July 8, 2013

Leaving an Inheritance: Should I ?

 
For most of us, a satisfying retirement requires some serious financial planning and often a fair amount of sacrifice and delayed gratification. As last Friday's post on Finances detailed, the first few years of my journey had its share of money issues Betty and I had to work through.
 
One part of financial planning I did not address was the issue of leaving an inheritance to children, grandchildren, or an organization we feel strongly about. You have probably seen the bumper sticker, "I'm spending my kid's inheritance," on the back of a large RV. We probably also know of people who live a very restricted and limited retirement so money can be left for others after death.
 
Not too long ago a reader sent me an e-mail asking if I would explore this subject a bit. Part of her message said:
 
"I was hoping you might explore the idea of how most retirees feel about leaving an inheritance to their children. My husband is still a year or so away from retirement, but I find myself already thinking about how we might live on our SS and pensions, so that we can leave our nest egg for our kids. I remember as my parents grew older trying to encourage them to spend more, but they seemed content and wanted to make sure they were passing some wealth on to us. I just wonder how you and your readers feel about this. Or is it even possible with rising health costs, etc?"
 
I found several web sites that refer to recent studies that show somewhere around one-half of all retirees plan on leaving an inheritance. Of course, "leaving an inheritance" doesn't say whether that means a large nest egg for the next generation or enough to handle end-of-life expenses with some sum left over.

I could find no historical data that indicates whether that percentage has been affected by the latest recession and poor return on investments, but common sense says it probably has. So many retirees are worried about providing for themselves without being a burden on their adult children or relatives that the thought of leaving extra money is a non-starter.

So, inheritance-leaving:

*Is it a "responsibility" of the parents to help their kids or relatives with a good-sized portfolio?

*Or, rather than a responsibility is an inheritance a way we can show love and be fondly remembered?

*Or, have we decided to start distributing our projected inheritance now, over time, rather than waiting until we are gone?

*Or, do we live our retired life wisely yet fully, not scrimping to the point of discomfort or forgoing experiences,  but not trying to "die broke" by spending everything we have this side of the grass?

*Or, do we believe that we spent a tremendous amount raising our kids and now it is finally our turn to enjoy our retirement money? If there is something left over, great.


This is a toughie. This is a subject that you probably feel strongly about. I ask for your feedback and responses with one important restriction: no comment that implies another comment comes from a selfish person will be posted. The issue of inheritance is very personal. It is one that contains no one right answer. Every decision and expression of that decision deserves our respect. We may not agree with the choice someone makes, but it is not up to us to tell them they are wrong.

So, what are your thoughts? What part does inheritance play in your financial planning?
 
 

62 comments:

  1. We inherited enough to help us significantly when I turned 30. We decided then that we would help our two, when we could, while they are growing. We saved to do just that.
    As we downsize we offer our things to them.
    If I pass first, my husband says that he will give the kids the nest egg since he has a good pension and SS. If he dies first his pension will end and, I think, there will be little left.
    Both kids have expressed that they are far more concerned that we have enough to care for ourselves the way we would like, then leaving money to them.

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    1. Janette, you have raised good kids based upon their reply. I always said the same to my Mom, that she should spend on herself and not worry about leaving anything to the kids, who were all in good shape. She really didn't listen but still lived well enough as far as she was concerned. Hopefully things will turn out equally well for Deb and I. And our daughter has the same philosophy as your kids, btw.

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    2. Our kids feel the same way yours do: take care of our needs first and if there is something left, then they won't refuse it!

      It is helpful for you to explain the different outcomes depending on who dies first, your husband or you. That shows thoughtful planning.

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  2. Good Morning...this is a toughie as you said. Here are my thoughts for what they are worth (if anything)
    When we got ready to retire we put everything into a trust which in my humble opinion is easier than a will. It includes our house, car, pensions etc. My husband and I are the primary trustees. When we die our children become the trustees of whatever is left.
    We will live our retirement years wisely and not spend with reckless abandon. If there is $$$$ and property etc left it will be part of the trust and our children are more than welcome to it. I do feel that we spent the better part of our lives working and saving and gave our children a wonderful life under our roof along with paid for college educations, weddings etc. I think our responsibility in that area is complete. This is our time that we have worked and planned for.
    Just my morning thoughts over coffee.
    Waving from the Rocky mountains where we have escaped the heat for 6 weeks ....Care to join us Bob? Cindy

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    1. Betty and I are heading to Portland, Oregon in a month. Considering it was 107 yesterday on our back porch and 76 at the Portland airport, I think we are more than ready for the break.

