Anybody else uncomfortable RECEIVING inheritance?

[johndoe]

I'm mid 30s, my parents are mid 60s.  Hopefully they live another 40 years, but I believe they intend to leave me a significant amount (I haven't asked about details but I'd guess $500k). I have 1 sibling, as far as I know they are in fine financial shape.  I'm near net worth $500k with 60% savings rate, yadda yadda. I don't account for any of this in my FIRE planning.  All of the family has good relationships.

My parents have mentioned (more than once) a desire to give to the 2 of us equally.  Although their kids are in fine financial shape, I think they genuinely get joy out of helping and ensuring stability.  Lately they've pitched the idea of a $10k gift now.  Their thought is "We're set now, let us help you while it could really mean something.  We don't want to wait 30 years to help".  While I appreciate their generosity, I feel uncomfortable RECEIVING this kind of gift (and feel similarly about an inheritance down the road).  I'd rather they go nuts with spending on themselves- pick up a new hobby or 10.  I think I get my frugality genetically...

Like the character in Idiocracy,  I do like money.  I think my mixed feelings come from the lack of independence that this money represents.  Is this something you've experienced?  Part of me wants to get a better picture of their finances to make sure they're covered for medical expenses etc. At the same time, I don't want to pry or make it appear I'm trying to maximize a future inheritance.  Am I weird?  Should I just say "thanks very much!" and stuff it all in VTSAX?  Thanks!

[BikeFanatic]

Mid 60’s is still ahem very young to be giving away money, but it is their choice and if they give it to you be grateful and do with it what you will. I personally think you should advise them to save it for possible future medical expenses or suggest a once in a lifetime trip like  Alaska. But if they want to give it to you best take it, my mother gave away 50 k to her husband family then needed the money back right away, for nursing home expenses, guess who had to give it to her?

[wageslave23]

I would say "Thank you but we don't need the money".  If they insist, then take it and put it in an account somewhere to save just in case they need it down the line.  If they don't end up needing it, then you keep it and/or give it away.  Starting to transfer excess money now is actually very smart.  There's a chance they will need a lot of end of life care.  If you have the assets, they drain those first.  If you don't have the assets, then medicaid pays.  You having the money in your name will allow you both to decide whats worth shelling out their own money for.  That's why they have 5 year clawback rules, hopefully they are preempting these rules by giving the money away now long before any major health issues.

[BikeFanatic]

Plus one to the above comments. That Medicaid clawback is why I had to pay back the 50 k that my mother gave away to manipulating family members.

[Turtle]

If they are insistent on giving you the money, another option would be to use it to fund a joint trip.  Take them someplace they might not spend the money to go on their own. 

If they protest, tell them you want to use that money to make memories together.  Win-win.

[clarkfan1979]

Plus one to the above comments. That Medicaid clawback is why I had to pay back the 50 k that my mother gave away to manipulating family members.

My mother uses money to manipulate people. As a result, I have to tell her that I don't want her inheritance and she should give it all to my brother. She only has 1 grandchild, which is my son. I'm guessing she is planning on giving a large sum to him in some sort of a trust. If he gets the money when he is 30 years old, I'm ok with it. If he gets the money when he is 18 years old, I would try my best to block it. However, I realize that I might not have a choice.

My son is 4 years old. He gets free tuition in the state of Colorado. If my mother is still alive when my son goes to college, it's my best guess that my mother is going to tell my son that he can go to college where ever he wants and she will pay for it. I would prefer that she not do that, but I don't think I will be able to stop her make the offer. When my son is 17 years old, I am going to have to explain to him that if he accepts the money from my mother, there are strings attached. It will be making a deal with the devil. She will own you and her joy will be controlling and manipulating your behavior for the next 4 years. I'm not looking forward to that conversation.

[tygertygertyger]

My parents are doing fine financially, but I don't expect an inheritance from them - I think it'll mostly be spent before they die, which I am FINE with.

My partner's parents are quite comfortable financially. My partner's mom's favorite thing in the world is giving gifts to people. And not just family, but friends, neighbors. She used to travel a lot for work, and she has this amazing circular gift economy going with her favorite taxi driver. (He gives her blueberries when he goes picking them, and a set of pots and pans, etc, and she's gifted his family free flights using her points - it's really sweet).

When my partner and I were planning to buy a house, his parents told us they planned to give us like 10-15k toward the down payment, because they had also given that amount to my partner's sibling for their first home. We were okay with that. (They are quite keen on spending equal amounts on their children.)

When we finally found a house, they wanted to quintuple the amount of money they were gifting us. Uh.... we really didn't need it. We'd been saving and are rather frugal ourselves. His mom tried then to suggest that she would just buy us stuff, lots of stuff, that we might need for the house. I told my partner that this was between him and his parents, and I was staying out of it.

None of this is manipulation on his parent's part - they're sweet and delightful. They just have the money, and also would prefer to help us along and see us enjoy it while they're alive.

In the end, my partner bargained down the amount they wanted to gift us, and he said we would buy stuff for the house using it. Everytime we purchase something, they come over and ooh and ahh over it.

I had a lot of reservations around accepting the money, particularly when it became a larger amount than I'd planned. I felt embarrassed. My mom had always raised me to take care of myself, and I always had. I didn't want to admit to my friends that we hadn't paid for all this ourselves!

(And by "all this", I mean really, the money went to refinishing the hardwood floors before we moved in and a new couch, after using a hand-me-down couch from the 80s for the last 6 years! I think we still have some street cred.)

It gave his mom a lot of joy watching us though. It strengthened family and community bonds, and if there's a bonus to having free money, I'd hope it would enhance someone's life. Your parents want to enhance yours. If you feel that there's no strings attached (and that's the piece that I would be careful of!!!!), then maybe you can accept it.

OR. If you like your parents enough to spend extra time with them, you can suggest they spend it on a cool family vacation for all of you. (That was our other plan pre-pandemic and pre-house - we had convinced his parents to go on a trip to see where the family came from in Europe. Don't think it'll ever happen now, with their health.)

