Anyone expecting an inheritance?

[laurence]

So I'm not making plans with it, but my Mom and Step-Dad have been great accumulators. Since there are only two of us kids on that side (both parents divorced and remarried), my brother and I may be looking at inheriting a large sum when they pass on. I know that's macabre, and certainly I want them to live long lives, but my mom had me in her 30's so there is a realistic posibility of seeing a cash infusion in my portfolio. At this point I've been urging my step-dad to retire, since they have more than enough, but he enjoys his work (college proffessor, department chair), it took him a while to get there so he wants to enjoy life at the top, so to speak. Plus he gets 4 months off a year so he feels he gets in all that he wants to do. This means their NW is going up every year, not down! Just using life expectancies, this could happen as early as my 50's.

I'm not super comfortable talking with them about it, it feels mercenary. They were better than average as parents so I don't want to seem eager for their death - that's just tacky! But I have to admit, it's crossed my mind I could inherit from them a sum greater than my entire NW to date when they pass. Part of me feels I should be able to factor in some value in this, in the sense that if I'm making a decision to retire at some point or work a few years longer to shore up the portfolio, I could let this tip the balance towards leaving early. I'm not trying to hurry them to their grave, really, but if I know my inheritance will cover the nursing home bills, it would be nice to get the campground membership a couple years earlier...thoughts?

 

[Khan]

Don't count an inheritance until the money is in the bank. Any number of things could happen.

 

[laurence]

Yeah, it's absolutely true. If I could count on it 100%, I could stop saving now! I'm not saying they have huge assets, but they own several peice of CA real estate with no mortgage.

 

[wabmester]

They told me that when one of them dies, the other will marry a 21-year-old, so I'm out.

 

[laurence]

They told me that when one of them dies, the other will marry a 21-year-old, so I'm out.

Dang! I bet they cook their own meals! "Honey, what's that bitter almond taste in the pasta?" "Oh, nothing dear, eat up while I go through this catalog on eastern european gigilos...".

 

[Meadbh]

Lawrence, don't count your chickens.....
They could (a) run off with an Anna Nicole Smith clone; (b) choose VERY expensive nursing homes; (c) turn to gambling and lose it all; (d) decide they didn't really like you after all.........

 

[Andre1969]

I'm an only child, and on my Mom's side of the family, an only grandchild, so there's a chance that once all my elders have passed on, I could have quite a pile on my hands. But there's always a chance I could end up with nothing. After all, my grandma could run into some serious medical bills. My uncle (Mom's brother) had a kidney transplant back in the 80's and will soon need another, so I'm sure that could easily drain the finances. And if my Mom kicks off before my stepdad, I dunno how his will is set up.

Basically, I'm not banking on any of it, because there's just too much that can happen. Plus, I have more saved up than my grandmother right now, and my investments will only go up. Hers are more in a holding/preservation pattern. My uncle is still accumulating with his 401k/IRAs, etc, but I'm well ahead of him, too. As for my Mom & stepdad, I have no idea about their financial situation, but I think I might have more saved up than them, as well. However, they will be getting nice pensions when they retire, and have a lot of money tied up in two houses and a parcel of land. And God-only-knows how big of a mortgage!

 

[SecondCor521]

I am in a similar situation. I think the big wild card is end of life health care expenses. I doubt any here would be so mercenary (or guiltless) as to deny their parents whatever medical care they need to ensure a long, happy, healthy, pain-free life in order to pad their inheritance.

I also wouldn't take my parents' current health as a good omen. Without going into details, it's really easy for a parent to get a really expensive disease, and good nursing homes and such are quite expensive.

I am too risk-averse to use a potential inheritance as a FIRE asset. However, depending on how things turn out, I may be in an awkward position of achieving FI by my parents passing away. I haven't decided how I'm going to handle that yet.

2Cor521

 

[maddythebeagle]

I suspect there are enough out there with parents like JG that will get a revolver and massive credit card debt.

 

[laurence]

Yeah, life has no certainties. I have planned as if I'm getting zero, it was just a random thought that popped in my head after noticing how much higher my SWR is when my portfolio only has to survive 15 years, not 40!

