Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

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iamblessed
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Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by iamblessed »

I might get an inheritance in the future.
The Wizard
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by The Wizard »

"As planned" is key.
Most would feel good if the inheritance comes in on top of the $1M that the 40-year old recipient has accumulated thus far in his working years.

And then the combined amount continues to grow for several decades to come.

That's the good scenario...
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Rupert
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Rupert »

Seems the primary thing that can "go wrong" is that you don't receive the inheritance "as planned." The increasing cost of healthcare, long term care, and end-of-life care in this country makes this scenario increasingly likely for many people.

But I'm not sure that's what you're asking about. What exactly are your fears?
trustquestioner
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by trustquestioner »

- Grandpa’s second wife badgers him to redo estate plan with friendly lawyer and magically emerges with $3 million bequest

- Relatives try to buy out dads interest in family business while estate in probate

Yes, things will go wrong.
Longdog
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Longdog »

What does that mean “as planned?” As planned by whom, the decedent or the recipient? Are you talking about the transfer of funds to the recipient and all the legalities that may need to take place that could affect the transfer? Are you talking about the recipient possibly blowing through the inheritance because they did not know how to handle it?

Please elaborate what your concerns are, if possible.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Sandtrap »

iamblessed wrote: Tue Jan 22, 2019 8:48 am I might get an inheritance in the future.
What can go wrong can include the following:
(The larger the estate, the greater and more severe problems can be.)

0. Disharmonious family dynamics.
1. No Will and/or Trust.
2. Poorly drawn up Will and/or Trust. Or one that is highly interpretive.
3. Dishonest Successor-Trustee. (Despite Trust Code/Law)
4. Litigious Beneficiaries (Hares), Trustees, or both.
5. Poorly structured business and finances that make it difficult/awkward to carry out the Will or Trust Provisions.
6. And, much much more.

Read "Beyond the Grave" by Condon. If only to read actual stories of what can happen "regardless of legal specifics" in the text.

You can edit your original post (pencil icon) to include a little of your "specifics" (amount and when, etc) within your comfort zone to get more targeted (actionable) input to help "you". (Also edit the title vs asking for "stories")

Search the forum archives for: "windfall", "inheritance", "estate planning", etc. for comprehensive threads that may apply to your situation.

Read:
MANAGING A WINDFALL
https://www.bogleheads.org/wiki/Managing_a_windfall

j
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fishmonger
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by fishmonger »

trustquestioner wrote: Tue Jan 22, 2019 9:05 am - Grandpa’s second wife badgers him to redo estate plan with friendly lawyer and magically emerges with $3 million bequest

- Relatives try to buy out dads interest in family business while estate in probate

Yes, things will go wrong.
This just happened with my wife's grandfather. Basically lives off social security, doesn't have much for liquid assets but lives in a nice house on a valuable piece of property that's subdividable ($1M plus). Five kids, one who has been a leech her whole life, moved in shortly after grandma passed. Everyone saw this coming, including her having the will changed to be sole beneficiary. Awful hard for a court to prove grandpa is not of sound mind or did it under duress
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cheese_breath
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by cheese_breath »

Other beneficiaries dispute the will claiming grandpa was coerced or deceived into giving you too much.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by RickBoglehead »

Grandpa decides for a life-end splurge. To conform with this site's policies, he forgoes the normal splurges that you may read about, and visits Whole Foods 3 times a day filling cart after cart with delicacy. He cancelled his Amazon Prime membership just before he went, and also orders everything on Amazon that he can find paying for overnight shipping...

Or "wait, Grandpa had a lien on his house for $1 million"? Or "wait, Grandpa gave all his money to his caregiver who is now out of the country?"

There is no such thing as a planned inheritance from a recipient's perspective. You have no inheritance until the money is in your bank account. You should plan on no inheritance, and plan your financial life so you don't need one. If an inheritance comes, then you should be very thankful, and invest the money wisely, holding out 5% perhaps to go to Whole Foods like Grandpa did, but make sure you have your Prime Membership first. :D
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J295
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by J295 »

What can go wrong? Family members disagree on distributions. In my former law firm one of the attorneys spent a fair amount of time litigating contested estate plans due to family member "disagreements."
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Watty
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Watty »

Here are a couple of real world examples;

I was just a kid so I do not know the details but after my grandfather died his will could not be found even though he was known to have one. There was speculation that someone may have destroyed it since they did not like what was in it.