[Jack0Life]

I'll take it happily if I know they have money.
If they don't have money, I'd refuse.

[Much Fishing to Do]

I'll take it happily if I know they have money.
If they don't have money, I'd refuse.

+1

I totally get and agree with the whole giving away money to someone when it could still be worth something to them.  20 years ago my folks gave me ($2k) 2 months rent out of the blue when I was just out of school, lost my job and had a pregnant wife who had just started unpaid leave.  That $2k was worth more to me then a $500k inheritance would be to me today.

[Abe Froman]

Plus one to the above comments. That Medicaid clawback is why I had to pay back the 50 k that my mother gave away to manipulating family members.

My mother uses money to manipulate people. As a result, I have to tell her that I don't want her inheritance and she should give it all to my brother. She only has 1 grandchild, which is my son. I'm guessing she is planning on giving a large sum to him in some sort of a trust. If he gets the money when he is 30 years old, I'm ok with it. If he gets the money when he is 18 years old, I would try my best to block it. However, I realize that I might not have a choice.

My son is 4 years old. He gets free tuition in the state of Colorado. If my mother is still alive when my son goes to college, it's my best guess that my mother is going to tell my son that he can go to college where ever he wants and she will pay for it. I would prefer that she not do that, but I don't think I will be able to stop her make the offer. When my son is 17 years old, I am going to have to explain to him that if he accepts the money from my mother, there are strings attached. It will be making a deal with the devil. She will own you and her joy will be controlling and manipulating your behavior for the next 4 years. I'm not looking forward to that conversation.

Sorry to hear this - must be one hell of a story.
When your son is old enough - 14/15-ish - might be worth sitting him down and describing what you have experienced, that nothing is ever truly free.

But I agree with what @Jack0Life stated - I would just be open and say something to the effect of ... you raised us well, thinking ahead, managing risk, taking care of our family. And in that we are OK and do not need it. I feel uncomfortable taking it, and I know you wouldn't mean it - but I would feel a weight following me. If gifting money to us and our kids would truly make you happy - then would you help me understand that your financial health is OK? I have read too many stories and worry too much .... yadda yadda....

I had to have a similar discussion with my MIL and FIL, and this is the round-about approach I took.
It landed softly enough as I hoped.

[reeshau]

If you are at all worried about your future or their future, then yes invest it.

If the question on both parts is a ridiculous one, then donate it to a worthy charity in their name.

Or invest it to accelerate your FIRE date, and be sure to spend some of that bonus time with them.

Spending on shared memories is a fine idea, too.

[clifp]

I'll take it happily if I know they have money.
If they don't have money, I'd refuse.

+1

I totally get and agree with the whole giving away money to someone when it could still be worth something to them.  20 years ago my folks gave me ($2k) 2 months rent out of the blue when I was just out of school, lost my job and had a pregnant wife who had just started unpaid leave.  That $2k was worth more to me then a $500k inheritance would be to me today.

+2  Before my mom, descended deep into dementia, she was quite insistent on giving money to her three children, even though I didn't need it all, and it was very much nice to have for my two sister. It gave her a lot of pleasure.  Plus who knows, this may have assuaged some of the guilt, she felt when in my junior year in college, they announced we are retiring early so no more college help for you.  A decade earlier they did the same thing to my oldest sister when an investment went south.   Or maybe it was just family tradition, her parents were also very generous.   It inspired me to pay for much of my niece's college education, when I was still in my 30s, but already a multimillionaire.

Anyway, turning down this money, unless they really need it, I think is extremely rude.  Be assured giving away money like this is a gift to the giver as much as the receiver, and not any type of burden.

[pdxvandal]

I expect a similar inheritance amount when I turn 59 (12 years away). I will accept it if it's there -- it would help me to financially give back even more to my alma mater and other local charities. If it's not, I can easily adjust my lifestyle and living situation to make sure I'm still living comfortably and not burn through the 'stache. It's just gravy.

[boarder42]

My parents started transferring wealth a few years ago. It was not part of our FIRE plan. As that wouldn't be independent. It did mildly help us along the was but was also a small portion of what we invested.  Assuming my parents quit all the day trading it's reasonable I could end up with multiple millions from them at some point even after all the wealth they've been transferring.

I don't know why you should feel bad about this. You're likely doing better things with this money than the avg person would and this is also their money and they are choosing to do this with it bc it gives them pleasure. So thank them for it and go on about life.

[DaMa]

My father uses money to manipulate people. I postponed going to college rather than allow him to pay for it.  If my parents gave me money,  I would bank it so that I could give it back to them if necessary.  It's very unlikely.  They are currently giving my brother ~$1k per month to help with childcare expenses.  This is the same father who was hypercritical of my decision to FIRE at 49.  This is the same brother who always talks about how rich he is.  (Insert eyeroll.)  Father and brother may not know that I know about the Economic Outpatient Care.

I have a vague plan to do something like this with my own children when I'm 70 and start collecting SS.  I expect I will have more income than I need, depending on the market performance. 

I like the idea of using the money to take vacations with your folks.  Just let them pay so no Medicaid clawback issues.

[StarBright]

If they are insistent on giving you the money, another option would be to use it to fund a joint trip.  Take them someplace they might not spend the money to go on their own. 

If they protest, tell them you want to use that money to make memories together.  Win-win.

This is exactly what we are doing with some gift money my parents gave us at Christmas.

My dad retired a couple of years before the pandemic, my mom retired from teaching mid-way through 2021. Their stache hadn't quite doubled, but had grown so much that it was significantly larger than it was when my dad retired.

They gave us a thousand dollars at Christmas "just because". So last week we invited them along on a trip with us this summer. It is to a place my mom has always wanted to go.

My dad doesn't like spending money on travel, so my mom doesn't get to travel to places she is interested in. So they gave us money and now we can "afford" to treat them to a trip that they would never spend money on otherwise.