      "We live our retirement years wisely and not spend with reckless abandon" is certainly our approach, too. Like you our kids got through college with no debt and a sum of money we called "starter" money to help them get established. We have provided housing for one daughter a few times between jobs, paid for a wedding, allowed our oldest daughter's family to borrow our RV for a vacation, and set aside money for the three grandkids.

      While I don't believe it is my responsibility to leave an inheritance, Betty and I live in such a manner that there is likely to be one. Assuming that comes to pass we will be quite glad to know the money is staying within the family.

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    2. sounds like we are of like minds on that subject

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  3. Interesting...
    I as well as DH were fortunate to inherit some money from relatives and used it mostly to build and increase our retirement fund.
    An amount that comes from a travel loving relative who passed away too early was kept intact and budget as our "travelling fund".

    There are no kids of our own in the game, but several nieces and nephews - not from the side where most of the inherited money came from.

    We will retire early at age 55/61 in 2 months. We plan to keep our spending "as is". If need arises we could cut down. If inflation allows we will not outlive the money.
    Then those of the nieces and nephews who stay in touch (or their kids) might be as fortunate as we have been.

    We do not feel obliged to keep the principal intact.
    We also do not want to "buy love and contact" by advertising that there might be an inheritance some day.
    However, from time to time we have been generous when the opportunity seemed right, like supporting a trip or study abroad, nice wedding gifts and the like.
    Right now our will spreads the amount rather equally to all n&n, but whoever of us lives longer has all freedom to change that.

    Chris

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    1. A rational and reasonable approach, Chris. I (and my two brothers)will eventually inherit a substantial amount from my parent's two trusts. Being the person responsible to oversee and grow those trusts for my dad (mom passed a few years ago), I am comfortable in what will be left.

      I have gotten his permission to begin a small distribution of the total each year rather than wait for a lump sum at some point down the road. For us, that early distribution becomes our yearly travel budget.

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  4. jeanette@postworksavvy.comMon Jul 08, 05:43:00 AM MST

    The inheritance question is a challenge that our financial advisor posed to us a few years ago when both of us were still working. We purchased a large (last to die) insurance policy and paid it in full -- except for a small fixed annual amount. Our son is the beneficiary. I was never a fan of insurance but this seemed a useful method to deal with the inheritance question as well as probate and estate taxes. We don't worry about using our assets in retirement although our lifestyle is still moderate.
    Be well, Jeanette

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    1. My parents lived their retirement in a way to insure a good-sized inheritance for their three sons. By establishing different trusts they will make the inheritance and probate issues much easier. If Congress doesn't mess with the estate tax issue again (seems to be every year!) things will be just fine.

      Importantly, none of the three boys have built a retirement plan around that money.

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  5. Our daughter is an only child. Since we were blessed over the years we were able to cover her financially through her college years, and have continued to do a lot for her even now when she is married (vacations that we all take together covered by Deb and I, for example). That being said, I still would like to leave her a reasonable inheritance, even while we enjoy life ourselves. There will likely be no grandchildren so the line ends with her (Deb was an only child as well, so nothing there). So while their will not be another generation, I still want to do this for our daughter.

    Not looking to take a bow, either. I just want her to enjoy it and perhaps do some good at the some time for others. Thanks for airing a topic near and dear to my heart, Bob.

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    1. I'm sure your daughter is most thankful for the arrangements you and Deb have made for her. The freedom it grants her to live her life in a certain way while having the ability to choose how to help others is a tremendous blessing.

      Just knowing you from your comments I am sure she has the same love of life and concern for others that you do.

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  6. We have always considered our daughter's education and well-being our obligation and we used to think that maybe at the end of the day there would be a little something left in the tank to pass on to her,as well. We were making strides toward that end at the beginning of our retirement, but now it looks more like the "legacy" we leave behind will be her education. So, Yes, the economy and rising health care costs have changed the way we think about leaving an inheritance.

    I am content with what we are giving our daughter. So many of her friends will be entering their adult lives with enormous student loan and credit card debt and she will be debt-free. I can't think of a better "gift."

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    1. I agree: Betty and I made sure our girls would start their "adult" life debt-free. Neither has ever carried a credit card debt, so except for car loans, they began life without a financial monkey on their back.