As a teenager I worked in a nursing home in the summer. In one room there was a mother who was probably in her 90s and or daughter who was in her 70s, and the mother was actually doing a lot better than the daughter. I never heard what happened but I suspect that the mom outlived her daughter which is not all that uncommon if someone lives to be close to 100.

I also know a this situation where this happened.
1) Couple with a seven figure portfolio has several kids
2) Husband dies and leave it to his wife
3) Wife who is in her 70s remarries to a guy that also has kids
4) Couple writes their wills so the surviving spouse will get all the assets for the rest of their life then the remainder will be split between their respective kids.
5) A few years later the woman dies and new husband inherited her money.
6) He rewrites his will so that his kids inherit everything.
7) He dies a few years later and the original couples kids get nothing.

The kids checked with a lawyer but there was nothing that could be done even though there was some question about if the woman had early dementia and the second husband had been abusive to the point where the police were called at least once. They even had to fight to get things like family photo albums that were still in the house.

Sometimes people do not really have as much as you think either.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Ron »

RickBoglehead wrote: Tue Jan 22, 2019 9:38 am<snip...> There is no such thing as a planned inheritance from a recipient's perspective. You have no inheritance until the money is in your bank account.
Exactly.

My parents were divorced after 25+ years of marriage and both remarried. If there was any money left after they both died (I have no idea), it went to the members of their second family.

This is also in response to the question on another thread of how much money were you given by your family. In my case, it was $0. Of course, I received what I expected/planned on.

- Ron
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Jack FFR1846 »

Yes, mother in law's parents had a will leaving their small estate 50/50 to 2 sisters. Sister living with the grandfather coerced him to change the will to 100% to her. Grandfather dies. Law suit starts up but is dropped after several thousands in legal bills and falsified accounting of assets to pass along. Mother in law ends up getting nothing.
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HomerJ
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by HomerJ »

RickBoglehead wrote: Tue Jan 22, 2019 9:38 amThere is no such thing as a planned inheritance from a recipient's perspective. You have no inheritance until the money is in your bank account. You should plan on no inheritance, and plan your financial life so you don't need one.
This.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by lthenderson »

I had some relatives who were estranged from the rest of the family tell me I was getting a sizable inheritance. When they passed away, those estranged relatives came out of the woodwork and essentially fought everything every step of the way. I suppose I could have fought them in court but I really didn't care about the money nor did I want to get in the middle of a family tiff. So I just let them fight over it among themselves and said thanks when they gave me my share which turned out to be an afghan and a box of unsharpened number 2 pencils.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by furwut »

I’m sure it’s been mentioned above but second marriages with children from the first are a minefield.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by stoptothink »

My grandfather was a very successful physician who owned a 15+ provider family practice. My mother worked for him for over 30 years, first as a medical assistant then the last 10yrs as office manager. He was an interesting guy, had Asperger's (like myself) and did not have any close relationships. My mother was probably the closest person on the planet to him. He remarried just a few years before his death, leaving his 2nd wife everything (from what I know, low 8-figures, including three properties individually worth well over $1M). 2-3yrs later my step-grandmother started suffering from dementia and was put in a home, all the sudden my mother's youngest (adopted) sister decided it was a good time to develop a relationship with the women she essentially didn't know. Step-grandmother passed about a year later, considering she had no blood family, my mother and her 6 other siblings assumed the assets would be split between them. Well, my aunt had managed to be named executor of the will: 7-figures was left to the church (including two $1M+ properties), very significant amounts were left to a gardener, the man who took care of their birds, the bishop of their church, one cousin (who we are pretty sure never actually met my step-grandmother), a gentleman that my grandfather had met on a trip to China (that nobody else in the family had any knowledge of), and the rest was left to my aunt. My mother and the other 5 siblings got nothing. Not sure how much she got, but it was well into 7-figures. My aunt was in her mid-40's and a SAHM, her husband was a public school teacher; he immediately retired, they did a ridiculous renovation on their home which more than doubled its size, they've bought several luxury cars, filled their now 4-car garage with 10's of thousands of dollars in bikes, and have spent the last 5-6yrs pretty much traveling the world on perpetual vacation. The best part is the constant social media barrage about how they scrimped and saved for years and are now enjoying the rewards of their delayed gratification.

