How to approach Expected Inheritance?

[luv2travel]

Hello. I'm curious how I should approach retirement planning when it comes to an expected future inheritance. Here's a little bit about me and my situation:

56 years old, Employed last 12 years at a job I'm no longer happy with. 60K salary.

Partnered (not married)

Current savings: $700,000 ($350K retirement accounts / $350 Brokerage, CDs)

Homeowner: $600K home w/ $190K left - My monthly expenses are fairly low. I've estimated my monthly bills at $2500/month - I split the household stuff with my partner, so my actual monthly out of pocket is much lower. (but we love to travel)

Now to the inheritance part. My father passed in 2021 and left a sizable estate (8M in stocks - he was a stockbroker and quite frugal) to my 83 year old mother, who is in excellent health and active. The 3 children split a checking account that he had valued around 1.2M

I'm really not happy with my current job and would much rather get something else part-time (with Health Insurance) where I have more interaction with people, lower stress and less WFH (suggestions welcome)

I guess I'd like to "Semi-Retire" and spend more free time on hobbies, golf, travel, volunteering, camping, etc., while still getting a paycheck and health insurance. If taking part-time employment of course my take home pay would be reduced. I have the idea of taking sensible monthly withdrawls (from my non retirement accounts) to make up the shortfall.

Curious what people in my situation would do.

Thank you.

 

[Flyfish1]

Just to clarify , the children are now able to split the 1.2M checking acct., and then you anticipate splitting an inheritance of 8M+, depending on how long your Mom lives and unknown care costs as she ages?
Or do you have to wait until your Mother passes until anything is received? Or do the kids only receive 1/3 each of the 1.2M?

I like planning ahead, always have, but your Mom is in good health at 83 and could live to 100+. So, you've got a bit of waiting to do. Also, do you absolutely know the situation when she passes. Are the kids the next to inherit or does all the money pass to a charity? Lots of questions.

 

[luv2travel]

Yes, that is correct, we have already gone thru probate on the checking account and have split that. Mom is living in my Dad's old (paid off) condo that the children now technically own. She lives off income from the stocks and other investments.

 

[Flyfish1]

So, did you pay the mortgage off yet? That would be number one for me.
Then, if you are certain that the final assets are split amongst the 3 kids you have to consider how much is left after your Mother passes which is very much unknown at this point. I wouldn't go crazy at this point.

 

[W2R]

Well, since you ask.....

I wouldn't count on anything, not one red cent, until it is all settled and I had all of the cash in my bank account.

I've heard too many tragic stories about inheritances that (for whatever reason) just didn't happen as expected. Those who weren't planning on them anyway, did fine. Some others did not.

I knew one unmarried couple in which he (and all his relatives and friends) expected he would receive an inheritance in the tens of millions from his very well-to-do, society parents. She, on the other hand, expected little to nothing for her own inheritance from her family due to various disagreements over the years.

Turned out that their fortunes were reversed; she got a substantial inheritance and he got zero. Life is that way, sometimes.

 

[Aerides]

You do nothing
You live your life as if there is no inheritance, until there actually is. You plan, earn, save, etc., as though it might never happen. Because it might not, or not for a very long time.

 

[luv2travel]

So, did you pay the mortgage off yet? That would be number one for me.
Then, if you are certain that the final assets are split amongst the 3 kids you have to consider how much is left after your Mother passes which is very much unknown at this point. I wouldn't go crazy at this point.

Yes, the condo is paid off. She also has pretty low overhead when it comes to expenses. We tend not to spend much as we were raised in a frugal household. The 3 kids are named as sole beneficiaries on the will. I agree about not going hog wild, but don't really see the sense in not starting to use some of my assets to begin working less and doing more of what I want to now.

To be perfectly honest - one of the reasons I'm posting this is one of the siblings (my brother, 59) passed away unexpectedly in May. The realization that life is short has hit me hard in the past few months and I want to make the best of what I have left in my life. I know nothing is guaranteed when it comes to the family assets, and I want my mother to live a long and happy life. Barring some unforeseen catastrophe with the family fortune, I know one day I'll have assets to comfortable live off for the rest of my life. I'm just looking for some candid advice if anyone has experience the same situation.

 

[disneysteve]

I agree with the "do nothing" sentiment.


Your mom is 83 and in good health. You're 56. Assume your mom lives to be 100, which is very possible. You'll be at least 73 before you see a penny of inheritance. You shouldn't do anything at all right now based on money you may or may not get until 3 or 5 or 10 or 15+ years from now. Just forget about it. It isn't yours to use yet and may not be for a long time.


If you can't afford to "semi-retire" on your own assets, you aren't ready to do so yet.

 

[GrayHare]

I'd not count on an inheritance, at least not yet, it's just too risky. After reaching eligibility age for Social Security, I might reevaluate that, and delay starting SS to save it as a backup in case the inheritance does not happen.

 

[Major Tom]

+1 to what W2R, Aerides, and disneysteve said. What they said is exactly what I was about to say. My general motto is "Hope for the best while planning for the worst."

As for what happened to your brother, for which I'm very sorry to hear, surely you can still have some fun and enjoyment of life while continuing to work? Continuing to work doesn't completely preclude you from having fun, does it? I bet you could do some enjoyable things with your share of the $1.2M from the checking account. If your job bothers you that much, can you find something else?

You're already in a fair position, with 700K in savings and a lot of equity in your house. Is your share of the $1.2M included in that 700K figure? If in your position, the only circumstances under which I'd consider semi-retiring, is if I could afford to do so whether or not I were ever to receive any future inheritances.

