As a parent of adults, I endorse this idea.
I do agree with others that the offspring would appreciate the help more when they’re in their 20s and 30s than when we die and they’re in their 50s or 60s.
100% agree. It makes me feel awful too because I don’t want them to worry about me but they do. They worked hard for 50 years or whatnot and being compensated pretty well now. But I haven’t done as great of a job at working hard as they have. I think I suffered from that “coddled generation” syndrome and I got used to feeling entitled and don’t realize how hard life is and how hard I should work to take care of myself.
I struggle now with a lot of mental/emotional/physical issues which has given me anxiety to work again. I have not worked for 2+ years and I get scared to even think about going back to another 9-5 job. I’ve been trying to find other means to earn some income and I do earn petty cash doing online selling but it’s hardly respectable and unreliable.
I absolutely do. I’m fairly Stoic in my life outlook. I have what I need and don’t really need anything more. Don’t care if someone gets something I don’t. I have enough.
No, and I said as much that I wouldn’t.
Another thing I thought about on the question of passing down inheritance to build wealth…what if you had a pretty wealthy and well-educated family for a few generations already and this scenario I thought of:
Great grandparents put money into a compound interest savings account and after 40 years of compound interest, they went from $1 to $700K.
Then they pass that down to grandparents generation and they put $300K into another compound interest savings account and after 40 years it comes out into a few million dollars. Then the parents generation takes those few millions and puts it into another compound interest savings for 40 years and it comes out as a hundred million.
Then my generation would put that into another compound …rinse and repeat this process and eventually you’d have a few billion dollars just for putting money into compound interest.
Of course, the last generation who decides they DON"T want to continue this trend and just use all the money and enjoy and hand nothing down, gets to glean and reap all the benefits whereas the previous generations that put in all the hard work and patience had wisely kept compounding it.
One of my kids has some similar issues about work. It gives me worry about what will happen when she doesn’t have us around. We’re helping her with expenses and putting extra away into retirement since we don’t really know what is in store for her future. We don’t mind at all. It’s a sacrifice we’re happy to make.We feel good about it since she does much better when she is financially stable. I expect it’s the same with your parents. One thing that makes it easier is that she’s generally good with money. We don’t have to worry about her blowing everything. If she has a solid nest egg, she’ll make it last and be fine. If your parents can see that they are helping you by keeping you in a safe financial place, they won’t see it as being as much of a sacrifice.
Communication matters. Giving more to the kid who has less money, or has more kids, or had special needs, or who cared for you when you became disabled is different from giving more money to the child you like more.
Similar quotes are often attributed to Warren Buffet.
Right. For almost any person who has significant wealth to leave to their children, there are almost certainly other children in the world who would benefit even more from the same amount of wealth. The right thing to do, from a utility maximizing perspective, would be to leave all their money to these needier children. And yet, that’s rarely what happens. Parents aren’t solely motivated by utility maximization.
My parents retired close to 20 years ago and I’m still telling them the same thing. I don’t want them to spend every dime and I’m hoping my siblings inherit a bit to stabilize their finances but I don’t want my parents to forego any joy or comfort to give us more money.
I have a modestly wealthy uncle who might be called a miser and the same will happen to me, I suspect. I invited him out to lunch not so long ago when I was visiting his town and he declined. He later asked my father if I was having money trouble. I suspect he thought I was going to hit him up for money, which was the furthest thing from my mind.
I had former clients for whom this was exactly their method of operation.
Commonly said but it’s not true. Does winning the lottery ruin the lives of winners?
I’m so sorry for your loss. That would be unimaginable to me.
I think if parents are leaving their estate to charities rather than their children, it is incumbent upon them to discuss their decision with their children rather than having it sprung upon them as a surprise.
Thinking about my siblings’ needs, I think they are better off getting a bit more money when they are close to retirement than they would have been to get the money when they were younger. In fact, my brother made some understandable but suboptimal spending decisions in his 30s. He would have made more such decisions if he’d had more money. If he gets a lump sum in the relatively near future, he will recognize his need to save it for retirement because there is no more of that money coming.
That you did. I guess I would ask you respectfully to consider why you wouldn’t do this. My own position is that while for the kids, it’s (of course!) always best to expect nothing and peacefully accept anything you get or don’t get, for the parents it can be a dick move to disinherit the kids, or treat them in a way they’ll perceive as arbitrary or unfair.