Works out rather nicely :) 

FWIW - my parents are very upfront when talking about inheritance stuff; including talking about the dollar amount they aim to leave to my sibling and myself. We don't include the number in any of our future planning and I always tell them that I don't expect it and to spend it (and I mean it!) - but it is also important to them to leave us a little better off than they were. That is what their parents did, and their grandparents did for their parents.

[Wolfpack Mustachian]

I would just keep in mind,  money is fungible. Keep it in a separate account if you'd like. Watch it grow and give it to charity at some point.  Definitely don't stress about it if your parents are OK and the relationships are all healthy.

[zygote]

My parents have built more wealth than I ever will - my dad worked a normal-length career at a much higher paying job than mine, and their spending was very reasonable over the years. When they offered me an early pass down of $15k, I took it gratefully. At first I wasn't sure what to do with it, because my savings and spending are pretty dialed in at this point. I decided to split the difference and shovel half into VTSAX, and put the other half into a fun money fund that I had to use on travel or other hobbies. It makes my parents happy that they get to feel like they are contributing both to my financial security, and also enable some trips I might not have taken otherwise.

I agree with others that you should accept the money if they want to give it. What you do with it will depend on the details of you and your parents' situations and dynamics. If you're worried they may need it back, just invest it somewhere that's easily retrievable. Otherwise, you have the freedom to allocate it as you normally would or do something special with it.

[jim555]

Don't look a gift horse in the mouth.

[OtherJen]

Husband and I are not planning on receiving an inheritance. Both sets of parents paid our undergrad costs not covered by scholarships. Emerging into young adulthood with no student debt was more than enough of a gift.

Until last year's financial reforms, my father, a retired union factory worker, didn't know whether the pension he'd paid into for 42 years would continue to pay out. Mom didn't start working full-time in a job that would allow retirement savings until she was in her 40s. I have no idea what my in-laws' financial situation is, but my FIL was self-employed and MIL has had some significant health issues recently. Both sets of parents seem to be comfortable and have assured us that their finances are in good shape; we are grateful for that and don't expect anything beyond it.

If we WERE in that situation, though, I agree that the wisest course of action would be to accept it gracefully and invest it in an account that can be easily accessed.

[SmartyCat]

I would just keep in mind,  money is fungible. Keep it in a separate account if you'd like. Watch it grow and give it to charity at some point.  Definitely don't stress about it if your parents are OK and the relationships are all healthy.

This. You know your parents, and how they handle money and relationships. If they are manipulative or spendthrift I'd give it a hard pass in the kindest way possible. But some people take great joy in generosity and in seeing the next generations prosper, and don't want to wait until they are gone to start sharing their resources.

[Villanelle]

I have seen that it truly brings my parents joy to give to their children.  My mom gets true pleasure from buying me a sweater.  It used to bother me because I don't need a sweater (I can buy my own, and already have more than enough), but she'd insist on taking me shopping and would get truly dejected if I didn't find anything.  Sometimes, she would find something in a store she liked but comment that she wouldn't buy it for herself unless I found something, too.  On more than one occasion, I suddenly "remembered" that my workhorse navy t-shirt was looking worn and, Oh look, they have navy tees and they are 50% off!, or similar.  As I said, it used to bother me because I can certainly afford my own clothes, and often times these were things I not only didn't need, but sometimes barely wanted.  But once I realized how much genuine pleasure she got from this, it stopped bothering me and I am much better at playing along.  I still try to be very frugal about what I pick out, but I pick it out with enthusiasm.  I also show enthusiasm when opening a gift that I may not need, and may never even wear, because that is my gift back to her.

My parents are in their late 70s.  Very healthy and active for their ages, but none the less the numbers are getting larger than I'd like.  The last few years, they have given us larger and larger checks for Christmas.  They can certainly afford it and it makes them happy.  I generally tell my mom that I just spent some of the Christmas money on X thing, even if it is something I would have bought anyway, to help prolong her joy in the gift.  Even just, "I sent off a check to fund some of my IRA for the year, using some of that Christmas money!" thrills her.  Just this week I commented that I sent out the rent payment but thanks to their check, it felt like I wasn't paying rent this month, and that delighted her. 

They also offer to take us on an essentially all-expenses paid vacation most year.  Most of the time, we are unable to go, but when we are able, we try to.  Again, they love sharing the experience with us, having dinner with us every night, sharing cocktails at a beachside bar, etc.  So yes, it is a gift to us, but they get perhaps even more out of it than we do.  (If we offered to pay to take them on a trip, they wouldn't hear of it.  We can't even pick up the check for dinner, though they do accept a thank you gift for the vacations, which is often us paying for a massage for mom or for an excursion for the group. If I said I wanted to use the money they gave us to make memories so how about we all go on this cruise I've found, they would almost certainly either say no, or buy the cruise for everyone.) 

My sister still gets annoyed.  I've tried to explain to her that finding a few things in a store that she will wear, even if she doesn't need them or feel wildly in love, makes mom happy and she should just play along.  especially because if we don't pick things out, mom buys stuff on her own, and that can be even worse.  I'll pick something that I at least kind like; mom sometimes misses the mark. But sister can't bring herself to do that, or to act enthusiastic with whatever gift shows up.  I wish she would because it really does make mom (and dad) happy to see us ohhh and ahhh over the PJs they got us for Christmas.

They should be spending their money on things that bring them happiness.  But being generally frugal, buying stuff doesn't bring them much happiness in most cases.  Buying it for their children seems to, as does taking their children on vacation.  And so too does leaving their children very large sums of money.  So I look at all these things not as them spending money on a sweater for me or plan tickets for me and my spouse, but as them buying themselves the experience of feeling like they have taken care of their children, made their children happy and secure, and setting their children up to never ever worry about money.  When you frame it like that, I think it becomes much more palatable. 

