Anyone expecting an inheritance?

[mickeyd]

I have read in various places that boomers are in line to inherit over a trillion dollars over the next 20 years. I hope you get your share.

When my dad died a few years ago I received $8400 (1/5 th share) from his estate. I was happy to receive it and used it to make repairs on my house. I often think of him when I admire my still-spiffy-looking house. To be honest, I was surprised that he left anything at all to us, as he was retired on only SS and a little savings.

My MIL is in her 80's and has invested well and often in GE stock so I guess DW will be in line for 1/4 share in her estate when the times come. We are not planning on receiving anything (actually DW and I have never discussed it so she may have other ideas) from her so whatever we get will be considered a windfall as far as I am concerned.

 

[lazygood4nothinbum]

dad came from a family of fortune & fame but i'll not see a cent of that. his father had a house on the water in south florida way back when. only met that grandfather twice that i remember. don't even know if my own father is dead or alive. though i learned recently that when my parents divorced my long-estranged grandfather called to ask my mother if there was anything we needed. so i guess that's nice.

my wonderful stepfather, who i refer to as the ol'man, came from a very successful construction family but anything he inherited went to his first wife, as he left her with nothing but the clothes on his back.

mom never inherited from her father because my evil step-grandmother--may she rot in hell--changed grandpa's will while he was influenced by alzheimer's. she had feigned love for our family for many years though it was mostly only mom & i who were fooled. the last thing she said to me was "you only loved me because i used to sneak dollar bills into your hand when you were a child." i left and never turned back.

then about a two years after grandpa died and a year after chasing me out of her life, she remarried. a great aunt of mine for some unknown reason stayed in touch with her. after a visit, my aunt reported back to us that the evil one was all beaten up, black and blue. supposedly she fell. but i wonder if she finally didn't find the family she deserved. anyway, a few years back out of curiosity i checked county records. seems the wife beater's kids have all my grandfather's money.

my mother wanted me to know that i would be inheriting and she discussed it early on when we started dealing with her own alzheimer's. this money was included in my retirement plan, not that she ever thought i'd retire early, but in that i didn't have to worry about retirement and so i was free to stick around, to help her through her ordeal and to continue for at least a few more years to being momma's little boy.

i'm pretty sure had she known about er she'd have put that money in trust to keep me working. but then i'd never known about er myself. i didn't even consider it until i got so damned depressed with how badly things got at work and in my personal life. but by then i was guardian of mom and her estate as well as executor of the will. so at that time i felt pretty comfortable putting those numbers into firecalc.

laurence, it is completely natural for you to be considering future inheritance. it isn't goulish or greedy at all. for me--and i've experienced it from numerous vantage (& disadvantage) points--it is another connection to family. we all want our parents to last for ever but, fact is, they don't. they die instead, leaving us behind. we want them to leave us something tangible, something we can hold onto--a watch to wear, a ring, an old coat to hug, a sweater to sniff--we want to know that we were remembered. better we are left with money.

sounds to me like you can plan on inheritance and, depending on how close & open you are with your parents, i don't see why this can not be openly discussed. sounds to me like you will have plenty for you, for your little red sports car and to secure your children's good future.

 

[W2R]

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?

Laurence, I will be inheriting but like you, I am not eager to do so since I would really hate to lose my mother; a sweet, dear lady though 97 years old by now.

I am NOT counting on my inheritance for ER. Who knows what could happen (though I have no reason to think this would not go smoothly, and I probably have more reason to be sure of my inheritance than most people). I am accumulating a sufficient nestegg to live a simple but happy, and not completely barebones, lifestyle on my own with plenty of safety nets built into my plan.

If/when I inherit, I will transition into "Plan B". My nestegg will instantly increase by a minimum of about 400%. At that point, I do not plan to get into the principal though maybe I will spend a little of the earnings for a little less simple lifestyle. The rest I would re-invest. In several decades, when I am truly elderly, I am sure I can/would spend some of my inheritance on a very fine continuous care facility instead of a barely adequate one that I could otherwise afford.

In a little over two and a half years, I will qualify for lifetime medical and I plan to work at least that long even if I do inherit. I doubt I will work more than a year longer than that, even if I don't inherit. So, my timeframe for ER is already determined by factors more relevant than any inheritance.

Right now, I endeavor to learn as much about handling large sums of money as I can. This coincides nicely with retirement preparations since even a normal nestegg is pretty doggone large compared with what I have had previously in life!

My companion Frank is in a similar situation, though his inheritance is less certain than mine and potentially tremendously large. He is not including it in his planning either, nor is he looking forward to his parent's death. As far as the money goes, he says, "If you don't expect something, you aren't disappointed when you don't get it".

 

[HFWR]

Uh, no...