      The recession did throw our resources off enough that, like you, any inheritance from us will be modest. But, as I noted in a comment or two above, we hope to preserve enough of my parents' inheritance to allow both girls to breathe easier.

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  7. *Is it a "responsibility" of the parents to help their kids or relatives with a good-sized portfolio?

    Definitely not a responsibility. Currently in our 60s we are about 2 years away from retirement and for my wife and I both sets of parents are alive and living independently in their own homes. I do not consider our parents to have a "responsibility" to give us money and the same should be true for our children (if not then we haven’t done our job as parents).

    Should our parents die while still owning their homes there may be some inheritance but certainly not something either of us are counting on. Our parents have the right to enjoy their retirement lives to the fullest and so do we.

    *Or, rather than a responsibility is an inheritance a way we can show love and be fondly remembered?

    Not so sure I want to be remembered for my cash.

    *Or, have we decided to start distributing our projected inheritance now, over time, rather than waiting until we are gone?

    If part of the joy of life for you is to distribute your wealth now to see others enjoy themselves then please do so by all means. If you would rather spend it in other ways then you are just as free to do so without guilt of any kind – it is your life after all and you only get one.

    *Or, do we live our retired life wisely yet fully, not scrimping to the point of discomfort or forgoing experiences, but not trying to "die broke" by spending everything we have this side of the grass?

    It’s probably always best to life your life wisely but often hard to get exactly right. We have to make our choices based on the knowledge we have at the time and then act on our beliefs and values.

    *Or, do we believe that we spent a tremendous amount raising our kids and now it is finally our turn to enjoy our retirement money? If there is something left over, great.

    The answer to this is: What would you have your parents do? Should they have enjoyed their own retirements or have lived on tea and toast so you could remember them for the money they left you? Surely you should expect no less than what you wanted for your own parents.

    I think most of us aren’t sitting around counting the days for our parents to die (and counting the dollars they are "wasting" by living). If our children were doing that (I am convinced they are not) I’d be sure and leave the money to a charity rather than let them get their ungrateful hands on it. Personally I am going to try and not be a financial burden to my children and if there is something left over at the end of it all, great.

    - David

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    1. I can add nothing to your excellent summary and reaction to each of the questions I posed. Thank you for taking the time to leave your thoughtful response, David. You have given the readers some important concepts to consider.

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  8. Cari in North TexasMon Jul 08, 07:48:00 AM MST

    I don't have children, so any inheritance I leave would go to brothers, nieces, nephew, and/or their kids. I have such a "blended" family that it might get complicated, and the non-immediate family members don't keep in contact, so I'm really tempted just to leave everything to charity LOL

    On the more serious side, I was fortunate to be the beneficiary of 2 different inheritances - one when I was in high school that was designed to help with my brothers' and my college education, and the other more recently from my grandmother who passed away at the ripe young age of 100. She was a depression-era lady who spent the last years of her life worrying that she would outlive her money. Her house was paid for, she paid cash for new cars, and she employed a part-time companion/nurse the past few years of her life, and lo and behold, she had a sizable estate that gave her heirs a pretty hefty chunk of change. I don't know if she wanted us to have the peace of mind she didn't, or if she was happy with her limited lifestyle.

    My mother's situation financially is such that she has a paid-off house, car, and enough income from SS and teacher retirement to live comfortably. We 4 kids are not expecting her to provide us with any inheritance, don't really want one, and keep telling her to spend and enjoy her golden years. I think she is doing that.

    My plans are to "die broke" as the saying goes. I'm hopefully not going to outlive my money but I don't plan on scrimping just to leave something behind. I've got my funeral and burial plot paid for, so expenses should be minimal, and I'll have that covered. I have several charities that I'd like to divide my estate between, and that's about it. The majority of family members are old enough now that they earn their own living and have their own comfortable lives, so I don't feel "responsible" for making their lives easier at this point in time. I'd want to treat everyone equally, and because there are so many, each portion probably wouldn't be much.

    If there is a financial need (and there have been in times past), I'm more of the mind to help out now rather than wait till I'm gone.

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  9. Thanks, Cari, for adding the perspective from someone in your situation. It does sound complicated to figure out how to deal with various layers of relationships and how close someone is to you.

    My parents did an amazing job of building up a substantial estate. My mom's mother and brother both died within a year of each other and both left decent-sized estates to her. That was the foundation that resulted in what they built.

