Poll: Should Beneficiaries Know Of Their Inheritance Well in Advance?

[GravitySucks]

I just married a man with an adult son. Husband was divorced for many years, never expected to remarry (surprise!), and son was always told he would inherit whatever was left.

I recommended husband put his premarital assets in a revocable trust, with son as successor trustee, which he is in the process of doing. Keeps me out of the whole business, which is what I want. All I want is his wedding ring, which was my previous husband's, and is freighted with memories. It will be mentioned specifically in the trust.

Congrats!

 

[livingalmostlarge]

So i am an only child and my mom is now widowed. I know everything, considering the fact I pay her bills, file her taxes and pay them, manage her investments I doubt she's got much to say other than i want $x whenever she wants. I also managed to get it out from raymond james.

My kids get everything 50/50 but I hope it's 20 year from now and my mom lives to 94. knock on wood i think it'll happen. I'm pretty certain there will be money for the kids and it will be 7 figures each. It will also happen I think before they turn 40 (yay if she lives another 25 years and it could happen). I've already told the kids you get everything from GMA.

I haven't told them the number yet, but I'm thinking if she makes it to them turning 21 I will. They know she's got a home and condo in hawaii. They know she visits us monthly. They know she is taking them on a gma gkid trip anywhere in the world no matter the cost. They know she travels with us anywhere, anytime now. She's been to asia over 60 times and europe 2x, and all over the usa. She still travels solo on tours.

I'm pretty sure the kids at 15 and 13 know she's comfortable. But I think it's too much of an inheritance to leave it to "oh suprise" you are inheriting $2m-3m each. My DK2 and her are going on the hawaii cruise in april and my kiddo was like I want to go with you GMA. She's like okay.

As for me and DH we will also have a conversation with them from us. Ours will be substantial as well but we haven't decided anything yet. No we won't run out and it will be enough that it will be like a loaded gun I think if we don't discuss it with them. I'm trying already to gently explain stuff.

I feel like Shaq to his kids "i'm rich but you aren't." And that's how our money is. We're rich and they aren't. And I tell my kids that. I'm not sure they will inherit anything but we'll see. I hope that it doesn't ruin them and I'm not sure they get everything. But there are a lot of years and lot things that can happen.

I mean is it any different than having the conversation about affording college? I flat out told our DK1 this how much we have. Here is the account. This is what it costs to got to X, Y, and Z. You have this much and we will cover the rest.

According to the college cost webinar I watched 2 weeks ago they said you should be telling your kids what you can afford by Junior Year of high school. You should have a FRANK discussion about bothering to even apply to schools you know don't give merit scholarships and you don't qualify for need based aid. The counselor said she wants to shake kids and parents who don't have the discussion but have it Spring senior year when the kid says "you are ruining my dream" And the parent she said should have said it a year before they even worked on the application.

Sometimes you have to be honest no matter how hard the truth is. So i figure inheritances work the same way as college. you probably need to tell your kids the truth.

 

[RetMD21]

......

I haven't told them the number yet, but I'm thinking if she makes it to them turning 21 I will. They know she's got a home and condo in hawaii. They know she visits us monthly. They know she is taking them on a gma gkid trip anywhere in the world no matter the cost. They know she travels with us anywhere, anytime now. She's been to asia over 60 times and europe 2x, and all over the usa. She still travels solo on tours.

I'm pretty sure the kids at 15 and 13 know she's comfortable. But I think it's too much of an inheritance to leave it to "oh suprise" you are inheriting $2m-3m each. My DK2 and her are going on the hawaii cruise in april and my kiddo was like I want to go with you GMA. She's like okay.
.....

So to avoid surprising them in perhaps 20 years at 33 and 35 you surprise them at 21? That's fine but we have preferred to be a little cryptic with the young adults. I think there is a potential to demotivate them.

 

[livingalmostlarge]

So to avoid surprising them in perhaps 20 years at 33 and 35 you surprise them at 21? That's fine but we have preferred to be a little cryptic with the young adults. I think there is a potential to demotivate them.

What happens if she doesn't make it for them to be 21?