 

[Moemg]

By inheritance do you consider the barcolounger that moves you from a seating to a standing position that I'll probably inherit from my Mom .I haven't really factored that into my net worth . Should I ??

 

[bostonjoe]

Hello all...first timer. I discovered this forum yesterday and got jazzed up.

I came from a set of parents who always maintained a negative net worth (we were really poor!).
My wifes parents, on the other hand, were both very successful and generous. Although my wife stands to inherit a handsome sum some day (assuming the market doesn't crash and my dear mother-in-law doesn't need extended medical care), I am struggling to maintain a plan which does not include this windfall. It is difficult to not think about it but what a bowl of gravy it would be if we are independently successful at reaching ER on our own.

 

[MikeD]

Mmm, gravy.

Mike D.

 

[Khan]

A coworker told a story of inheritance. His grandmother was in a care facility of some sort and changed her will to leave half to the hairdresser who visited there. It was $1 million or so.

He had apparently been doing this with other old women and had received small amounts; this one was the jackpot.

 

[bostonjoe]

hair-dressing school...hmmmmm

 

[laurence]

So my parents and grandmother and aunt came down today to visit Tori (oh yeah, and us too) and I just couldn't bring it up. Maybe I'll just send an email detailing our special needs trust idea. We took them to a fancy italian place and then they wouldn't let us pay - if I knew that I wouldn't have gone some place so expensive. It is nice that we've gotten through all our battles and issues, everyone's health is pretty good, and we are all happy with each other. Tori helped. 100 miles of seperation helps, too.

 

[shiny]

So my parents and grandmother and aunt came down today to visit Tori (oh yeah, and us too) and I just couldn't bring it up. Maybe I'll just send an email detailing our special needs trust idea.

You'll know when the time is right. I never bring up inheritence/will issues with my parents, but they sometimes bring it up with me... maybe if your parents do the same you will mention the trust and what you are thinking. Then they will probably say they want to help with that too and it will be "their idea" and work best for everyone. It would probably give them some peace-of-mind knowing that Tori's future is being planned for.

 

[farmerEd]

I am curious about inheritances and how they work...my parents will leave me nothing, except maybe the bill from the undertaker, but my wifes folks may leave us a meager amount ($100K or so)...not enough to be overly concerned about...but, I am curious if one receives an inheritance, does the "income" need to be reported anyplace?

In particular, I am planning ahead for college expenses for my 4 kids(10 years away)...I can do all the planning I want, keep money sheltered in home equity and tax-sheltered accounts, but if 2 months before I fill out the FAFSA application a $100K chunk of change falls into my checking account its going to significantly change the need profile. Could you quickly spend the money? can you time the actual distribution of the money from the estate? Just curious what ones options wold be...it may be a mute point when the time comes anyway, and we may not qualify for aid in either case, but its nice to plan these things or at least know what the implications are.

 

[ladelfina]

Yes. But I didn't put it into FireCalc.

I liked Helen's response:

Inheritance is such a bitter sweet thing. Oddly I think knowing that I will inheritant a large chunk of change is what is motivating me with a fever to reach FI. The only way I can accept the money without guilt is proving to myself that I don't need it. And, I feel they handed me so much in life by paying for my education and being such good parents. I have a need to reach FI without a gift from my folks.

I really, really wish they had spent more of their money while they were young and healthy.

My parents have/had been a bit schizophrenic in talking to us kids about money. Like it was "there" but "not there" at the same time, which confounded me in the past, but in retrospect I understand and appreciate that tack. When I was in my 20's my father handed over control of a decent, but not overwhelming, sum which had started out under the UGMA. So I always knew I had a bit of a cushion that others didn't necessarily have, but it wasn't enough to live off of by a long shot. Fast-forward 20 years and what with work, a favorable RE market, and decently-performing investments here I am.

In the past I haven't always been super-frugal, but I "never touched principal"... My parent's LBYM ways have mostly stuck.. and I got addicted to that early feeling of independence.. independence from debt.. knowing that if I got fired or, later, if my business went under, I wouldn't starve, at least for a while. I was determined never to lose that feeling of being safely away from the edge!!

Now mom is doing ok for now on her own, but is not in the best of health. We visited a super-nice LTC place near sis, but she seems to have decided to stay in her own home as long as possible (I'd be happier if she spent the $$ on the LTC). I keep wondering how much of that decision has to do with wanting to preserve the egg for us, instead of using it to make her own life easier. I tell her that we are doing fine, and that we fortunately don't need her cash, but I'm not sure how much of that is getting through. She seems to be making the decision based on her current comfort level and independence, plus not leaving the neighborhood, friends, and doctors she knows, plus there's the initialization hump of moving to a new state which means new lawyer, new will, new DL, new insurance. She said she just doesn't want to deal with all that... understandable... but if I'm left with the feeling that's she's doing it to save $$ for us in the long run, I will feel guilty.. like it's 'blood money'.. even though that's not rational since it's her free choice.