    They traveled extensively for the first ten years or so of their retirement. but then mom's health made such trips impossible. Dad is quite content to spend almost nothing on himself. He lives in a CCRC so most of his needs are met. he doesn't go anywhere or do anything so the investments just continue to grow.

    As I have noted, I didn't plan on their inheritance when Betty and I retired, but it will certainly come in handy whenever it becomes available and our kids will be welcome to whatever is there when we check out.

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  10. I'm not convinced that it's the parents' responsibility to leave an inheritance to children although it would certainly be nice if possible. I wonder if the responsibility lies in "estate planning" so the business of death can be handled as smoothly as possible by the ones we leave behind. A decision that I faced at the time of retirement was whether or not to "guarantee" the work pension I would receive with a choice of 5, 10 or 15 years (resulting in a reduced monthly pension accordingly with a payout to beneficiary in the even of death) or not at all. I chose not to guarantee the pension with the knowledge that there would be value in my property left at my death. Again, should I require additional finances prior to my death, there will be a for sale sign on the property.

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    1. One very thoughtful step my parents took was the establishment of a revocable and an irrevocable trust to simplify things when the time came. Except for a car and some personal effects, everything else was put in the trusts.

      One area that has not been raised yet is the effect of a reverse mortage on any inheritance. The equity in one's home can be a lifesaver if money grows tight, but it is likely there will be nothing to pass on. Is that an issue?

      I fall into your camp, Mona. If that step must be taken (or selling the home) then I will do so. I don't want my kids to have to take financial responsibility for me or their mom. That is one of the best gifts I can give them.

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    2. This is a great way to look at it. I made the same choices with my retirement benefits and would also choose the For Sale sign if I needed additional money at a later time.

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  11. I like the idea that we enjoy our retirement and then if there is money left over then they can enjoy it. I think that in my wish to make my money last for the possibility that I will be ninety and need money to live, I will almost certainly have money left over for an inheritance for my children. Seeing that balance dwindle to almost nothing on my retirement spreadsheet makes me nervous, so I have set it up so that there will inevitably be an amount for inheritance. And then if I do go early, there will be an even greater amount for them as well.

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    1. It would be the very lucky person who could manage to run out of money on the last day. It is likely that all of us will have something left in the till for others. The real question is do we adjust our retirement lifestyle to affect that amount.

      The comments so far lean toward enjoying life without being a spendthrift and what is left is what will be inherited.

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  12. We find ourselves living rather frugally on pensions and SS rather than spending our nest egg. For some reason I want very much to leave it to our 3 kids. Despite the fact that we educated all three, two of them struggle financially for various reasons and I don't see that the situation will get much better for them. We help some now, but I think the thing I dread most about dying is that we will no longer be able to help them, so we do the only thing that we can.... hope our money outlasts us and leave it to them. I guess it all depends on your situation. By the way, they seldom ask for anything and I don't think they count on inheriting our money. They are great kids.

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    1. "They are great kids." That is your legacy. The finances will be what they will be, but leaving behind good adults is priceless.

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  13. Great topic, Bob. I wish my father had spent more of his money on himself before Alzheimer's took his memory. However he has more than enough to be cared for the rest of his life.

    My spouse and I don't want to deny our own hedonistic thrills for the sake of our daughter-- well, any more than we already have-- and we don't feel obligated to leave an inheritance.

    We're trying a different approach: gifting after college to help her maximize her contributions to her retirement accounts. She earned a big scholarship so we're "profit sharing" the rest of the college fund with her. It amounts to a few years of full 401(k) and Roth IRA contributions, plus an extra $1000 for her "immediate gratification" entertainment budget. She could certainly abuse the deal (or even cheat) but we'll take it one year at a time. I hope it also helps her learn how to handle a windfall or be ready to build her own business.

    The math is compelling when you calculate what you'd have today if you'd maxed out your retirement contributions between ages 22-26...

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    1. That is a great idea for those who can do it. I started my IRA at 27 and it was the foundation of my ability to retire when I did. You are giving your daughter a tremendous gift by allowing the power of compounding to help her future security.

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  14. We've done the very best we could for our kids, including education and what they needed to set off into the world. They've both done well for themselves and need nothing more from us. Your last option would be our approach.
    b

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    1. You are in line with most of the comments, and my view as well.

      Betty and I are actually thinking more of the grandkids when we wonder about left over money. I'm afraid that generation is going to struggle financially because of the huge hole our government has left for all of us to fill in.