Needless to say it caused some serious family drama, essentially destroyed a once very close large family. My uncle, who lives about 3 miles away, hasn't seen his sister in over 5yrs. About 7yrs later my mother (a saint) is the only sibling who hasn't totally written her off. I don't know that my mother was depending on the inheritance, but she is now 58 and has $0 in retirement. Her and my step-father have just resigned to the idea that they will work until they can't, and probably be somewhat dependent on my wife and I after that.
Last edited by stoptothink on Tue Jan 22, 2019 10:24 am, edited 1 time in total.
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Nate79
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Nate79 »

I saw our family which was very close nit and loving family ripped apart when Grandfather passed away and their children (my parents and aunts/uncles) disagreed on how to deal with the assets. No matter how close you think a family is ANY family can be ripped apart due to money (greed) and sentiment.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by dm200 »

This all turned out ok - but such situations can result in a mess:

My wife's parents did not have very much in assets. Her mother got the house and modes amount from sale of a small business when her dad died. Then, she sold the house and moved to an apartment. Her will left everything to her two daughters equally. For "convenience", she added my wife's sister as joint owner of bank account(s) and had about half of her total assets in such bank account(s). Then, she died.

My wife's sister, then, was entitled to all the money (as joint owner) in the bank account(s) PLUS half of the other assets. She was, therefore, entitled to about 3/4 of her mother's assets and my wife about 1/4.

My wife's sister, however, knew that her mother's intent was that the two daughters share equally. So, all the assets were divided equally.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Katietsu »

-Retirement plan beneficiary never updated to match will. End of life expenses take most of non retirement experiences. The will named a professional executor who then hired professionals for all after life chores which uses up the rest of non retirement funds. So no one in the will receives anything.

-Trust created. Held at bank with a professional trustee. Fifteen years pass and life has changed. Bank trustee recommends a lawyer to make changes requested. The woman becomes terminally ill. She goes to the lawyer and explains the changes needed to provide for spouse’s support. Lawyer draws up a new will but does not change the trust document. The woman dies. The bank trustee says none of changes to the will are relevant because all wealth was in the trust either before death or because the trust was listed as the beneficiary. Surviving Spouse hires a lawyer but trust holds. Personally, seems like the lawyer who updated the will failed miserably. The language in the new will even provided for payments of X per month to the surviving spouse - clearly (to me as a non lawyer anyway) a directive that belonged in the trust document not the will.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Sandtrap »

HomerJ wrote: Tue Jan 22, 2019 9:53 am
RickBoglehead wrote: Tue Jan 22, 2019 9:38 amThere is no such thing as a planned inheritance from a recipient's perspective. You have no inheritance until the money is in your bank account. You should plan on no inheritance, and plan your financial life so you don't need one.
This.
++++++1
This is amazingly common despite the illogic of planning one's life for some future windfall, putting all of your dreams and ambitions on hold or restructuring as such, only to be "smitten" at a date far beyond what was expected.

IE: Even if one's inheritance seemed guaranteed. After distributions are finalized and taxes paid, etc, the actual amount may be far less than imagined.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by BrendanP »

My dad and his siblings inherited their childhood home when my grandma passed away unexpectedly. Simply put it was a disaster figuring out whether to update it or not, sell to a family or someone who would demolish it, etc. Also not all siblings are at the same level of wealth which added additional strain.

Took many years and arguments before it was all settled.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by MN-Investor »

When my husband's bachelor uncle passed away, the local bank was the executor. They did a great job. My husband asked the woman in charge if she had any horror stories of probating a will. She pulled out a pretty little thimble from her desk drawer and told how, even though 3 years had passed, the children were still fighting over their mother's precious thimble and it had torn the family apart.

--------------------

As far as making this an actionable thread - Make sure you are explicit in the instructions in your will when it comes to personal property. If you want one child to have your great-aunt Tilly's diamond earrings, put that in the will.
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greg24
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by greg24 »

There are a bazillion ways they go wrong.

The first mistake may be planning on an inheritance.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Gill »

MN-Investor wrote: Tue Jan 22, 2019 10:56 am When my husband's bachelor uncle passed away, the local bank was the executor. They did a great job. My husband asked the woman in charge if she had any horror stories of probating a will. She pulled out a pretty little thimble from her desk drawer and told how, even though 3 years had passed, the children were still fighting over their mother's precious thimble and it had torn the family apart.
Good thing the bank examiners didn't see she was holding an estate asset in her desk drawer!
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by CyclingDuo »

iamblessed wrote: Tue Jan 22, 2019 8:48 amI might get an inheritance in the future.
Might, being the operative word.