I'm visiting them in a couple weeks.  Mom will no doubt want to go shopping.  And I will go out of my way to find at least 1 or 2 things about which I can either be or act enthusiastic, and that are fairly moderately priced.  (They could afford whatever I picked.  I once saw a handbag in the window of a store in an outlet mall and expressed genuine enthusiasm for it, and I was actually looking for a new handbag. We went in... and the bag was $1400!  Mom actually tried to talk me in to it.  This is a woman who likely has never spend more than $50 on a purse, but she wanted to spend $1400 on one for me, and certainly could afford to do so without even noticing the expense.  I had to talk her out of it.) My mom will remember the day we went shopping for weeks, or longer, with smiles and satisfaction. Why would I deprive her of that, just because my pride  tells me I can afford my own navy tee and my practicality says I don't need another sweater?

Letting them give these gifts to me, and being enthusiastic about it, is the gift I give back to them.  Because it really does make them happier than just about anything else they might choose to spend it on. 

(If money were in any way an issue for them, my answers might be different, but they are very, very secure. Also, they have never once used the money or their generosity as a weapon or bargaining tool.)

[Arbitrage]

Not really a dilemma I'll have to deal with; no parents have any significant assets to the extent that such considerations would arise.  We're more worried about having to support them, as none are good with money, and some are downright bad.

Still, I have had a few interesting experiences.  My mother, who remarried after my father passed, has started to indicate that she has some designs on spreading her inheritance unevenly, based upon how she's being treated by one of her (four) sons.  In addition, one of my other brothers has apparently told her on multiple occasions that he doesn't want any inheritance from her; I know that his wife's family is reasonably wealthy, which may be partly why they have taken that stance.  My mother has tried to hint at various ways she would like to favor me (really my kids) over some of the others due to the lack of relationship she has with some other grandkids.

I'm generally of the mind that it's her money, and can do as she wishes with it.  However, I do not relish the possibility of family jealousy/infighting if an unequal distribution of assets ends up being in the will.  One good thing is that the brother who may be getting short shrift has plenty of money.  Then again, one of the other brothers does not.  We shall see. 

[Freedomin5]

It is just as important to be a gracious receiver as it is to be a generous giver.

If it brings your parents joy to give to you, why would you deny them that joy? By being grateful and showing your appreciation for the gift, you are giving a gift of joy and pleasure to the giver.

I think a better question to ask is why you feel uncomfortable receiving the gift? Do you feel that you are unworthy of receiving a gift? Do you feel that your parents have already done so much for you and you feel guilty getting more from them (also a subset of feeling unworthy)? Are you worried your parents won’t have enough to live on, which basically means you don’t trust your parents to be able to manage their personal finances even though they have been doing it for a lot longer than you have? Do you not trust them to make good decisions for themselves? Do you think you know better than they do what will bring them joy (giving money to you vs. spending on themselves)? You mentioned a “lack of independence” but you also mention that your family has good relationships — are you worried this money comes with strings attached or that the money will change the relationships?

Btw, being a gracious receiver doesn’t mean you have to spend all the money. If you like, just keep it in your investments. Then, later, you are free to give back to your parents.

[DaTrill]

I'm mid 30s, my parents are mid 60s.  Hopefully they live another 40 years, but I believe they intend to leave me a significant amount (I haven't asked about details but I'd guess $500k). I have 1 sibling, as far as I know they are in fine financial shape.  I'm near net worth $500k with 60% savings rate, yadda yadda. I don't account for any of this in my FIRE planning.  All of the family has good relationships.

My parents have mentioned (more than once) a desire to give to the 2 of us equally.  Although their kids are in fine financial shape, I think they genuinely get joy out of helping and ensuring stability.  Lately they've pitched the idea of a $10k gift now.  Their thought is "We're set now, let us help you while it could really mean something.  We don't want to wait 30 years to help".  While I appreciate their generosity, I feel uncomfortable RECEIVING this kind of gift (and feel similarly about an inheritance down the road).  I'd rather they go nuts with spending on themselves- pick up a new hobby or 10.  I think I get my frugality genetically...

Like the character in Idiocracy,  I do like money.  I think my mixed feelings come from the lack of independence that this money represents.  Is this something you've experienced?  Part of me wants to get a better picture of their finances to make sure they're covered for medical expenses etc. At the same time, I don't want to pry or make it appear I'm trying to maximize a future inheritance.  Am I weird?  Should I just say "thanks very much!" and stuff it all in VTSAX?  Thanks!

No.  Keep the money separate from your own earned money and use it in the future for your own charity purposes.  Your parents may be entering an AUM where the government will get 40% of every dollar when they pass and would rather have their children receive 100%.  I was able to pay for college (local state University) mostly from a distant family member inheritance and greatly appreciated the gesture.       

[boarder42]

I'm mid 30s, my parents are mid 60s.  Hopefully they live another 40 years, but I believe they intend to leave me a significant amount (I haven't asked about details but I'd guess $500k). I have 1 sibling, as far as I know they are in fine financial shape.  I'm near net worth $500k with 60% savings rate, yadda yadda. I don't account for any of this in my FIRE planning.  All of the family has good relationships.

My parents have mentioned (more than once) a desire to give to the 2 of us equally.  Although their kids are in fine financial shape, I think they genuinely get joy out of helping and ensuring stability.  Lately they've pitched the idea of a $10k gift now.  Their thought is "We're set now, let us help you while it could really mean something.  We don't want to wait 30 years to help".  While I appreciate their generosity, I feel uncomfortable RECEIVING this kind of gift (and feel similarly about an inheritance down the road).  I'd rather they go nuts with spending on themselves- pick up a new hobby or 10.  I think I get my frugality genetically...

Like the character in Idiocracy,  I do like money.  I think my mixed feelings come from the lack of independence that this money represents.  Is this something you've experienced?  Part of me wants to get a better picture of their finances to make sure they're covered for medical expenses etc. At the same time, I don't want to pry or make it appear I'm trying to maximize a future inheritance.  Am I weird?  Should I just say "thanks very much!" and stuff it all in VTSAX?  Thanks!