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    2. Yes Bob, our generation is a victim as well, however we're not without responsibility, with all our credit card debt, inability to save, as well as the poor leaders we have put into office over and over again. Along with our lack of interest in making a lot of noise to force elected officials to put genuine teeth into punishment for white collar criminals. We just let it pass, without any loud, consistent public objection. And now lo and behold - those corporate, bank & Wall St. criminals have destroyed our financial system from the inside, to a large degree. And we let it happen.

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  15. As a young widow, My DH left me with instuctions "Try to leave some assets for the kids."I responded " I guess you have to trust me." My kids say "It's your money-Dad and you earned it and saved it, its not ours, so spend wildly or whatever way you want!" And there lies the dilemma!Do I honor my DH wishes or really spend wildly? We provided most of their college and helped with law school, and I gave towards the weddings. I also set up 529's for the grandkids. And if I marry again who deserves to get what's left?

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    1. What is the definition of "wildly?" Many would think my purchase of a gas-guzzling RV qualifies, but it is am important part of our retirement and makes us very happy.

      It sounds as though your kids have given you the answer: "spend it whatever way you want." You decide how much to try to leave for the children and how much goes to you and/or a new marriage. In that way you can honor both your promise to your husband and your kids' wishes.

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  16. Very interesting topic. We were pretty frugal while working and continue to live that way by choice...but we will spend on things that are important to us. Our children are managing just fine. If they really needed our financial help...and had done all they could by working..then we would most certainly try to help...but not beyond what we felt comfortable providing.
    We think we have all of our bases covered with our retirement money plan...but it is not a given what life will hold. We (DH and I) have discussed what we hope the survivor needs to know about good ideas of what the surviving spouse will have to deal with. We also have farm ground and my husband is one of four children and his part of his parent's estate is a partnership in the farm. We also have farm ground we rent out....we are planning to leave this to our two children...how they proceed with it, will be their choice. However, if dire things occurred and we suddenly were struggling financially, we would not hesitate to liquidate some or all of our land.
    My parents are still living....and I am constantly reminding them that they should spend on what they want and not worry about any of us three kids. They worked very hard for what they have and I sure want them to be able to enjoy it. But they have always been extremely frugal...depression babies...and they are happy with what they do have and rarely splurge other than eating out quite often...and I am soooo glad they do that. That will be a better memory for me than whatever they may leave behind.

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    1. My parents struggled financially for various reasons, though we were never hurting. My dad's dad died very young so my father was the primary breadwinner for his family when he was still a teen. I think those factors contributed to his always worrying about money even though he couldn't outlive his money even if he tried.

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  17. Bob, thanks for posting on this subject. The questions you asked were thought provoking and the varied responses of all your readers are equally interesting.

    We have two grown daughters, one single and one married. The single one has a teaching degree and if she stays in that profession, will probably always have a modest, yet adequate income. The married daughter has a husband with a good income and bright future, but has a severely handicapped child who requires constant, highly-skilled care.

    I liked one reader's response that "they have always lived frugally and responsibly and will probably not change that in retirement, thus probably allowing them to be able to leave some inheritance." This tends to be our lifestyle, as well, so hopefully we will be able to leave a little to each child. With the future of SS in question and company pensions quickly becoming a thing of the past, I'm sure any amount will be welcome!

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    1. I have the most fear for my grandkids' generation. My married daughter does the most amazing job feeding and clothing her family well for much less money than I would have thought possible. But, even she can't control what seems to be going on in the world and in America with pensions and health care. Her children are going to bear the brunt of our lack of self discipline as a society.

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  18. I'm not planning to leave an inheritance to my daughter. I've given her a car and part of the savings from her college fund (she chose not to go). There is still a few hundred left that I feel belongs to her. I expect that I'll will need most of what I've saved to live a comfortable life in retirement.

    Like some of the other comments, I don't feel it's my responsibility to leave anything to anyone. That being said, there are some items of personal property I would like for my daughter as well as my nieces and nephew to have. There are few pieces of art I've been thinking about distributing to each of them so I might just tag those pieces with their names. My hope is that I won't outlive my money, or leave a nursing home bill behind.

    My father didn't leave much behind and I'm certainly not expecting anything from mother, because we're not a family of wealth or means anyway. I'd much prefer a personal item to remember her by, and she's already given me that. I received my father's old grade school speller and to me that's worth more than any amount of money.