Most of us would say plan your savings rate and finances independently of any inheritance. If you do get an inheritance, it will just be additional savings. It's too difficult to plan when, how much, exactly how it will all be divided up, etc... unless you come from a family that is totally open about the finances, you have seen the actual will and spoken with all of the family members involved, etc... . Even then, there are usually a few twists and turns before the final end result is actually known.

There will always be lots of issues including those involving family dynamics, legal implications (probate, trust, wills, etc...), tax implications that will throw off your normal savings and tax routine in the year(s) that inheritance is taken - and beyond as well depending on the structure of what you inherit.

Don't underestimate the potent mix of grief and greed once a loved one is gone. I don't want to say every instance is chaotic, but expect something a little more operatic in nature than your daily routine. :beer

Which gets us back to the word: might.

https://www.newretirement.com/retiremen ... -to-heirs/

One in three Americans who do get an inheritance, blow it (if you do get a windfall, don't be the "one"):

https://www.marketwatch.com/story/one-i ... 2015-09-03

Not a high percentage of households receive a wealth transfer:

https://www.bls.gov/ore/pdf/ec110030.pdf

Don't rely on an inheritance:

https://blog.massmutual.com/post/why-mi ... nheritance

https://www.nytimes.com/2008/06/21/busi ... money.html

CyclingDuo
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dm200
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by dm200 »

This happened to some acquaintances (knew several of the parties) -

Husband and wife (let's call them John and Mary) have two teenage children. Both with professional incomes, but John is not very financially responsible. Mary is in good financial condition - assets, debt and income. They divorce. John and Mary each remarry. John marries Sally. Sally is of limited means (both assets and income).

Soon, Sally receives an inheritance. John has considerable debt. John says, "Sally - how about you pay off my debts with your inheritance?" She agrees. Soon after, John (in his lat 40's) has a heart attack and dies.

John had life insurance - BUT named his children as beneficiaries. Now, Sally has no inheritance and limited income.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by FreemanB »

Aside from the stories above, which should be warning enough, there's also the very real possibility that the person leaving you an inheritance could end up either out-living you or at least out-living any plans you made for the inheritance. My wife and I expect that we will likely inherit a sizable amount from her parents at some point. However, that doesn't factor into any of our financial planning, since we could very easily be well into retirement before it actually happens. Act as though it will never happen in regards to your financial and retirement planning, and treat it as a windfall if it actually appears.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by rich126 »

Money can bring out the worst in some people. I have a friend whose parents died close together (one was kind of expected, the other wasn't) and things were frustrating for him. He is a nice guy who does things the "right" way. Besides the stress of losing both parents he had to deal with the will and the attorney and distant relatives who came out of the wood work for money.

He told me people would come expecting $1,500 even though they weren't in the will and his attorney would tell him it was cheaper to give it than to fight it (not sure if that is true or not). He wasn't too happy.

In some areas land is a big thing and when a family member passes on there are often huge, heated disputes over who gets what.

We got a fairly small family and there weren't any issues when my grandparents or my mother passed away. Hopefully things will be ok down the road when my father moves on. In my case I don't have a family but I did set up a trust to try and minimize the issues when I go. I'm certainly worth a lot more dead (houses, retirement accounts, insurance through work, etc.) so I tried to set up a few charities and a couple of family members.

Sadly you can't underestimate the greed in some people.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Halicar »

An anecdote from an acquaintance: lawyer looks over will of a person recently deceased and exclaims "This doesn't make any sense--who wrote this?" Turns to the end and sees that he wrote it.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by cheezit »

Some folks I know had this happen:

A woman with four children dies immediately before the subprime crisis, and her paid-off house constitutes ~90% of her assets. Her will stipulates that the house is valued at $X (about 2/3 of its pre-crisis market value), and "child A and her husband" get the house and are to take out a second mortgage for $0.75X and distribute $0.25X to each of the other three children.

Child A is unable to secure said mortgage because she and her husband have primarily non-W2 income and lending standards have recently been tightened. The husband quits his normal job that he has been working at for 15 years to start doing menial work that has W2 income so they can get the loan. Their marriage deteriorates, and they eventually divorce, with some extra drama added because they were jointly listed as receiving the house in the will. At some point they both move out, and nobody maintains the home for a year. During this time, a pipe bursts on an upper floor, and there is extensive water damage to the house. Eventually, the estate attorney is able to arrange a sale for $X/2, and has to use about a third of the sale proceeds to pay several years of back taxes and penalties. Children B,C and D each receive about $X/9 five years after their mother died. There were also some shenanigans with the other ~10% of her assets.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Tycoon »

I planned on getting a fortune from Prince Rainier III when he passed. It went terribly wrong.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by btenny »

I have good friend who is younger and a"trust fund" baby. Here dad and uncle started and owned a big mid west manufacturing company. She grew up rich and privileged with her two sisters. Her mom passed away when she was a kid and her dad remarried. The step mom had two kids of her own and all the kids were treated equal and raised together. Her dad and step mom lived like kings and her dad told her she would be taken care of for life, eg a trust fund.