No.  Keep the money separate from your own earned money and use it in the future for your own charity purposes.  Your parents may be entering an AUM where the government will get 40% of every dollar when they pass and would rather have their children receive 100%.  I was able to pay for college (local state University) mostly from a distant family member inheritance and greatly appreciated the gesture.       

Umm the op said they think they may inherit 500k we're not approaching inheritance tax territory.

[IslandFiGirl]

@clarkfan1979 Off topic...but, can you shed some light on this?  I have a kid about to start college in August...would love to know about free tuition in Colorado.  Thanks
***My son is 4 years old. He gets free tuition in the state of Colorado.

[Holocene]

I think my mixed feelings come from the lack of independence that this money represents.  Is this something you've experienced?  Part of me wants to get a better picture of their finances to make sure they're covered for medical expenses etc. At the same time, I don't want to pry or make it appear I'm trying to maximize a future inheritance.  Am I weird?  Should I just say "thanks very much!" and stuff it all in VTSAX?  Thanks!

I've experienced the same thing.  I've been very fortunate in the gifts I've received.  I still have mixed feelings about it.  Very grateful and happy, but something still feels wrong about not earning it myself.  I know that's not really rational and I've come to accept it for what it is, but I don't think I'll ever feel 100% comfortable with it.  So I know how you feel.  But I have seen my parents finances and I know that they're set.  So at least that helps a bit.  I'd still rather they just spend it on themselves, but at least I know they are very financially secure and I don't need to worry about them.

I inherited an IRA from my grandparents that my parents passed on to me and my siblings.  My parents didn't need the money and we could still do the stretch IRA so it made a lot of sense to skip a generation.  But it is a significant amount that still doesn't really feel like "mine" because I didn't earn it myself.  But it is mine, so I'm considering it an extra buffer in my FIRE plans.  I don't need it, but if the SHTF, I'd rather have it than not.  If my parents ever needed it, I would happily give it back, but I don't see that realistically ever happening.  I'll withdraw from this inherited IRA in FIRE since I can easily do so before 59.5 unlike my 401k.  But I plan to continue donating to my DAF and eventually doing QCDs when eligible.  I'm so grateful for everything I've been given and realize how ridiculously lucky I am.  I hope to give back as much as I was gifted.  But in the meantime, having this extra buffer is helping to settle my nerves a bit about FIREing in a couple months.  I'm trying to just be ok with that and stop feeling guilty.

[clifp]

Very nicely put @Villanelle.

As you said its, far more practical to give your kids money than try and buy them presents. Every once in while, my mom would find something, I needed that I didn't know I needed and hadn't bought itself. But for every truly valuable present, there were 3 misses.

I meeting tomorrow, with my college alma matter planned giving representative to discuss my donation to them. I'm quite excited about the conversation.

I don't think I truly appreciate how important and gratifying giving to others is until after I was 50, saw the pleasure it gave my mom.

[Jack0Life]

I'll take it happily if I know they have money.
If they don't have money, I'd refuse.

I'll elaborate on my past situation.
When I was single 10+ yrs ago, I had quit my FT job and working a PT job.
My Mom thought I was wandering through life and barely getting by.
She used to give me money here and there every time I see her and I happily accepted.
Then when I got married(wife from another country), she wondered how on earth I was going to support my wife. She continued to give us fairly large amount here and there.
The truth is I ended up making much money money working my PT job than I ever had working the FT gig.
The charade ended when we moved and bought a much nicer house while still keeping the old house.
Now she rarely gives us money any more.
When ever I tell this story, people wondered why I never told her the truth and kept accepting her money. Well, my parents are freaking rich even though they live like poor folks. They get by on just their SS while they are millionaire.
If it made my Mom happy that she thinks she's helping us out all those times, I'll gladly accept the money every time.

[ROF Expat]

[

This. You know your parents, and how they handle money and relationships. If they are manipulative or spendthrift I'd give it a hard pass in the kindest way possible. But some people take great joy in generosity and in seeing the next generations prosper, and don't want to wait until they are gone to start sharing their resources.
[/quote]

I agree with SmartyCat.

The operative statements are from your first post:  "I think they genuinely get joy out of helping and ensuring stability" and "Their thought is 'We're set now, let us help you while it could really mean something.  We don't want to wait 30 years to help.'"  Those both seem like well thought out, reasonable statements.  If their gift gives them joy and they want to see the results of their gifts now rather than give them after they are dead, why wouldn't you want to accept their gesture in the spirit in which it is given? 

FWIW, I am in much the same position.  My parents are financially very successful (but self-made).  Their greatest gift to me was teaching me about and modeling having a healthy relationship with money.  They funded University educations for their children and gave us money to set up our households when we went off to our first jobs so we could start out with no debt.  At one point, when they were in their 60s, they gave each of their children a cash gift, saying almost exactly what your parents are saying.  They only did that once, but they generously spend money to subsidize vacations that bring extended family together and they contribute to college funds for grandchildren and great grandchildren. 

Even so, I do have some discomfort with the concept of inheritance.  Years ago, my parents told me, for my own financial planning purposes, what their then net worth was.  They believe that transparency about their net worth and their inheritance plans is part of a healthy relationship with money.  Even though they wanted me to be able to plan, I could not and cannot bring myself to plan on their deaths.  I told my parents that I was already financially comfortable, in part due to them.  I told them I hoped that they would live a very, very long time and encouraged them to enjoy spending their money on themselves without worrying about leaving anything behind.  Maybe it is strange, but I base all my financial planning (I'm already FIRE anyway) on the assumption that they will spend all their money on cocaine and Ferraris in the final years of their life.  It just seems wrong to "plan" on receiving money when my parents die. 

[wageslave23]

@clarkfan1979 Off topic...but, can you shed some light on this?  I have a kid about to start college in August...would love to know about free tuition in Colorado.  Thanks
***My son is 4 years old. He gets free tuition in the state of Colorado.

I don't want to speak for him, but I believe he is a college professor.  Texas offers free college tuition.

