Squandering the Kids’ Inheritance
March 5, 2010 by MJP
Filed under Boomer Lifestyle
Are you planning on leaving an estate to your children? Are you hoping for an inheritance from your own family to help fund your retirement? Let’s talk about this for a minute.
< On the subject of parents, kids, and inheritances, I found a short article from CNN/Money fascinating in its simple message: If you want to inherit, treat your parents nicely.
The scary part of having elderly parents with money is that they will waste it away. The examples stated in the article are classic, including an elderly father lavishing expensive gifts on a gold-digger girlfriend. Fortunately, I don’t have those problems but I know others who do. We hate to see that kind of behavior in our family members, inheritance or not.
The authors’ research confirms a logical conclusion with a double-payoff. Children who treat their parents well (as we all should strive to do) thereby motivate their parents to want to leave the kids something at death. One consequence of this motivation is that the parents are less inclined to spend their money in meaningless or wasteful ways while they are alive. Bingo – everyone wins.
I’m not suggesting that treating your parents well should be financially motivated. Don’t even bother with that strategy. Just be a caring family member. The simple things are what matter – call and visit! Maintain those family bonds through communication. That way, elderly parents won’t be looking in the wrong places for attention, and then throwing their money in those wrong places.
Here’s another suggestion: send a link to this article to your own kids. Plant the seed for the future!
Source: Get your parents to stop spending your inheritance.
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Cathy – Point taken about my “lofty perch.” Unfortunately, I can only write about what I know (or think I know) and what I experience. But I will make a better effort to relate to a broader audience. As for the CNN article I referenced, perhaps you and I see things differently. I have no desire or plan for inheriting but if I discovered my parents wasting their money to a point where they would run out (which happens all too often), I would try to intervene to preserve their finances, not an inheritance. The point of the article I cited was that treating your parents nicely can help in that effort because parents would then be less-inclined to waste away what they have. Anyway, thanks for reading and commenting.
Dear Mr. GoTo:
I just discovered your website/blog, and I take it for what it’s worth: a place where you write and share YOUR experiences with pre-retirement. Your articles are not going to reflect every person’s situation in pre-retirement, any more than all the gloom and doom articles reflect every person’s situation.
I have enjoyed what you’ve written, and as with any other site, take what I need and leave the rest.
Whatever our varied financial situations, we all face a variety of issues and concerns as we approach retirement — a status that, for some of us, has come sooner in this economy.
I appreciate what you write and what you share. Thank you.
I also read that article which you cite in your own blog, and I saw what you, and the article, were getting at.
I agree with your reader that whatever our parents do with their money is their own business and an inheritance is not an entitlement; however, I also have seen firsthand that some people who have modest funds to last them throughout their own retirement years may be squandering their funds, with their own entitlement mentality: that their kids, or the government, are going to take care of them.
I suppose that’s why long-term care insurance and annuities are becoming so popular.
At the bottom of all this, is, I guess, the sad fact that parents and kids may not spend enough time with each other, and parents can use money either to bribe the kids to come around or to ‘buy’ the companionship they don’t otherwise obtain.
Mr. Go To,
As more and more Americans come down a few notches in their own financial lives, they are going to hate and despise anyone who is above them. How dare you own two homes! The nerve of you! Don’t you know in socialist/communist America, we can only own one home, it can only be 625 feet per 2 people and no one gets to have a water view unless they’re an endangered dolphin.
Sorry, dude. But your audience is going to shrink and shrink unless you start giving canasta lessons and double wide decorating tips because that’s about as affluent as the new Americans are going to get.
It’s called ‘wealth distribution’ courtesy of the Obamamaniacs.
My advice is to zip it, less’n ‘they’come to your home and start divying up your assets. Watch ‘Dr Zhaviago’ and you’ll understand.
If you have a good, loving relationship with your parents and your siblings then how ever your parents divide, desolve their estate will likely be fine with you, because you know then, care for them, and love them. But without the relationship, they could likely split it perfectly with you and your siblings, and give some to charity, and you will still find ways to see the division as unfair.
Parents and children, focus on the person not the money, and then the money doesn’t matter.
My wife has 2 other sisters and the relationship with their parents are tough for 2 of the three, and because of it we can already see issues with dealing with the estate. It is too bad, because with all the generosity of the parnets, its still going to end in a fight, because no one has a healthy relationship with ‘Dad’.
With a healthy relationship, no one would even care about the money. It is sad. Love each other and don’t worry about the money.
Blessings to all and their families.
Brian
Hey, if my parents want to spend all their money on vacations and second homes, that’s their perogative. But don’t expect me to bail you out later when you need to go to the nursing home or are disabled because you didn’t allocate funds for that rainy day.
How about when my parents spend their dollars helping my siblings build second homes and fancy vacations and not me simply because I don’t ask for a handout? Thats their business too. But once again, don’t come to me if you run into trouble down the road.
Kitty, I totally agree. Parents do play favorites too. For anyone reading this: long term insurance is a farce. You end up paying co pays, etc. Plus, with the new Health Bill, there won’t be long term care; people will be euthanized by death panels. Cancel your long term care ins. now; it’s a fraud!!