 

[Sunset]

I'm in the forget about inheritance side.

Reasons:
Mom could live a long life with last 10 years in nursing home which will suck away 1.5 Million.
Worse, she could re-marry some nice sweet caring man and leave it all to him, and he leaves it all to his lazy child.
Mom could get scammed out of the money.

If you count the inheritance and get it, well no big deal, but if you count it and don't get it, you are screwed !!

 

[CardsFan]

You do nothing
You live your life as if there is no inheritance, until there actually is. You plan, earn, save, etc., as though it might never happen. Because it might not, or not for a very long time.

^^This.

You can plan FOR an inheritance (like what will I do if it happens), but never plan ON an inheritance by spending down current assets.

There are a LOT of things that could happen in the next 10-15 years. You don't want to be 70yo asking your 97yo mom for money, do you?

 

[Car-Guy]

Agree, do nothing and don't plan on it. With 8m and 3 heirs it sounds like you'll eventually get something but it could easily be another decade+ and lot's of stuff can happen in that time. (I've had relatives live past 100)

Be thankful you got a 1/3 of the checking account.

 

[O2Bfree]

I agree with the general sentiment and reasoning here—plan as though you won't get an inheritance.

 

[Jerry1]

Well, since you ask.....

I wouldn't count on anything, not one red cent, until it is all settled and I had all of the cash in my bank account.

You do nothing
You live your life as if there is no inheritance, until there actually is. You plan, earn, save, etc., as though it might never happen. Because it might not, or not for a very long time.

And there you have your answer.

 

[Ronstar]

I'm with the "do nothing" group. Plan your retirement finances based solely on your own portfolio and your expenses.

Don't burn through your $ anticipating an inheritance. Your mother is 83. She could easily live another 10-15 years. If you get an inheritance after she passes, then you plan accordingly.

 

[MichaelB]

Well, since you ask.....

I wouldn't count on anything, not one red cent, until it is all settled and I had all of the cash in my bank account.

You do nothing
You live your life as if there is no inheritance, until there actually is. You plan, earn, save, etc., as though it might never happen. Because it might not, or not for a very long time.

I agree with the "do nothing" sentiment.

I agree with this.

 

[disneysteve]

I think the consensus is clear on the inheritance so I'll ask a different question.


Have the 3 of you discussed this with your mom at all? Any thought to her beginning to distribute at least some of the money during her lifetime? I'm guessing she doesn't need $8 million to maintain her lifestyle. The annual gift exclusion is $17,000/person and goes to $18,000 for 2024. It's not much relative to the total but she could give each of you 17K now and 18K next year and whatever the amount is in future years. If she wishes, she could also give the same amount to each of your spouses/partners and/or your kids. She could fund college savings plans if needed or help with buying cars or homes.


I don't know about your siblings' incomes but you said you earn 60K/yr currently so her giving you 18K/year would be pretty significant for you.


Just something to think about.

 

[Aerides]

The other questions to ask are long term care. Healthy 83 doesn't mean healthy or unassisted living at 93, but it does mean she probably has a good bit of living left.

Does she have any plans for a CCRC or assisted living or in-home care? Those don't generally cost $8m, but 10 years of any of the above could be a big chunk of it.

 

[dmpi]

Don't count on the inheritance. So much can happen. Life is unpredictable. If you get anything, just be thankful that you got something. I think you can still semi-retire but it'll be a challenge to get medical coverage with a part time job. If you don't want to work you can explore Obamacare for medical coverage until you turn 65.

 

[aaronc879]

You own a condo that your Mom(who is worth $8M) lives in for free? I would charge her around $10K/mo in rent. That'll cover your expenses until the inheritance comes in.

 

[Keim]

I am in similar position to OP. Very likely to get sizable inheritance in the next 10 to 15 years. Inheritance is not figured for planning purposes.

 

[Calico]

Yes, the condo is paid off. She also has pretty low overhead when it comes to expenses. We tend not to spend much as we were raised in a frugal household. The 3 kids are named as sole beneficiaries on the will. I agree about not going hog wild, but don't really see the sense in not starting to use some of my assets to begin working less and doing more of what I want to now.

To be perfectly honest - one of the reasons I'm posting this is one of the siblings (my brother, 59) passed away unexpectedly in May. The realization that life is short has hit me hard in the past few months and I want to make the best of what I have left in my life. I know nothing is guaranteed when it comes to the family assets, and I want my mother to live a long and happy life. Barring some unforeseen catastrophe with the family fortune, I [-]know[/-] think one day I'll have assets to comfortable live off for the rest of my life. I'm just looking for some candid advice if anyone has experience the same situation.

Fixed it for you.

I agree with all the other responses. There is a good reason for the expression "don't count your chickens before they hatch."

 

[SecondCor521]

OP has three different things going on:

1. Possible inheritance. I agree with the consensus - don't count on it.

2. Doesn't like their job. I would get a different job.

3. Life is short. I would find ways to have fun.

 

[RetiredAndLovingIt]

You own a condo that your Mom(who is worth $8M) lives in for free? I would charge her around $10K/mo in rent. That'll cover your expenses until the inheritance comes in.

I think mom lives in her own condo that's paid off. If not though, are you seriously suggesting that he should charge her 10K rent? I hope you're kidding but maybe not.

Update Okay I see where he said the 3 children are sole beneficiaries of the condo. That changes the situation but really would the siblings want to upset her by charging her rent? She could cut them all out of the will easily enough if she wanted and they'd lose a lot more in the long run.