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    1. I found a cassette tape of my mom reading a story to my daughters probably 25-28 years ago. It is much more valuable than money for the memories and hearing her voice again.

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  19. A lot of good comments here Bob.. Being a contrarian I want to plug one missing part. While we don't have any children we do have many nieces/nephews/etc but plan on leaving nothing to them. Why do we only consider leaving our wealth to our children? I expect when Yvonne and I are gone we will leave behind a fair amount of money (that is if healthcare events don't break us first). All of that money will be going to foundations and other type organizations that give a little assistance to those in need. For the most part our kids can make it on their own and often time inheritance only spoils them (talking about the ultra-rich now).

    Bill Gates and Warren Buffet both plan to leave only a very small percentage of their wealth to their children. I admire them for that. In the past what made this country great is that of equality of condition. That is there was no aristocracy that passes wealth from one generation to another.

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    1. You ask a great question. My grandparent left art and money to charities. Some of it did good, some went to the pockets of the people who ran the charities. My parents left nothing in the will, but have made it a habit to be very generous along the way. I spoke to my husband about leaving some to charity, but he feels that being generous while we can see the good is more important. As we pass money, we also hope to pass the generosity that has been ingrained with our children.

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    2. IMO the idea behind leaving the estate to kids is an implied generation contract within (intact) families, that originates from farming and craft& trade:
      The adults in the family feed and take care of the old and the young and generate the income and the capital equipment / means of production / farm / trade is passed on to secure the income of the next generation.

      Now that most of us pass on money or a piece of real estate, generate their income independently, often live far away from the older generation or have no kids this implied contract has come to its limits.
      Chris
      Chris

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    3. Interesting comment, Chris. I think you are probably right: passing on an inheritance kept the family farm or business intact. Now, that is rarely the motivation behind leaving some type of inheritance. Other reasons are at work.

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  20. When I die my children will get whatever I haven't spent yet. I'm not setting any portion aside specifically for inheritance purposes. I have no problem helping them financially, to a degree, while I'm retired. I have seen a retired person wiped out by her greedy and irresponsible children on one hand, and another person cut his children out completely and leave it all to the woman he married in retirement. I feel sorry for young adults going out into the world today and try to encourage my children to avoid getting burnt out in the ratrace mentality.

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    1. It is a balancing act between helping your kids and making sure you are not hurting yourself. Every one of us must make that decision based on individual factors and family situations. And, yes, young adults have a tough situation to navigate.

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  21. Good point, RJ. I have never seen any figures on this, but I wonder how often well-off couples with children leave the bulk of what's left to charities, educational institutions and the like instead of their offspring. Of course, a very small percentage of Mr. Gates and Mr. Buffet's wealth would be enough for a small country, but still.....

    I believe the original intent of the so-called 'death tax" was to prevent massive transfer of wealth from one generation to the next. But, with the advent of various trusts and clever legal steps, the truly wealthy have all sorts of ways to sidestep that problem.

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    1. But I don't think we should leave it only to "well-off couples" to support charities. All of us who call ourselves Christians should be leaving at least a share of our estates to those institutions. That is simply the Christian thing to do. For the most part our children have been pretty privileged in their lives compared to many others in this world. We simply can't say let someone else take care of those other people.... I like the old saying "If not us then who?"...

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  22. I think it boils down (or should) to what makes particular retirees happy. Most have worked long and hard to the dollars they have, and they deserve to gain whatever pleasure they can from the nest egg in the latter part of their lives. Our situation is so simple, and we are grateful for it, that devoting our resources to making us happy and leaving a substantial amount when we depart dovetail nicely. We have one son and no grandchildren. Our son has helped us often in many ways over the years, and never asked for money. So we always felt good about giving him cash when we knew he needed it. Although we live well in retirement, we do so with an eye to leaving a modest estate for our son to enjoy. This sort of balance gives us great pleasure. Isn't that what retirement should do?

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    1. Balance and moderation: a good combination, Dick. Live well and leave a modest inheritance equals a great plan.

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  23. That's such an individual question ,as reflected in all the comments. Here's my two cents. My parents divorced, died young with nothing to pass on to us. My grandmother, had some money from her husband, but her brother, my grand uncle, made her sign it over to him. My husbands mother died, no insurance, no anything. My husbands father never signed his divorce papers from his 40 something wife, so she got it all. My husbands grandmother was very wealthy, left money to 13 grandchildren that mostly lived and breathed her right wing republican values, and left my husband a small "bequest". The other 13 got a million dollars each. We're we resentful, you bet. We asked his two brothers, who were included, to share. We've never spoken since :(
    So, we have very little, but as someone is my witness, my 2 kids will at least get out life insurance and our house, and anything else I can leave them to help them along in their lives. So what do I believe, I think we should try to help our kids get a little further along than we were.
    Great subject with so many answers.