I don't know the answer to any of it. I don't know you can know until you get to the point to decide and see what's happening. Maybe they get nothing if they are in a bad way. And yes that also can happen.

What happens if after the get it they turn to drug and alcohol abuse?

I don't think anything is guaranteed or easy or predicted. Lots can happen before and even after an inheritance

 

[Sunset]

So i am an only child and my mom is now widowed. I know everything, considering the fact I pay her bills, file her taxes and pay them, manage her investments I doubt she's got much to say other than i want $x whenever she wants. I also managed to get it out from raymond james.

My kids get everything 50/50 but I hope it's 20 year from now and my mom lives to 94. knock on wood i think it'll happen. I'm pretty certain there will be money for the kids and it will be 7 figures each. It will also happen I think before they turn 40 (yay if she lives another 25 years and it could happen). I've already told the kids you get everything from GMA.

I haven't told them the number yet, but I'm thinking if she makes it to them turning 21 I will. They know she's got a home and condo in hawaii. They know she visits us monthly. They know she is taking them on a gma gkid trip anywhere in the world no matter the cost. They know she travels with us anywhere, anytime now. She's been to asia over 60 times and europe 2x, and all over the usa. She still travels solo on tours.

I'm pretty sure the kids at 15 and 13 know she's comfortable. But I think it's too much of an inheritance to leave it to "oh suprise" you are inheriting $2m-3m each. My DK2 and her are going on the hawaii cruise in april and my kiddo was like I want to go with you GMA. She's like okay.

As for me and DH we will also have a conversation with them from us. Ours will be substantial as well but we haven't decided anything yet. No we won't run out and it will be enough that it will be like a loaded gun I think if we don't discuss it with them. I'm trying already to gently explain stuff.

I feel like Shaq to his kids "i'm rich but you aren't." And that's how our money is. We're rich and they aren't. And I tell my kids that. I'm not sure they will inherit anything but we'll see. I hope that it doesn't ruin them and I'm not sure they get everything. But there are a lot of years and lot things that can happen.

I mean is it any different than having the conversation about affording college? I flat out told our DK1 this how much we have. Here is the account. This is what it costs to got to X, Y, and Z. You have this much and we will cover the rest.

According to the college cost webinar I watched 2 weeks ago they said you should be telling your kids what you can afford by Junior Year of high school. You should have a FRANK discussion about bothering to even apply to schools you know don't give merit scholarships and you don't qualify for need based aid. The counselor said she wants to shake kids and parents who don't have the discussion but have it Spring senior year when the kid says "you are ruining my dream" And the parent she said should have said it a year before they even worked on the application.

Sometimes you have to be honest no matter how hard the truth is. So i figure inheritances work the same way as college. you probably need to tell your kids the truth.

Or your Parent gets married..... and the $$$$ all goes away to spouse, and the kids get zip. It happened earlier in the thread.

 

[marko]

I think there is a potential to demotivate them.

I think its the parent's responsibility to foster a healthy respect for money. Even in moderately wealthy families, off-hand dinner table comments on the Dow, interest rates and such can slowly educate young ones on the value, power and dangers of money.

Eventually they come to appreciate that a pile of cash is not for immediate spending but for "working for you while you sleep" (that had been my life-lesson at age 13).

At 8, I learned about "bank interest" when I got a baseball glove for "free" when I withdrew $5 from my bank account and ended up leaving the bank the same balance. Dad could've just bought me the glove but instead, an indelible lesson learned!

Knowing that someday there'd be extra money waiting for me allowed me to make better life decisions as a young man and increased my risk profile for the better.

Bonus points: the knowledge that there was money coming allowed me to better craft a more solid pre-nup, which did come in handy.

 

[marko]

Or your Parent gets married..... and the $$$$ all goes away to spouse, and the kids get zip. It happened earlier in the thread.

With large estates and generational wealth, I'd imagine that there's enough to go around and a responsible benefactor would take measures to insure that original children and grandchildren remain included in the estate. "Keep the wealth in the family" is often rule #1.

Wouldn't be the first time that crazy grandpa got a new wife but the kids still got their share. Actually, I've seen just the opposite where the kids get the money and new wife gets a percentage. Pre-nups.