It’s possible to fuck up even quite decent kids by favoring some and disfavoring others without a pretty good reason, or by leaving your entire estate to the SPCA without a pretty good reason. With wealth, and the power to distribute it, comes responsibility. Unfortunately some people utterly shirk this responsibility, without any thought of the damages.
Absolutely! Don’t take my comments as advocating everyone needs to divide their estate exactly evenly. But as you divide your estate, carefully consider the effect of your actions, that’s all.
My grandfather disinherited one child, and gave less to his stepchildren (whom he’d raised since they were toddlers). It was definitely a dick move. Said disinherited child predeceased him, though, and his share went to a brother, so it ended up not mattering. The family fell apart over the will, but that was more because it brought the dysfunction to the surface than the cause of it.
Yes, that’s pretty much it. I don’t really need the inheritance, as I did a decent job of saving for my retirement. One decision that I need to make is whether or not to but long term care (LTC) insurance or not. With my own money, I think that I am just at the tipping point where self insuring LTC rather than buying a LTC policy is possible. With the inheritance, I believe that pushes me past that point where self insuring definitely makes sense. Of course, money is fungible, but I have the inheritance set aside from my own funds so I can say that yes, I am self insured and here is exactly where those funds are. It’s not anywhere near a million, but it’s invested and I expect that needing LTC is probably 25 years away, so it has time to grow. Basically, it’s just mentally segregating that money for a specific purpose. But it allows me some confidence that I am making the right decision not to buy LTC insurance.
Looking back, I realize that my real inheritance was the work ethic that my family instilled in me.
There’s nothing I really disagree with there, I don’t think. I most likely would lean towards an equitable distribution or nothing at all to anybody, but that would be based on how my kids are doing and what I think they might need. The most likely outcome is just 50-50. Easiest for me that way and I don’t particularly care what happens to my money when I’m gone. I personally don’t think I have any sort of expectation or requirement that in order to be a “good person” I need to do this, but I also don’t really care that much who considers me a “good person” as long as I’m happy with myself. Life is too short for me to care about what others think. Hence if my parents give all their money to my brother and say “you were an asshole, pulykamell, you don’t deserve anything,” I’m not going to lose a wink of sleep over it.
Wow. Your wife being a trust for your parents’ estate because you are an alcoholic really does seem like a recipe for disaster, with all the room there for bad feelings and resentment on both sides. I can see why they thought it would be better than giving him the estate outright (and maybe it was, if he would have used it to drink himself to death), but… I think it would be very hard to imagine a situation in which that turned out well.
Also, inheriting $40M while your sister gets $0 is just so completely ugh!
I could write a thesis in this thread, but I won’t. Too many family dramas best left like the proverbial sleeping dogs.
Suffice it to say I learned in early adolescence that inheritances are fickle things. They are not to be relied upon and the most prudent way to get along in this world is to rely on your own self-sufficiency. Don’t dwell on what’s “fair” in life. Or more pointedly, what’s not.
For a couple of years, I worked for an estate planning law firm. What an education that was, and I thought I’d already seen the worst of the worst!
There were two really important things I learned:
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It’s not what you say you’re going to do with your estate. It’s what you actually do. If you care about it, care enough to put it in writing and have it witnessed. Even a holistic will is better than nothing.
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Don’t try to control what happens to your estate beyond the grave as regards your family heirs. It almost never goes as you fantasized it would.
Not even legally, in many places around the world. Where I live, children automatically inherit their parents.
I find most replies in this thread really odd, especially when it comes to replies of the Zero Obligation kind by people with children.
Most of us have parents, too. And some of us have children who may not quite make it in their own. I don’t think i owe my son anything more than what I’ve already given him. I think i owe my daughter support. Maybe, if I’d raised her better, i wouldn’t.
When my mom gave away most of her assets prior to her death, i did ask her to give my share to my kids, as i didn’t think my husband and i needed it.
I am in this category. I plan to leave mine mostly to my nephew if my husband and mother both predecease me. Lord knows it’s pretty unlikely that my train wreck of a sister and brother-in-law will have anything to leave him. However, people in my family tend to live well into their 90s, and people in my husband’s family…don’t. So it’s pretty likely that I will need to pay for my own care for a pretty long time. Both of my grandmothers outlived their money (and their husbands). If my nephew inherits anything from me, I hope he puts it to good use.