 

[Lazarus]

I expect nothing. Thats the best plan. At best if I inherit anything it will not change much. My parents are not rich. I hope they live a long time and spend it all.

 

[Peaceful_Warrior]

I know that my parents are planning on inheritance as they've made me executor of the will and discussed with me already many of their plans. At first, I felt very uncomfortable with these discussions... as a 20-something year old, I didn't want to be discussing their deaths and the financial aspects.

However, given several family members have died unexpectedly early, he keeps modifying/adjusting his will to cover more and more situations. And of course, each time we talk about the changes.

So depending on their end-of-life health situation, there may be an inheritance headed my way. However, since it would be split several ways between kids/grandkids, it would probably be a few hundred thousand. Enough to make a significant difference, but not enough to retire on.

Of course if we all really wanted to take advantage of parental deaths, we'd take out large life-insurance policies (if they could get insured) on them with us as beneficiaries.

 

[shiny]

I think a potential inheritance is something you should factor in. I mean, it doesn't sound like you are banking on it, but it is something that is more likely than not going to happen.

I will most likely receive money from my folks, but they had me young, so it will be a while. Then again, we are probably going to have to help out DH's mom more as she grows older, so its probably a wash for us!

Another thing specific to your situation is Tori. I know you talked in the past about setting up a trust. It seems like that is something grandparents would like to get in on and that would definitely factor into you financial planning.

 

[Ed_The_Gypsy]

DW's surviving parent is living on the old family homestead. We hope that the equity can be realized to provide for long-term care when needed.

We are not even thinking about inheritance. The whole place could very well be given to the church.

 

[shiny]

Of course if we all really wanted to take advantage of parental deaths, we'd take out large life-insurance policies (if they could get insured) on them with us as beneficiaries.

If any of our parents are thinking of cashing out their whole life policies, it would be worthwhile to investigate taking over it. My dad knows to let me have the option to buy him out and take over his policy before he cashes out - he would be happier for me to have the money than the insurance co.

 

[laurence]

Shiny, that's a really good point. I would be happy to just have whatever they leave upon death go through a trust to my kids especially Tori and skip me altogether. As noble as that sounds, it's really just pragmatic since I would be factoring that cost in anyway. They are coming down this weekend ( step-dad's mom flew out from Indiana and wants to see her great-granddaughter). If my mom brings it up ( she does from time to time ) I'll mention this thought. Thanks!

(I'm really not a gold digger, mom tried to give me 10 grand to help with graduate school and I told her to spend it on herself and refused to take it. I want them to drink margaritas for the next 30 years and if anything is left when they are done having fun, that's fine. )

 

[Khan]

Just an anecdote:

My aunt was born in 1909, she never married or had kids. She had a long career as a nurse (including a stint as an Army nurse in WW2).

She saved up a fair amount of money for retirement. She and my sister had a close relationship and she wanted to leave everything to my sister.

Over the years, my sister received papers to sign and have notarized.

She lived to 89, going from independent living to assisted living.

My sister's inheritance was one cardboard box of papers and photographs.

Towards the end, my sister and my mother were sending money to my aunt and her caretaker.

My sister is not at all bitter or disappointed, but it is a good thing she did not base any plans on that inheritance.
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I have read that this is becoming common among the Baby Boomer parents; as they live much longer lives with more medical interventions.

 

[Outtahere]

I'm not planning on any thing coming from my parents. I hope they live long happy lives and spend what ever they've saved. If there is something left then fine but the last thing I want them to do save it for us kids, I want them to enjoy it. I'm doing all my planning based on this but I know other siblings that are counting on it, I have a feeling they will be very disappointed.

 

[bssc]

My mother's grandparents lived to be 94 and 101 so I suspect that there is a good chance that my meditating, organic eating, vitamin popping mother will probably live that long if not longer giving the advances in medicine, even if she does take up sky diving when she hits 80.

 

[Sandy]

As has been said, best not to count on it. My mother had a friend w/o kids and she explicity stated that my brother and I would inherit. But she passed first and he moved on. Last I knew he was linked up with someome at least 35 years younger and spending his $$ like crazy.