We are talking about a woman who, when my dad bought her a fur coat in the '70s, insisted on buying two "so that you each could have one" when she died. When my dad bought her a ring, she chose one with 2 sapphires encircled by small diamonds "so that you can add a couple of diamonds and make two rings". That's her mentality.

So, yes, I'm counting on some inheritance (there's a pass-through trust from my dad that sis & I will split -- we are in the dark as to the amount) but frankly, I hope that my mom feels free to use her stash to make her own life more comfortable...

Strangely, she worries constantly about taxes, in particular inheritance taxes, though even back when the limits were lower we weren't talking about a horrendous sum.. maybe $50-60k. She was once talking about moving to Florida just so we could save that $50k later on?!??! Arggh. In the meantime, she could be gifting out, what is it now?.. $12k p.a. each to both of us and our DHs, and I assume to my sister's kids.. But she restricts it to some portion of that to me and sis.. there's a block about gifting to our husbands.. I mentioned this tax-avoidance discrepancy in passing when we were on the subject, but it let it drop since I didn't want to look greedy (plus I got a glaring look!). Earth to mom: DH and I have a joint account.. cough it up!! (kidding!)

Wierdly, too.. she appears to be living mostly on the proceeds of the pass-through trust, while her taxable $$ grows (slowly, since she's probably in mostly treasuries and muni bonds). Nor do I think she examines the trust performance, just accepts what the bank (trustee) portions out. Whaddaya gonna do?

OldMcD: $100k = "meager" But that's the median net worth of an American family, it seems.. so... all in all, nothing to sneeze at. As far as the IRS is concerned you don't report it since the taxes are the responsibility of the estate. You could in theory spend the money to keep it off what you're obliged to report to the financial aid people, but since they do look at big ticket assets like cars and real estate, I don't know how much that will help.. maybe buy a boat? You'd have to review the particular application's forms to see what they ask.

 

[donheff]

I am curious about inheritances and how they work...my parents will leave me nothing, except maybe the bill from the undertaker, but my wifes folks may leave us a meager amount ($100K or so)...not enough to be overly concerned about...but, I am curious if one receives an inheritance, does the "income" need to be reported anyplace?

The money will pass to the heirs tax free up to the estate tax limitation - far above that level. If any of it has capital gains due, the value will be "stepped up" to current market value so when you sell you will not owe cap gains on the rise during their ownership.

 

[mickeyd]

Hey bostonjoe,

I am struggling to maintain a plan which does not include this windfall.

Assuming that you or the spouse will end up with a windfall inheritance, and integrating that assumption into ones financial plan is pure folly. IMHO, you should NEVER assume that you will get anything from your departed loved ones.

It should always be a windfall, and a happy one at that.

 

[bostonjoe]

Yeah, I said I was struggling but I'm winning the battle. Although I can from time to time go off daydreaming about the possibilities, I save all I can. In fact I just shifted a 4% raise to my 401k, maxing out the annual deduction allowed.
Wasn't I supposed to buy a bigger TV or something? I'd hate to slow down the economy.

 

[youbet]

A coworker told a story of inheritance. His grandmother was in a care facility of some sort and changed her will to leave half to the hairdresser who visited there. It was $1 million or so.

He had apparently been doing this with other old women and had received small amounts; this one was the jackpot.

So....... in some cases it might pay to visit grandma in the care facility from time to time? Kids who assume gramdma's or mom's or whoever's will is locked in and they are going to get the big bux despite not really liking grandma or mom or whoever and never visiting just might get disappointed! It is so funny.........

 

[ziggy29]

Yes, I should receive a portion of mom's estate when she passes. Hopefully I won't get it for a long time. Right now my share would probably come to about $100K. I do not include this in my financial planning anywhere, nor do I want it any time soon.

 

[lazygood4nothinbum]

I am planning ahead for college expenses for my 4 kids(10 years away)...I can do all the planning I want, keep money sheltered in home equity and tax-sheltered accounts, but if 2 months before I fill out the FAFSA application a $100K chunk of change falls into my checking account its going to significantly change the need profile.

dead people are soooo rude. they always pick the most inconvenient time to die. the really thoughtless ones die and leave you a house to sell right when housing turns bad. talk about poor market timing.

never mind that they have the nerve to die while i'm still alive. it's like someone walking away from you while you are in the middle of a conversation. this is why when people die, the first place they go is charm school to learn some manners.

but you bring up a good point that i didn't consider and have a call into uncle accountant as i'm typing this. at what point do i become responsible for taxes paid on interest accrued since i inherited, even though we are still in probate on part of the estate. because basically, at death, it became mine.

edit: just heard back from uncle. basically, i am only responsible for taxes as items are put in my name. the estate pays taxes up until then. so it sounds like as soon as that $100k is put in your name, it and all the good & bad that goes along with that is yours.

as an example. for now, i only owe taxes on interest paid from the insurance policy which i already collected . i do not owe, of course, on the ira where i only pay taxes when i withdraw funds. but also i don't owe any 2006 taxes on non-ira funds which are still in probate. rather the estate will pay taxes on that.