[DadJokes]

I like the suggestion of using the money to do a joint trip together or something similar. My in-laws are planning to do something similar in which they take all of their kids/grandkids to Disney World sometime. That sounds miserable to me, but I'm not going to be a stick in the mud if they insist.

I would also accept money given, though the money would just go into a taxable brokerage. It would either be given back to them if they needed it or used to pay off the house sometime down the line.

[Villanelle]

[

This. You know your parents, and how they handle money and relationships. If they are manipulative or spendthrift I'd give it a hard pass in the kindest way possible. But some people take great joy in generosity and in seeing the next generations prosper, and don't want to wait until they are gone to start sharing their resources.

I agree with SmartyCat.

The operative statements are from your first post:  "I think they genuinely get joy out of helping and ensuring stability" and "Their thought is 'We're set now, let us help you while it could really mean something.  We don't want to wait 30 years to help.'"  Those both seem like well thought out, reasonable statements.  If their gift gives them joy and they want to see the results of their gifts now rather than give them after they are dead, why wouldn't you want to accept their gesture in the spirit in which it is given? 

FWIW, I am in much the same position.  My parents are financially very successful (but self-made).  Their greatest gift to me was teaching me about and modeling having a healthy relationship with money.  They funded University educations for their children and gave us money to set up our households when we went off to our first jobs so we could start out with no debt.  At one point, when they were in their 60s, they gave each of their children a cash gift, saying almost exactly what your parents are saying.  They only did that once, but they generously spend money to subsidize vacations that bring extended family together and they contribute to college funds for grandchildren and great grandchildren. 

Even so, I do have some discomfort with the concept of inheritance.  Years ago, my parents told me, for my own financial planning purposes, what their then net worth was.  They believe that transparency about their net worth and their inheritance plans is part of a healthy relationship with money.  Even though they wanted me to be able to plan, I could not and cannot bring myself to plan on their deaths.  I told my parents that I was already financially comfortable, in part due to them.  I told them I hoped that they would live a very, very long time and encouraged them to enjoy spending their money on themselves without worrying about leaving anything behind.  Maybe it is strange, but I base all my financial planning (I'm already FIRE anyway) on the assumption that they will spend all their money on cocaine and Ferraris in the final years of their life.  It just seems wrong to "plan" on receiving money when my parents die.
[/quote]

I treat my future inheritance somewhat similarly.  I've been told an approximate number and frankly, even if it ends up being half that, if it significant.  But I don't take that amount onto my stache for planning purposes.  The only way I factor it into FIRE plans at all is as an additional safety net.  Sort of a mental, "Well, if that plans fails and the market goes to absolute shit and stays there, and the side hustle dries up and we've economized all we can and we can't find jobs to go back to and SS is means-tested or cut by a huge margin, then there is also whatever inheritance I get, as another fail safe to see us through."   

But it isn't like we are going to FIRE any earlier based on the ASSumption that I have significant money coming to me.  I think my parents might actually want us to do that, but I just couldn't.  Likely, we will already have someone (DH) working longer than necessary because he is kinda a SWAMI.  But I know it brings my parents both comfort and joy to know they are leaving their children a large amount that helps shore up our financial positions.  (Related:  I make sure to give them at least broad strokes up dates that let them know we are doing quite well, without seeming like financial reports.  I casually mention the astronomical amount our rental property is now worth, or that I just updated my spreadsheet and our investments are worth over $X now.  I try to make it seem like casual conversation, but really it is me saying, "We are fine.  More than fine.  That's not something you ever need to worry about.")

[RedmondStash]

It's hard feeling like a grown-up when your parents give you money. But this sounds like something that would give your parents pleasure.

My questions are:

1. After they're gone, will you regret not having accepted the money?
2. If you take it, will you feel there are strings attached that you're uncomfortable with?
3. If, in the future, your parents need money, would you want to support them financially even if you don't take their money now?

Given that you're saving a lot now, chances are you won't blow their gift on something frivolous. You could always invest it and sort of keep it earmarked for emergencies, or for them in the future, just in case. Or you could spend some of it on luxuries you wouldn't otherwise treat yourself to.

My mother has given me some money. It's a little uncomfortable, but also appreciated. She enjoys doing it and I know she won't need it. I decided to spend some of it on nicer things and let her know what I spent it on, so she can have that warm happy glow of making my life a little cushier (like a nicer new couch to replace the one that finally fell apart, a new TV to replace my 20-year-old one).

[zolotiyeruki]

Uncomfortable? Nah.  But that's because of 1) how it is given, and 2) what we use it for.

On point 1): A few years ago, my last grandparent passed away, and my already-retired-and-financially-secure father was the only inheritor.  He chose to distribute the proceeds to his own children over the course of several years, since he didn't the money himself.  It was given with absolutely no strings attached--no manipulation, no expectations of how it would be spent, etc.

On point 2): If I spent that money on lifestyle inflation (i.e. persistently-increased spending based on the gift), or used it for normal expenses (i.e. things we should budget for), then I'd feel uncomfortable.  Instead, we purchased something we otherwise would have not been able to buy: a few extra months of future retirement, by investing in VTI.

Here's what I'd suggest if you feel a little squeamish about accepting the money: open a separate brokerage account, and invest the money there.  This leaves all your options open--if your parents end up needing money in the future, you'll have it available to give back.  If you decide in the future you want to fund a trip with them, the money will be there.  If you decide after a long time that you don't want it at all, it'll be available for you to donate to the charity of your choice.  If you run into big medical bills or some other such tragedy, that resource will be there.  If you need to move, and need a down payment, but all your funds are tied up in retirement accounts, this account will still be there.

Rather than thinking about this gift as icky money, think of it as a gift of options and freedom.  That's what your parents are giving you.

[DaTrill]

I'm mid 30s, my parents are mid 60s.  Hopefully they live another 40 years, but I believe they intend to leave me a significant amount (I haven't asked about details but I'd guess $500k). I have 1 sibling, as far as I know they are in fine financial shape.  I'm near net worth $500k with 60% savings rate, yadda yadda. I don't account for any of this in my FIRE planning.  All of the family has good relationships.