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    1. That is an amazing family tale, Christina. if anyone has the right to be less than pleased, it sounds like you and your husband. Heavens!

      Your promise to do better by your kids is a heartwarming end to a nasty story.

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    2. I think Christina's story touches upon a very important point. If you plan on excluding someone or giving some family members significantly smaller amounts than others; then have the courage to discuss it with them upfront, so that they can ask questions of you and have an opportunity to understand why you have chosen to take that path. Failing to do this, often results in estranged families; which is not the legacy that most people want to leave for their heirs.

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  24. This is a dilemma I haven't solved yet. I don't have kids, siblings aren't close, and niece and nephew barely keep in touch. I'm much closer to non relatives that I'd like to see share whatever is left. I'm hoping to see comments from your readers who have come up with creative solutions to this
    issue.
    Of course I'd much prefer to live long enough to have just spent the last dollar when I pass on, but who gets to time it that well???
    Great thought provoking post Bob.

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    1. Reader RJ has suggested leaving "extra" money and property to charities or organziations that are meaningful to you. I'd support that approach. It is one way we can help those who come after us.

      In terms of leaving something for non-relatives, I see nothing wrong with that. There is no rule that only those who share your bloodline should be in the will.

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  25. I'm not sure how to avoid leaving something behind, given that we have no idea what our individual lifespans will be! Based on our current spend rate, it does appear there will be quite a bit remaining, but that's more a reflection of our lifestyle than a deliberate strategy. At this point in our early retirement we feel more comfortable erring on the side of being a little too conservative in our spend rate, as opposed to the opposite.

    Whatever is left will go to our daughters, regardless of how much or little that is. I would not feel at all good about bypassing them, regardless of their financial situations, in order to donate to a charitable organization instead. Perhaps that's my mama bear coming out, but my girls have always been my primary concern above and beyond anything else, and I don't expect that to change going forward.

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    1. In a situation like Christina described above, there may be a feeling that others would benefit more from any largess. But, for most, our offspring would come to mind first. That is only natural.

      Our daughters will certainly get whatever is left.

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    2. I may have given the impression I believed donating to a charitable organization rather than one's family to be somehow wrong, which would be absolutely incorrect. I feel strongly that my daughters come before anything else, but that is just me, and neither right nor wrong. I see absolute benefit to doing what Christina and other's have described.

      Blame it on my rush to respond before shooting out the door to an appointment!

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  26. My children have decided which household belongings they want and I've told which things might be valuable so they won't be sold a garage sale prices. Whatever liquid assets are left my two sons will split. Nothing earmarked for anyone or organization.

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    1. Deciding ahead of time what children or relatives would like from household goods is important. Aa one of the comments above noted, to not deal with these issues ahead of time can leave behind a time bomb of bad feelings.

      Betty had several things of her mom and dad's that she wanted. She discussed with her brother, got his OK, and they now reside in a credenza in our dining room. Everyone's happy.

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  27. I don't have children, but I did have parents. My parents were hard-working, frugal-living, working-class folks who never owned much. By the time my mother died, almost all her assets had been dissolved to pay for the nursing home care that she required when she was paralyzed by a brain tumor. My inheritance was a few items of clothing from her closet (including two beautiful embroidered jackets -- one that I wore to her funeral, and one that she had made herself in the 1970s) and some favorite books from her bookshelves. They were all the inheritance I needed and they regularly make me smile and feel as though she is with me. -Jean

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  28. Oh, what a thought provoking post with so many interesting comments. I sincerely doubt that we will have any money worth mentioning to pass on. This just leaves the family home to share between two adult children. They are both currently surviving quite well but that could change at anytime. So whatever they get from the sale would probably give a small boost to their situations.

    We live a fairly simple life but don't scrimp if we need anything.I guess we've never been in a position to spend wildly so retirement is just a continuation of what we've always done financially. I know our children will tell us to look after our own needs first.

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    1. Hi Sandy,

      Thanks for adding your situation. I never expected this post to generate so much interest but it is a subject with so many possible options.

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