Fast forward 20 years and she is an adult and her dad dies suddenly. My friend is married and working and spending a little from a small trust she got already. Three days after the funeral the step mom tells my friend to leave the Dads house and forget getting any money or stuff from the estate. Step mom says she is in charge now. She takes over running the business. The step mom took everything and has kept almost 100% of the estate for her two kids and gave none to the fathers three previous kids. She did not even speak to my friend (after all they were step kids) for 5 years after the father died even though she took care of my friend and her sisters as kids. My friend was very upset and hurt by all this lack of love and not talking and so forth. She says she did not care as much about the money but I am sure it would have helped. My friend is not rich or even well off. She is middle class. She has lived frugal and saved for all these years or it would be very tough for her now as she nears retirement.

Now 10 years or so after the Dad died the step mom is talking a little to my friend and her sisters. My friend is totally confused on how the handle the situation. It is a real mess. So beware what you wish for.

Good Luck.
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iamblessed
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by iamblessed »

stoptothink wrote: Tue Jan 22, 2019 10:17 am My grandfather was a very successful physician who owned a 15+ provider family practice. My mother worked for him for over 30 years, first as a medical assistant then the last 10yrs as office manager. He was an interesting guy, had Asperger's (like myself) and did not have any close relationships. My mother was probably the closest person on the planet to him. He remarried just a few years before his death, leaving his 2nd wife everything (from what I know, low 8-figures, including three properties individually worth well over $1M). 2-3yrs later my step-grandmother started suffering from dementia and was put in a home, all the sudden my mother's youngest (adopted) sister decided it was a good time to develop a relationship with the women she essentially didn't know. Step-grandmother passed about a year later, considering she had no blood family, my mother and her 6 other siblings assumed the assets would be split between them. Well, my aunt had managed to be named executor of the will: 7-figures was left to the church (including two $1M+ properties), very significant amounts were left to a gardener, the man who took care of their birds, the bishop of their church, one cousin (who we are pretty sure never actually met my step-grandmother), a gentleman that my grandfather had met on a trip to China (that nobody else in the family had any knowledge of), and the rest was left to my aunt. My mother and the other 5 siblings got nothing. Not sure how much she got, but it was well into 7-figures. My aunt was in her mid-40's and a SAHM, her husband was a public school teacher; he immediately retired, they did a ridiculous renovation on their home which more than doubled its size, they've bought several luxury cars, filled their now 4-car garage with 10's of thousands of dollars in bikes, and have spent the last 5-6yrs pretty much traveling the world on perpetual vacation. The best part is the constant social media barrage about how they scrimped and saved for years and are now enjoying the rewards of their delayed gratification.

Needless to say it caused some serious family drama, essentially destroyed a once very close large family. My uncle, who lives about 3 miles away, hasn't seen his sister in over 5yrs. About 7yrs later my mother (a saint) is the only sibling who hasn't totally written her off. I don't know that my mother was depending on the inheritance, but she is now 58 and has $0 in retirement. Her and my step-father have just resigned to the idea that they will work until they can't, and probably be somewhat dependent on my wife and I after that.
I was looking for stories like this.
fposte
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by fposte »

btenny wrote: Tue Jan 22, 2019 1:36 pm Three days after the funeral the step mom tells my friend to leave the Dads house and forget getting any money or stuff from the estate. Step mom says she is in charge now.
Just to be clear, because I'm curious--was this Dad not setting up the estate as he claimed, or Stepmom refusing to honor the will?
michaeljc70
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by michaeljc70 »

I would be most worried about long term care costs eating away at a potential inheritance. My parents are still married and in their 70s in good health so remarrying seems very unlikely.
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8foot7
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by 8foot7 »

cheezit wrote: Tue Jan 22, 2019 1:24 pm Some folks I know had this happen:

A woman with four children dies immediately before the subprime crisis, and her paid-off house constitutes ~90% of her assets. Her will stipulates that the house is valued at $X (about 2/3 of its pre-crisis market value), and "child A and her husband" get the house and are to take out a second mortgage for $0.75X and distribute $0.25X to each of the other three children.