My parents have mentioned (more than once) a desire to give to the 2 of us equally.  Although their kids are in fine financial shape, I think they genuinely get joy out of helping and ensuring stability.  Lately they've pitched the idea of a $10k gift now.  Their thought is "We're set now, let us help you while it could really mean something.  We don't want to wait 30 years to help".  While I appreciate their generosity, I feel uncomfortable RECEIVING this kind of gift (and feel similarly about an inheritance down the road).  I'd rather they go nuts with spending on themselves- pick up a new hobby or 10.  I think I get my frugality genetically...

Like the character in Idiocracy,  I do like money.  I think my mixed feelings come from the lack of independence that this money represents.  Is this something you've experienced?  Part of me wants to get a better picture of their finances to make sure they're covered for medical expenses etc. At the same time, I don't want to pry or make it appear I'm trying to maximize a future inheritance.  Am I weird?  Should I just say "thanks very much!" and stuff it all in VTSAX?  Thanks!

No.  Keep the money separate from your own earned money and use it in the future for your own charity purposes.  Your parents may be entering an AUM where the government will get 40% of every dollar when they pass and would rather have their children receive 100%.  I was able to pay for college (local state University) mostly from a distant family member inheritance and greatly appreciated the gesture.       

Umm the op said they think they may inherit 500k we're not approaching inheritance tax territory.

We don't know parents other gifts or anything about them.  It's not the receiver who will be taxed but the estate of the parents.  Biden hinted at lowering estate tax exemption to as low as 1 million (while allowing Zuck and other Lib donors to hide billions) so they may want to avoid this outcome.     

[WSUCoug1994]

Similar to some of the other comments - we are likely to receive a sizable inheritance from my parents who are in their 80's.  My father was exceptional in how he has managed his money but a few years ago I suggested that he has a copy of statements sent to me to make sure nothing crazy happens.  I know exactly what is likely coming our way.  My father has a tremendous amount of pride associated with passing along this money to us as well as our kids.  He talks to me about it all of the time.  It simply makes him smile even though he knows we don't need it.  My sister on the other hand - well she has been tapping into her side of the inheritance for the last 10 years - that does not bring a smile to his face lol.  He gets more enjoyment out of the idea of giving us the money than he does spending it himself.  He also knows exactly where we are financially.

We aren't planning on any of it but if we get it we likely won't spend any of it on ourselves (unless there is some massive tragic need for it) but we will be donating to some of our favorite charities, schools and medical research.  I don't get uncomfortable about it as we have been super transparent with each other and we often talk about where the money should go together.  I like the way it has all come together.

FWIW - my mom's physician tells her she has the physiology of a 50 year old so she might outlive us all.  lol.  Not sure if I then give her my money? hahahaha

[js82]

Yes and no.

1) Quite uncomfortable with the "You're going to get this money when we pass away" discussion.  I've made it clear to my parents that my wife and I are in good shape financially and we don't need the help.  (Ditto for my sister and her husband).  Thankfully my parents(late 60's/early 70's) are doing a lot with their retirement, including international travel, etc.  I'd rather they enjoy their retirement while they are still mobile and healthy enough to do so, than worry about saving money for us after they pass away, and find the general concept of an inheritance tied to anyone's death somewhat uncomfortable.

2) Much more comfortable with the "we're going to give you a some money not exceeding the gift tax exemption each year" gifts.  Again, don't "need" it, but it was nice (particularly in 2021, where we had a decidedly non-frugal wedding and honeymoon that this helped defray the cost of).

I don't know their exact net worth - but I estimate that my parents, my one living grandparent, and my aunt who have given me fairly generous financial gifts in adulthood, are all well enough off that these gifts wouldn't have significantly compromised their lifestyles.

As others have said, I don't want them to compromise their enjoyment of their older years for me, but if giving gifts bring them joy I'm on board with that.

[PDXTabs]

In my family we tend to split inheritances evenly between children without regard to need. In some ways this is good because it removes any financial means to manipulate your children. Receiving an inheritance that I don't need won't make me feel uncomfortable. It does however make me feel uncomfortable when my mom occasionally offers me money that I don't need while she's still alive. I just tell her to hang on to it for me.

[Dave1442397]

We have one family member who's expecting a decent inheritance from my mother-in-law. I take care of MIL's finances, and this is the message that pops up on her account every month (the extra spending is usually more than this). We joke that it's a race to see if the casino can get the rest of her savings before she dies.

My parents have no investments, but their house is worth around $800k, and they always joke that they bought well (they paid $12k for the house in 1973) and that the proceeds will be split evenly between their four children.
 

[wageslave23]

I'm surprised so many people don't know their parents' financial situation.  I know how much they earn, how much in savings, and how much of a pension they will be receiving.  Knowing how much or little they have would in no way affect our relationship.  But it does help knowing they will be ok in retirement and that I won't have to help them.  And once they hit the dementia years, it will help me take over their financial decisions.  I plan on our kids knowing all of the details of our finances.  Its both a learning opportunity and a matter of intimacy.  On a broader note, I don't understand not being able to talk to your parents about anything.  They are your parents, there should be no protecting of perceptions.  Again, I hope that is the relationship I have with my kids.

As an example, my mom was telling me how stressed she is about making decisions on their kitchen remodel.  Its been on going for 6 months.  I finally told her, just make a decision and get it done - at the rate you are going you are both going to be in a nursing home before the kitchen is finished.  I feel like we can say whatever we want to each other because we know that we love each other.  And of course I was mostly joking.

[Fomerly known as something]

My mom decided years ago to pass through some of there social security to their kids at Christmas and my Birthday.  It use to bother me, but she and my father want to do it.  I take it, I use to immediately give it away to charity, it’s only in the last few years when they have begun to spend more on myself that I now look to use it on something I know I wouldn’t normally buy for myself.