 

[Amethyst]

I didn’t mean that at all? Sorry if I wasn’t clear. Our Trust is joint, I didn’t know it could be otherwise.

Husband and I have separate trusts because we don't share assets or children.

 

[Surewhitey]

DW's father remarried and she got it "all". Other than the hurt feelings of her step sisters getting the trailers and bayou land, she & 2 sisters were OK with it...

 

[splitwdw]

My executor has all my account information and passwords to access. I update this information with them when I change anything. They know approximately how much my estate is worth at present.
My nieces and nephews are my beneficiaries and they know it. They do not know what my estate is worth because that amount will change over time. I needed their addresses and I needed their social security numbers. My brokerage and savings accounts are all TOD to these beneficiaries. They are all listed as beneficiaries on my IRA. Fidelity told me that they handle everything with the beneficiaries. Believe they have to present a death certificate and the IRA will be split into equal inherited IRA's. I was trying to make it easy on my executor so I consolidated as many accounts as I could. Also someone mentioned that they couldn't see leaving their money to strangers if they didn't know the children. People move for school, military or jobs and I haven't seen some of my nieces or nephews in years. They range in age from late 20's to early 50's<<oldest sisters daughter and I am only 4 years older than her. Except for one nephew, I do not know how they handle their finances. I gift all of them a small amount of money every year and tell them every year that the amount could increase, decrease or stop completely.

 

[pacergal]

I just married a man with an adult son. Husband was divorced for many years, never expected to remarry (surprise!), and son was always told he would inherit whatever was left.

I recommended husband put his premarital assets in a revocable trust, with son as successor trustee, which he is in the process of doing. Keeps me out of the whole business, which is what I want. All I want is his wedding ring, which was my previous husband's, and is freighted with memories. It will be mentioned specifically in the trust.

Congratulations on your recent marriage!

 

[ncbill]

My executor has all my account information and passwords to access. I update this information with them when I change anything. They know approximately how much my estate is worth at present.
My nieces and nephews are my beneficiaries and they know it. They do not know what my estate is worth because that amount will change over time. I needed their addresses and I needed their social security numbers. My brokerage and savings accounts are all TOD to these beneficiaries. They are all listed as beneficiaries on my IRA. Fidelity told me that they handle everything with the beneficiaries. Believe they have to present a death certificate and the IRA will be split into equal inherited IRA's. I was trying to make it easy on my executor so I consolidated as many accounts as I could. Also someone mentioned that they couldn't see leaving their money to strangers if they didn't know the children. People move for school, military or jobs and I haven't seen some of my nieces or nephews in years. They range in age from late 20's to early 50's<<oldest sisters daughter and I am only 4 years older than her. Except for one nephew, I do not know how they handle their finances. I gift all of them a small amount of money every year and tell them every year that the amount could increase, decrease or stop completely.

That's exactly what my wife's childless aunt did though I'm sure that wasn't her intention.

She was incompetent & had been in a nursing home for several years so everyone assumed she'd die first.

Naturally her husband (still living independently at home) dropped dead instead.

Then aunt's side of the family (from whom she had been estranged for decades) wanted to come in and assume guardianship plus control of her assets.

That meant an expensive fight with uncle's side of the family who had been providing care, transportation to doctors, etc. for years.

Aunt's will was also so out-of-date that it included her mother who had died over 40 years prior.

Worse was that instead of named beneficiaries she had "nieces and nephews" so on her side of the family everybody eligible came out of the woodwork.

She never knew any of them & it delayed settling the estate for several years.

 

[RetMD21]

I think its the parent's responsibility to foster a healthy respect for money. Even in moderately wealthy families, off-hand dinner table comments on the Dow, interest rates and such can slowly educate young ones on the value, power and dangers of money.

Eventually they come to appreciate that a pile of cash is not for immediate spending but for "working for you while you sleep" (that had been my life-lesson at age 13).

.....

You can teach but you can't make people learn. The eventual appreciation of investing may or may not be present in 21 year olds especilly when someone told them that they are due to inherit an unimaginable amount of money.

 

[RetMD21]

What happens if she doesn't make it for them to be 21?

