brother and i each get 10k a year.  in 2 years that will likley be 15k a year.  and my parents will still leave us more when they pass.  my wife's family is likely going to leave us a fat pile of cash too.  all in all we'll over save i think but i dont want to count on their money.  but it does help accelerate our path the way my parents are doing it.

I dont even account for them continuing that money once FIREd so we'll have piles too much i'm sure.

Are you using the extra $10k/year to pay down your mortgage early? :D

what mortgage

i paid all cash.  well gold actually i dont trust the us government or stocks so all my money is in gold bars.
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scottish

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Re: Factoring inheritance
« Reply #45 on: August 14, 2017, 04:27:44 PM »
Meh, if we get an inheritance we'll just add it to the pile.

It wouldn't change much at this point (we're in our early fifties).  I'd rather have my parents back as I remember them in their early seventies.

Goldielocks

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Re: Factoring inheritance
« Reply #46 on: August 14, 2017, 08:52:07 PM »
What the heck am I supposed to do with an inheritance that I receive after the age of 75?!?   

I can give it to my kids, or donate, or whatever, but I CAN'T use it to reduce my savings plan or life choices today (I am 45).  If anyone has suggestions, please reply.

Step37

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Re: Factoring inheritance
« Reply #47 on: August 14, 2017, 10:00:39 PM »
I assume it will be something, but I am not factoring it into my plans. Whatever it is will be a bonus. My parents are not open about money (I think they have plenty; I hope that they spend it and enjoy their retirement. My dad worked WAY TOO LONG - finally sold business/retired at 73) or their estate planning. I strongly suspect that their will is still as up to date as last time I got brave enough to broach the subject (after a very bad health scare four years ago, I asked and was told that it hadn't been updated since my sister and I would still have required guardians!! OMG... "yes, I need to get that organized" - ya think??!).

So, more than anything, I worry about the huge mess I will have to clean up if (when) they die without their affairs in order. My sister lives in the US and most of this will fall to me. I've been trying lately to drop tidbits about my (solid) financial situation, in the hopes that it will open a conversation/make them see that I don't need any of their money and would just like to help with planning so that when the inevitable happens, things are at least set up properly. I really, really need to have this conversation with them. It's just SO FUCKING AWKWARD. Very envious of those of you who've mentioned all the openness and organization about these issues in your families. Thankfully, my in-laws are completely opposite my parents, in that everything is organized and clear. They plan to spend it all. Power to them.
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Laura33

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Re: Factoring inheritance
« Reply #48 on: August 15, 2017, 06:35:55 AM »
What the heck am I supposed to do with an inheritance that I receive after the age of 75?!?   

I can give it to my kids, or donate, or whatever, but I CAN'T use it to reduce my savings plan or life choices today (I am 45).  If anyone has suggestions, please reply.

If you are confident the money will be there, consider it longevity insurance.  One of the things I am considering is buying one of those deferred annuities that begins paying out at 80 or 85 -- I'm always scared of running out of money, so if I know that I am covered from 80-on, I will feel more comfortable spending earlier, which in turn will allow me to enjoy the retirement I have planned.  You can serve the same goal with a large pot of money arriving some time between 75-80 -- if you're confident it's going to be there, you can spend down other assets more before that time, and perhaps even FIRE earlier.
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Goldielocks

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Re: Factoring inheritance
« Reply #49 on: August 15, 2017, 10:13:13 AM »
What the heck am I supposed to do with an inheritance that I receive after the age of 75?!?   

I can give it to my kids, or donate, or whatever, but I CAN'T use it to reduce my savings plan or life choices today (I am 45).  If anyone has suggestions, please reply.

If you are confident the money will be there, consider it longevity insurance.  One of the things I am considering is buying one of those deferred annuities that begins paying out at 80 or 85 -- I'm always scared of running out of money, so if I know that I am covered from 80-on, I will feel more comfortable spending earlier, which in turn will allow me to enjoy the retirement I have planned.  You can serve the same goal with a large pot of money arriving some time between 75-80 -- if you're confident it's going to be there, you can spend down other assets more before that time, and perhaps even FIRE earlier.
I see what you mean, but...

Honestly that is not very much money, due to pension-like money I will receive at the time, which is going to be around $1800 per month in today's dollars, for  myself, and is enough to afford basic, decent senior's care (room and board in a facility plus a little extra and health costs) ...  And if my need after age 80 is for not a lot of money, an inheritance can't materially affect my plans, you see?    It is far enough out that the $ buffer I need to create to account for sequence of returns risk far outweighs it.

When I thought about it, inheritance only makes a meaningful impact if you receive it at a time when you are collecting assets or pinched for cash flow..  receiving some of the potential inheritance before age 60 would allow me to change the retirement assets I need to build, but late in life?  Not so much.  Without it, your benefit is from the people being in your life, instead of the cash.
« Last Edit: August 15, 2017, 10:16:22 AM by Goldielocks »