[FIREin2018]

Plus one to the above comments. That Medicaid clawback is why I had to pay back the 50 k that my mother gave away to manipulating family members.

why did you have to pay it back?

I'm in the same boat as the op.
I fired at age 48.
My mom is 70+ and is worth $1M+.

She has a trust to avoid the medicaid clawback issue.
She's been giving me $10k/yr  tax free gift that I stick into small cap.

She can easily afford the $10k.
I don't want the inheritance for as long as possible

[Captain Cactus]

I was thinking about this very topic the other day.  I won't really need a $1,000,000 inheritance when I'm 65 because I'll have my own portfolio and I'll be too damned old to do anything fun anymore.  BUT...I could really use $250,000 now to help set up my kids' college savings plans, give me some additional options in my professional and personal life, and be able to enjoy it while my mom's still around to see me enjoy it.

My mom's not interested in doing that.  Out of one side of her mouth she's always saying how she has more than enough, could live off her retirement even if it was entirely in cash for the rest of her days and social security is a bonus, etc...  But out of the other side of her mouth she feels insecure that it's not enough.

So yeah.  It's her money, not mine.  And her money will probably end up going to the nursing home.

[FIREin2018]

I was thinking about this very topic the other day.  I won't really need a $1,000,000 inheritance when I'm 65 because I'll have my own portfolio and I'll be too damned old to do anything fun anymore.  BUT...I could really use $250,000 now to help set up my kids' college savings plans, give me some additional options in my professional and personal life, and be able to enjoy it while my mom's still around to see me enjoy it.

My mom's not interested in doing that.  Out of one side of her mouth she's always saying how she has more than enough, could live off her retirement even if it was entirely in cash for the rest of her days and social security is a bonus, etc...  But out of the other side of her mouth she feels insecure that it's not enough.

So yeah.  It's her money, not mine.  And her money will probably end up going to the nursing home.

set up a trust and let medicaid pay for the nursing home.
stick EVERYTHING she currently owns in that trust (house, non-retirement $) so the state doesnt see it when it does their 5yr look back when she requests the state pay for her nursing home.

after she creates the trust, she cant buy anything of value unless she modifies the trust (and restarts the 5yr clock)

[Just Joe]

I'm surprised so many people don't know their parents' financial situation.  I know how much they earn, how much in savings, and how much of a pension they will be receiving.

Some families don't talk about money. Ever. Mine is one of those. They are in their 70s and I still don't know. And my sibling doesn't know either. All I know is what Zillow can tell me their property is worth. And - I have a good relationship with my parents. Its just how they are.

I feel like they are doing fine.

Growing up I never knew what things cost or how much money people made or exactly what "expensive" really meant. It was a huge disadvantage when entering adulthood. It is something DW and I are doing differently with our kids. 

[K_in_the_kitchen]

Short answer: No, I'm not uncomfortable receiving an inheritance.

Long answer: I think my answer is no because there's not really much to receive.  My dad might stick to his plan to leave us each something from the sale of the home he shared with my mother, but I'm not counting on it.  Last time he mentioned it, it was going to be be about $20K per heir, but I'm pretty sure he's dipped into it again.  This is less than half of what each heir should have received based on the terms of the trust.  He poured significant money (more than $100K) into his new wife's house, of which he isn't on the title and her children will inherit.

MIL won't have anything to leave anyone.  If by chance her car is paid off I suppose SIL will take it.  In all likelihood it will cost us money when MIL does, since she refuses to do any advance funeral planning on the superstition that it will make her die, so someone is going to have to pay for a funeral and plot and DH's siblings can't afford it.  There's no will, but also no assets.  Long ago MIL told me she didn't plan to leave anything to DH because we don't need it, but like I said, there's nothing to inherit.  Even the furnishings will stay in the house, which belongs to two of her grandchildren (who don't live there -- they allow their grandmother and their mother to live there, and MIL has taken out a mortgage on it based on having financial power of attorney, which she pays).

DH did receive an inheritance when FIL died. It was split evening between the heirs and wasn't based on need.  It wasn't a huge amount of money, but we weren't going to turn it down, either.

We intend to also divide the cash assets of our estate evenly and not based on need, but only one child will inherit the house.  Right now the house is part of the value of the estate, so the child who gets the house would get less cash, but that may change as we get older -- the child who wants to stay in this city has said they plan to help care for us (not health care, just keeping up with house stuff as we get older, as he has seen our next door neighbors' son do).  If this happens we will leave the house to this child and then split the cash assets evenly, leaving the house out of the calculations.

We do anticipate advancing parts of the inheritance ahead of our deaths, but not until our children are settled into their adult lives.

[rmorris50]

Might to think how you will feel when the roles are flipped down the road.

I’d take the money and save it for a good future use or ask the parents to rent a beach house for a week instead and invite the family for free to build memories.


Sent from my iPhone using Tapatalk

[Drink Coffee And Stack Money]

I would say "Thank you but we don't need the money".  If they insist, then take it and put it in an account somewhere to save just in case they need it down the line.  If they don't end up needing it, then you keep it and/or give it away.  Starting to transfer excess money now is actually very smart.  There's a chance they will need a lot of end of life care.  If you have the assets, they drain those first.  If you don't have the assets, then medicaid pays.  You having the money in your name will allow you both to decide whats worth shelling out their own money for.  That's why they have 5 year clawback rules, hopefully they are preempting these rules by giving the money away now long before any major health issues.

This was my exact thought. If they want to dish it out then take it. You can always set the money aside and give it back if needed.

I love to be able to help my family while I'm here on this space rock. While I'm still in my 40's I come from a BIG family, so I have nieces and nephews in their 30's, and some great nieces and nephews that will soon be teenagers. Over the last year or two I've become much more generous with them and it's a joy for me to see them "light up" when I gift them something nice or help them out, even though they are all very financially stable as far as I know. I have a great niece that will be driving in less than 5 years and I already have money set aside in case she needs help buying a car.