I don't know the answer to any of it. I don't know you can know until you get to the point to decide and see what's happening. Maybe they get nothing if they are in a bad way. And yes that also can happen.

What happens if after the get it they turn to drug and alcohol abuse?

I don't think anything is guaranteed or easy or predicted. Lots can happen before and even after an inheritance

Yes, the future is uncertain. I don't see the advantage to telling them at 21 as in your previous post. I had the opportunity to disclaim inheritance from my mother and let it pass to the young adult children but I didn't. They didn't need cash. I put it in our joint trust. They will get it on schedule by age. They talk to me about their Roth accounts and investing. They have developed good habits. I don't think it would have been helpful for them to know that they will inherit enough to make their Roths insignificant. I could be wrong.

 

[CO-guy]

I didn't know how to answer this question because I think it really depends on both the benefactor and the beneficiary as well as the relationship they have.

 

[Texas Proud]

So.... just got on this thread and will not be reading it all... just want to add my real world experience...

You NEED to tell people if you put them down as a beneficiary on any account!!!

I knew there was some money my mom left for someone and as executor I kept calling them to find out who... I was told they would NOT give me that information as it is 'confidential'....

One day when I called I forgot to tell them I was the executor and GUESS WHAT I was the beneficiary!! They would not talk to me when I said I was the executor but were very helpful when I was the beneficiary...

And if I had not known about that account it would have gone uncollected... maybe some day in the future I would see it as state funds but who knows...

 

[Lsbcal]

This thread comes at a good time for me. We will be visiting our DS and family on Thanksgiving and I need to have a talk with DS. I need to let him know roughly how large the estate is and maybe a few choice words about how unknown the future can be. If we croaked today he will inherit a substantial amount, perhaps it will change his life a little.

I need to be very explicit without stepping on toes that, yes we have a bundle but I want total safety financially so sorry but the money remains with us. Recently I had the shock of unexpected medical problems and gee, maybe I won't live forever after all. Who would have thought that.

We have a revocable living trust that I have to review now as it is 38 years old. A copy is with Vanguard as is most of our liquid assets. He has an account at VG and we have discussed investing methods over some years. I have left a paper trail in the house and he knows how to access it but hasn't seen the contents. That way I can update it from time to time.

P.S. I appreciate all your posts. Good for us oldies to share experiences. My Mom past in 1978 and my Dad remarried then died in 1982. The woman he married was quite aware of his major health issues and she had previous been a nurse. The main asset was the house and she lived in it for about 35 years more. She was a hoarder and really nuts but lived into her 90's. So I got my inheritance but had to wait into my old age.

 

[Sunset]

So.... just got on this thread and will not be reading it all... just want to add my real world experience...

You NEED to tell people if you put them down as a beneficiary on any account!!!

I knew there was some money my mom left for someone and as executor I kept calling them to find out who... I was told they would NOT give me that information as it is 'confidential'....

One day when I called I forgot to tell them I was the executor and GUESS WHAT I was the beneficiary!! They would not talk to me when I said I was the executor but were very helpful when I was the beneficiary...

And if I had not known about that account it would have gone uncollected... maybe some day in the future I would see it as state funds but who knows...

Very good point.

When my Dad died, even though I did his tax returns back then, I was never sure we had collected every life insurance policy claim or bank account.

He just didn't have a paper list of current accounts and policies.

Same issue with my Mom, and she had approximately 10 bank accounts (lived during depression) but no list, so maybe I missed something.

I need to make a list

 

[RetiredHappy]

So.... just got on this thread and will not be reading it all... just want to add my real world experience...

You NEED to tell people if you put them down as a beneficiary on any account!!!

I knew there was some money my mom left for someone and as executor I kept calling them to find out who... I was told they would NOT give me that information as it is 'confidential'....

One day when I called I forgot to tell them I was the executor and GUESS WHAT I was the beneficiary!! They would not talk to me when I said I was the executor but were very helpful when I was the beneficiary...

And if I had not known about that account it would have gone uncollected... maybe some day in the future I would see it as state funds but who knows...

Who are the "they"?