Your first obligation, speaking as someone with some money to leave, is to yourself. But people shouldn’t assume that parents not blowing their money are scrimping for their kids. Chances are you have the money because you have good monetary habits. And, hookers and blow are a lot less appealing at 75 than 25. Ditto travel. I just got off a 11 hour plane ride and that kind of thing was a lot easier 40 years ago.
You do not set up an estate plan in a vacuum. Usually your kids are grown by the time you need to worry about it, so you can tell who needs the money and who will be responsible with the money. Neither of our kids need it, so I’m happy if the money goes into college funds for the grandkids so that they will start out their careers debt free. Both our kids are doing fine, but I can see giving more money to a kid who has money problems because they work for a nonprofit who does good things but doesn’t pay well.
You can also tell how your kids get along. We have a friend who was in a long battle with a sibling about a really big inheritance from his parents, or sibling and brother-in-law to be more exact. Lots of lawyer fees, lots of aggravation. But this was a problem that was not new.
We don’t feel an obligation to give money to our kids. We did feel an obligation to raise them well and let them leave college debt free. We’re giving them and our grandkids money because we love them. And because they can handle it.
Biologically, I think we’re hardwired to feel an imperitive to have our genes survive, and from that standpoint it makes sense to leave our wealth to the people we’re related to, especially our children.
Ethically, it depends on what ethical system you follow, but from a utilitarian perspective, as you say, we have a duty to do the greatest good for the greatest number of people, regardless of how closely related to us they are.
This whole thread has made me rethink my own will. As I explained above, we have three happy and reasonably successful children and they love us and they love each other. For 3 1/2 years we have been zooming together nearly every week. The sessions generally last about 2 hours and we are greatly cheered every week.
As said above, we had decided to share equally. But their situations are not equal. One son is wealthy, the other son and his wife have to earn upwards of $400K. Our daughter is not in that class but she and her husband have to make at least $200K. But the real problem is her husband’s family. Her husband is one of the kindest and most generous people I know. But let me tell you about the rest of the family. Father retired recently diagnosed with diabetes and does not take good care of himself. Living on social security basically, although their house is paid off. Mother is on dialysis. Sister has mental problems and lives with parents. Her divorced husband has custody of their child. But since she moved back home, she has made no effort to earn money. Finally, brother was born microcephalic and will require care his entire life. Right now that comes from the parents–he still lives at home–but that obviously won’t last forever. So I assume my son-in-law will eventually have to inherit the care of at least one, if not both of his siblings. And he will want to do it, given the kind of person he is.
I’ve been dipping into and out of the thread, so this may have been covered already by somebody above. If so I apologize.
A point @Voyager almost made 3 posts up.
If a person retires with a relatively large pension they may need little or no savings, and in fact may have accumulated rather little during their working life, yet still be comfortable and fully financially secure. This was quite common for government and union workers retiring in the 1960s and 1970s.
Someone with a comfortable retirement today will almost certainly have a relatively smaller pension component and need a larger personal savings / IRA / 401K component.
Which leads to a bimodal outcome. A person with a reasonable supply of retirement assets will have one of two things happen:
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They’ll spend too much too soon and/or experience shitty investment returns, and/or live a very long time, and will forced into scrimping mode followed by being broke or nearly so before they’re dead.
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They’ll underspend in early retirement and/or experience excellent investment returns, and by the time they’re e.g. 75, they cannot spend it as fast as it’s growing and they’ll die stupid rich (by their standards); far richer than they ever were while working. They only way they don’t get stupid rich is to die too soon so instead the kids get to be stupid rich (by the parent’s standards).
The problem is that nobody wants to end up in condition #1. So anyone not living paycheck to paycheck tends to oversave while working and underspend early in retirement until they’re certain they won’t get screwed. But by then it’s too late; they’re almost fore-ordained to end up in condition 2.
As a society that’s inefficient as hell. And one of the ways it’s inefficient is it leads to these big estates and inheritances the OP began this thread over.
If our society had a more effective way to insure against becoming broke before you’re dead, people wouldn’t need to save 3x or 4x as much as most of them turn out to need just to protect against that scary possibility. A possibility that usually doesn’t happen.