 

[SteveR]

I take care of my mother's finances so I know what is in the accounts. My brother and I will likely inherit very little. I don't need it and don't count on it. I keep telling her to spend what she wants but she is a Depression child and can't seem to enjoy what little life she has left. Each penny has to be pinched until it is flat. I can't change how she feels. I can only tell her it is OK to spend some on herself. Take a cab; buy some new clothes; go out to eat. But she is set in her ways and feels she will be broke next week. I am making sure she will be fine for as long as she lives but even that does not console her.

The worst thing to me would be to live to 100 and look back on my life and say ...."I wish I had done......"

 

[peggy]

I'm an only child. I'm exectrix of my Mom's will and she consults me on financial matters in general.

We've discussed the topic fairly often, with me saying, "Enjoy your life. I don't want your money." She turns around and says, "I am enjoying my life, and I want to leave you something."

She has an insanely good LTC policy that she bought ten years ago or more -- I don't recall all the details, but we've been told on more than one occasion that LTC policies don't come that good anymore. So her health care expenses should be covered.

So yes, I am expecting an inheritance, despite my repeated assurances that DH and I are well on our way to having our own finances set for life. Of course, I hope that the day it comes is a LONG time in the future, and because I don't know exactly when it will happen, I'm not factoring it into our calculations for FI/RE, other than to say that we'll be FI when it comes, if not before.

 

[Nords]

I would be happy to just have whatever they leave upon death go through a trust to my kids especially Tori and skip me altogether. As noble as that sounds, it's really just pragmatic since I would be factoring that cost in anyway.

Yep-- think about where you'll be 30-40 years from now and imagine inheriting in your 60s-70s. Hopefully there won't be any point to a bequest!

My father disclaimed his father's bequest, what was left of it after 14 years of full-term care. I suspect we'll be doing the same someday, again assuming there's anything left to assume over.

Dumb question for the lawyers-- does a disclaimer specifically have to be written into a will, or can the beneficiary disclaim their bequests and yet still control to whom the disclaimed assets go? The significance of this question is that we'd have to have a discussion with our parents about putting disclaimer provisions in their own estate plans...

 

[kaudrey]

Hi Laurence,

My sister and I are the heirs of both my parents and one aunt (no kids). I am the executor of both estates.

We always tell them all to spend their money, that we hope they live to be 100 and healthy and use it all. But they won't. They all enjoy their lives, but are true LBYMers.

The unknown, as everyone says, is long term health care. My family mostly has a history of being healthy until the mid 80s and then going quickly, but one grandmother spent 13 years in a nursing home with Alzheimer's and didn't have anything left.

It is likely that we will get something. But it is also likely that I will retire before that happens. I hope that is the case, because they'll be 85 when I plan to retire in 15 years. So I want my numbers to work on their own, either way.

 

[SecondCor521]

Yep-- think about where you'll be 30-40 years from now and imagine inheriting in your 60s-70s. Hopefully there won't be any point to a bequest!

My father disclaimed his father's bequest, what was left of it after 14 years of full-term care. I suspect we'll be doing the same someday, again assuming there's anything left to assume over.

Dumb question for the lawyers-- does a disclaimer specifically have to be written into a will, or can the beneficiary disclaim their bequests and yet still control to whom the disclaimed assets go? The significance of this question is that we'd have to have a discussion with our parents about putting disclaimer provisions in their own estate plans...

IANAL, but my understanding is that if you disclaim a bequest, it essentially nullifies that clause in the will as though you had predeceased the author of the will. The property would then go to the next thing/person down the list. You can't "control" where the assets go except if you know what the will says you can figure out what happens whether or not you disclaim. In this case it does not need to be in the will.

I did a little bit of legal research using that acme of legal authority wikipedia, because I wondered what happened if the residuary taker disclaims and discovered that the government gets it in that case. They have a pretty decent article on disclaimers at http://en.wikipedia.org/wiki/Disclaimer_of_interest

2Cor521