 

[ladelfina]

dead people are soooo rude. they always pick the most inconvenient time to die. the really thoughtless ones die and leave you a house to sell right when housing turns bad. talk about poor market timing.

: : :

You're so right, LG4NB.. At the end of my msg. I had written "buy a boat or just do the right thing and fund your kid's education with the $100k.." but I erased it, not wanting to offend. Rethinking it, I'M offended that anyone who thinks $100k is "meager" is even applying for financial aid!

Very interesting about the interest and tax obligations while the estate is in limbo.
I wonder how long the average estate takes to settle among the different states.. in an 'average' case where there are decent assets but nothing complicated: house & accounts, valid will, no business, no contestations...

 

[chinaco]

Maybe... but not counting on it. If and/or when it happens, it will be gravy... Since we will be able to manage comfortably with out it, (if it happens) we will probably use it for some extravagance that we might not normally purchase. By that I mean some form of leisure item (where part of the expense can be recovered). For example a vacation home or a boat (used of course). Or we might just travel "in style".

My philosophy is that when I get really old (hopefully healthy) I will likely be spending much less (because we will slow down), so I want to enjoy myself as much as I can while I am younger (and healthy) without jeopardizing my old age life style. I have observed my parents and other relatives as they age and pass on... there are lessons to be learned from those experiences!

The only things lurking out there (in the far future) are death, poor health and possibly a nursing home. So........... Carpe Deim

 

[Moemg]

[

Very interesting about the interest and tax obligations while the estate is in limbo.
I wonder how long the average estate takes to settle among the different states.. in an 'average' case where there are decent assets but nothing complicated: house & accounts, valid will, no business, no contestations...
[/quote]

My late husbands estate took three years to settle.I now know the value of trusts .

 

[BarbaraAnne]

My mother's estate took about 4 weeks to settle. All of her assets were in CD's or treasuries. My parents (several years before my father's death) had done the necessary preparations (wills, living wills, etc) so as not to burden family members. They had sold their home previously so there was no property to sell. When everything is in place and the assets are cash equivilents it is easy, fast and inexpensive to settle an estate. It was fortunate that it was all set up before my mother developed alzheimers. I can appreciate how difficult it is for lazyg4nb to deal with his mom's estate after taking care of her during her long illness...my sincerest sympathies.

 

[lazygood4nothinbum]

I wonder how long the average estate takes to settle among the different states.. in an 'average' case where there are decent assets but nothing complicated: house & accounts, valid will, no business, no contestations...

everything previously put into order here & as written into mom's will, anyone contesting the will should be "considered to have predeceased me", not that there'd have been any of that in any case as my brother & i are in complete.

probate ends late march so the settlement will have taken about 6 months and cost between $10-20k. house inherited in bad market (how rude), my guess is a year to sell. (though surprised already getting inquiries from developers.)

... before my mother developed alzheimers. I can appreciate how difficult it is for lazyg4nb to deal with his mom's estate after taking care of her during her long illness...my sincerest sympathies.

thanx barbaraanne and likewise. i very much am looking foward to having this done with so that i will be better able to move on. i've only even been to the house about twice since mom died. i don't know how people keep a house in their family for consecutive generations. we had so many good times there. for me it is too sad.

i remember when my best buddy died and it was six months to a year before i went near the intracoastal waterway even though it is just blocks away. i didn't even realize i was avoiding it until one day i found myself going over one of the bridges to a1a. that area was our playground for so many years and my heart skipped a beat when i realized i hadn't been there since his death. i'm way too emotional for this crap.

this is why i really just have to turn my life into one big ol' happy party. much better to go through life laughing than crying. this crying stuff sucks.

 

[laurence]

In many ways my daughter is a blessing. Alzheimers and other debilitating conditions can be so heart wrenching. Down Syndrome, more specifically the gene that carries it is often called the Sunshine Gene, because in there way they understand their world, can relate to it, and enjoy it immensely.

My mother suggested it might be best Tori not get heart surgery when she was first born ( implicating it might be best she not live at all than live like that). Now my mom - staunch athiest that she is (was?)- is saying crazy things like Down Syndrome kids bring are here to bring light into the world. Amazing.