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

[FlaGator]

Up until a month ago my policy was strictly don't ask/don't tell. The unspoken rule in my family was no open discussions about finances. Of course this was for our generation only; our parents always shared openly so that we could assist them and we were always happy to do so.

But after I got the shock of my life during an ER visit last month, I felt an urgent need to open it up to all my beneficiaries immediately while I was still functional, so that's what I did. My situation is complicated by a highly uncertain timeline, it could be months, years, even decades, all of these currently with similar likelihoods if I read between the lines correctly. More data is in the pipeline so clarity should grow quickly.

In the meantime I'm assuming the shortest horizon and so have dumped all of my details on every one of my heirs. My family has been very supportive in my efforts to catch up on all of the forms and paperwork that could conceivably be useful depending on where I land. This includes impairment scenarios which apparently are more likely than imminent death based on what we know so far. I'm finally caught up except for my will which I've just finished drafting an hour ago.

So count me in for "notify with $ amount", but I can't say yet whether this is "well in advance".

Very sorry to see this, hope you see the long end of what is possible. Best of luck to you.

 

[SunGuy]

I think letting them know in advance they are inheritors is a good idea. Give them a low end ballpark number, like if you think it would be $100k-500k err towards the lower end.

As you age, and if you have your end of life care paid for, like hospice insurance etc, you can up the numbers.

 

[Dash man]

We spoke to our two sons about our trusts a few years ago and included our daughter in law. We showed them our account balances at the time and estimated real estate values. I gave the more responsible son a list of accounts with account numbers and contact information. We attempted to get our less responsible son to meet with us to try to educate him on some basics. This never happened. So now we’re going to modify our trusts to significantly curtail any control he’ll have over disbursement of the funds and basically give him a quarterly paycheck. We’re going to secure some of the money in a generational skipping trust for his kids.

 

[livingalmostlarge]

So I get a lot of different aspects and perspectives because of my family. My mom second wife got everything 100%. They were also married 35 years and it was longer than the first marriage. So should the kids have gotten his share? Hmmm. That's not what my dad wanted. He wanted and stated so implicitly to take of my mom 21 years younger. The kids all talk and text my mom still. We are invited to graduations and weddings etc. But do first marriages trump everything even if they were shorter because you have kids?

That being said my mom only has me and I get everything and with full transparency now that I manage everything. I know to the dollar what she has in investments. I went to the lawyer and helped set up the trust. I know the two properties and truthfully everything is going to my two kids. I get nothing. I am not the beneficiary on the Roth / traditional IRA nor the taxable account. I am not getting the house and condo.

Completely skipped over and I told my DH my mom's wishes to disinherit me and it's about $4-5m now today. So it's a pretty substantial sum and she's not touching any of it, if ever. So I've been telling the kids about money and responsibility and paying for themselves and I've been honest that she plans on leaving them her estate.

I have not shared detailed numbers nor the portfolio. But they know she has a house and a condo in hawaii. So they have said they are "inheriting" the house and condo. As they get older and she gets older I will share more details because I believe they will inherit a pretty good amount.

Now for dh and I? Well that's harder. We will leave behind a substantial sum and we have to decide how much, when, and how. I am trying to figure this out but I think that we may have to watch how the kids handle my mom's inheritance.

 

[jj]

We have 4 kids, and they know they are our only heirs. We have no idea how much will be in the estate when we are both gone. We gifted with warm hands, a 6-figure sum each, requiring gift tax filings. This was after we had received an unexpected legacy. This has mainly had three effects.

1 - We are somehow mentally freed to spend the rest how we like. We are taking 4% a year, and we may increase that to 5% if we can find something we want to spend it on.

2 - I figure that if I go early, my spouse marries again, and the new spouse's kids end up inheriting the lot, then at least my kids have had a pretty reasonable legacy. I won't be happy about it, but I'll be dead. (We have a trust which suggests the surviving spouse gets a pre-nup if they remarry, but I'm sure that could be ignored, and our kids would have to litigate.)

3 - We get to see how they cope with this extra cash. So far, it's all been invested, and no crazy cars. I am trying not to be judgmental about any of their financial decisions, those I can see from being around them. This cash was without strings.

Their attitude is definitely - you need to get spending - and don't worry about us, which is great.

 

[Murdock75]

My son has a copy of our trust and advanced health care directive. If he bothers to read, he will see who our beneficiaries are - him and charities. I have also verbally told him countless times to stop being so frugal because he will inherit millions. He is so painfully frugal that it hurts just to know that he can treat himself better. In his mind, what is his is his and what is mine is mine. He doesn't seem to have the concept or think about when I am gone. I do gift money into his investment account each year and since he has to look at 1099 statement when he does taxes, he knows that his investments are growing slowly.

Would gifting into his savings account be a better idea? Sounds like his investment accounts won't be needed.

 

[RetiredHappy]

Would gifting into his savings account be a better idea? Sounds like his investment accounts won't be needed.

I always ensure that he has at least $10K in our joint savings account all the time, as he taps into it to pay bills when he has a shortfall in his checking account. When he is able to work all through the year he does not need the money in the account. But when he has a gap in employment, he will pull from the joint savings account to pay his bills, and I will automatically top it back up to above $10K. I just want him to feel the comfort of knowing that there is money that he has access to easily. He has been working more than 40 hours a week since July and he paid his property tax ($4K+) in October in full without tapping into our joint savings.