 

[omni550]

Or your Parent gets married..... and the $$$$ all goes away to spouse, and the kids get zip. It happened earlier in the thread.

Happens a lot.

A snowbird acquaintance in Florida told me about getting married (her first time) in her early 40s to a divorced man (in his 50s) with adult kids. He was a very successful contractor. They lived in a big house, living the life, fancy travels, etc. He died (suddenly) 10 years later. She got everything, his adult kids got zilch. The kids don't talk to her.

omni

 

[disneysteve]

You NEED to tell people if you put them down as a beneficiary on any account!!!

This is so important. If you list someone as a beneficiary, tell them. Give them the bank or brokerage account info and contact info. If you name someone as beneficiary of an insurance policy, they need the policy number and contact info. If you name someone in your will to inherit anything from you, let them know. Tell them the name and contact info of the attorney handling your estate.

Surprise inheritances make a great story line in a movie but real life doesn't work that way. The recipient needs to know about the bequest and how to go about collecting it upon your death.

Even though my cousin had shared what we thought was everything I'd need to know about his accounts, it still took me weeks to work through it all to get all of the money released. If he had any accounts he hadn't told me about, I would have had no way of knowing they existed.

Also after a loved one dies, be sure to do an unclaimed property search periodically to make sure no lost assets are still out there.

 

[audreyh1]

This thread comes at a good time for me. We will be visiting our DS and family on Thanksgiving and I need to have a talk with DS. I need to let him know roughly how large the estate is and maybe a few choice words about how unknown the future can be. If we croaked today he will inherit a substantial amount, perhaps it will change his life a little.

I need to be very explicit without stepping on toes that, yes we have a bundle but I want total safety financially so sorry but the money remains with us. Recently I had the shock of unexpected medical problems and gee, maybe I won't live forever after all. Who would have thought that.

We have a revocable living trust that I have to review now as it is 38 years old. A copy is with Vanguard as is most of our liquid assets. He has an account at VG and we have discussed investing methods over some years. I have left a paper trail in the house and he knows how to access it but hasn't seen the contents. That way I can update it from time to time.

P.S. I appreciate all your posts. Good for us oldies to share experiences. My Mom past in 1978 and my Dad remarried then died in 1982. The woman he married was quite aware of his major health issues and she had previous been a nurse. The main asset was the house and she lived in it for about 35 years more. She was a hoarder and really nuts but lived into her 90's. So I got my inheritance but had to wait into my old age.

Yeah, one problem with telling heirs specifics is that some might hope to get funds now.

 

[marko]

Happens a lot.

A snowbird acquaintance in Florida told me about getting married (her first time) in her early 40s to a divorced man (in his 50s) with adult kids. He was a very successful contractor. They lived in a big house, living the life, fancy travels, etc. He died (suddenly) 10 years later. She got everything, his adult kids got zilch. The kids don't talk to her.

omni

As noted above, shame on dad for not preparing better. Irresponsible. (Unless he deliberately wanted to stiff them)

 

[Texas Proud]

Who are the "they"?

Texas retirement system...

BTW, as someone pointed out life insurance is another... I had a very hard time getting funds from my mom's life insurance company that had changed from a mutual company to a taxable one... she had shares.. but the policy was bought before SS numbers so it was almost impossible to 'prove' to the state of NY it was my mom's money... do not think that you can get money from a state if it eventually goes to them... my brother cannot get $35 because the state does not have an apt. number on their form but he has to put it down... he just said it was not worth the hassle...

 

[Stormy Kromer]

Warren Buffett and Dave Ramsey (two opposites, but widely listened to) both say to leave no surprises to your heirs while you are still alive. I'm in their camp. I have written instructions on to DS and DD how they should reinvest the inherited assets into their Vanguard accounts. I've seen too many people inherit a pile and blow it in a year or two. "Its free money" is a term I heard some of them say.

On a related note. Not to hijack the thread but it is very similar. I know the local funeral director as a friend. She told me that 3 Quarters of the families that come in to see her to arrange their parents funeral are intensely angry at each other. No matter how much money is involved. She said some communication before the finaL whistle blows would prevent a lot of problems. She also said it is usually a son/daughter in-law that causes the problem.