Child A is unable to secure said mortgage because she and her husband have primarily non-W2 income and lending standards have recently been tightened. The husband quits his normal job that he has been working at for 15 years to start doing menial work that has W2 income so they can get the loan. Their marriage deteriorates, and they eventually divorce, with some extra drama added because they were jointly listed as receiving the house in the will. At some point they both move out, and nobody maintains the home for a year. During this time, a pipe bursts on an upper floor, and there is extensive water damage to the house. Eventually, the estate attorney is able to arrange a sale for $X/2, and has to use about a third of the sale proceeds to pay several years of back taxes and penalties. Children B,C and D each receive about $X/9 five years after their mother died. There were also some shenanigans with the other ~10% of her assets.
I didn't know you could bequeath an asset to someone but then force them to borrow against it and distribute a large portion of the proceeds to others.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Carefreeap »

MN-Investor wrote: Tue Jan 22, 2019 10:56 amMake sure you are explicit in the instructions in your will when it comes to personal property. If you want one child to have your great-aunt Tilly's diamond earrings, put that in the will.
Better yet give away personal property while you are alive. Many pieces of personal property have a way of "disappearing".
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michaeljc70
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by michaeljc70 »

Carefreeap wrote: Tue Jan 22, 2019 3:22 pm
MN-Investor wrote: Tue Jan 22, 2019 10:56 amMake sure you are explicit in the instructions in your will when it comes to personal property. If you want one child to have your great-aunt Tilly's diamond earrings, put that in the will.
Better yet give away personal property while you are alive. Many pieces of personal property have a way of "disappearing".
Recently, after my Grandpa's passing, my parents found a box of silverware on their porch. Apparently a sibling took it from Grandpa's house thinking it was silver and worth something and then didn't want it when they found out it wasn't!
michaeljc70
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by michaeljc70 »

Though the evil step mother or whoever seems to be the one that is vilified in a lot of these stories, it is really the fault of the deceased for not properly creating an estate plan to make sure their wishes are fulfilled. A trust that allocates x dollars per year (or the income or % of income from the trust) to the step mother and then the trust proceeds being distributed to the kids after her death is not that complicated or uncommon. Of course, there are people that want the step mother (their 2nd wife) to get everything and the kids are not happy about that but it went as intended.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by TheHouse7 »

I think a lot can be over estimated.

Older folks get into a "nice" long term care situation (5k per month). Then they move to the bottom floor for 24 hour care (10k per month). Then after years of luxurious living on the bottom floor, s/he passes and you realize you get a 1/4 of what little assets were left because they were living off of more pension/social security/military than you thought (and that all stops when they pass away).

Don't count chickens before they hatch. :P
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Isabelle77
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Isabelle77 »

How about this one? Husband is successful attorney, saves a few million for retirement but dies at 61. Wife remarries less than a year later to younger guy who lives with his parents and has a dubious work history, to say the least. Formerly frugal wife and new hubby buy new luxury cars, upgrade the house, fly first class around the world, stay in amazing hotels, and basically burn piles of money. Hubby a year later starts to make noises about divorce because...you guessed it...wife’s financial advisor is freaking out. Oh and there’s no pre nup! Conclusion to come.

But we never counted on anything anyway. At this point though formerly frugal wife will be living in my basement. :confused
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by CascadiaSoonish »

One branch of my family: husband and wife, two kids. Husband retires from a megacorp with a solid pension. Primary residence and a vacation house are paid for. Kids are a mess, though, nickel and dime their parents for cars and rent and expensive fly-by-night web-based 'degrees' and cosmetic surgeries, serial marriages, and difficulty holding down a job for any meaningful length of time. Dad makes a series of questionable decisions too; sells the houses at the bottom of the market, then sells their 'downsized' house at a loss, cashes out pension, takes out a reverse mortgage with punitive terms, while still buying a new car every year or so. And after a diagnosis of terminal cancer, elects to have expensive dental reconstruction work done. A decade later the husband has passed, widow has a negative net worth, and yet the kids still talk about what they're going to do with their 'inheritance' when it comes.
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Doom&Gloom
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Doom&Gloom »

Carefreeap wrote: Tue Jan 22, 2019 3:22 pm
MN-Investor wrote: Tue Jan 22, 2019 10:56 amMake sure you are explicit in the instructions in your will when it comes to personal property. If you want one child to have your great-aunt Tilly's diamond earrings, put that in the will.
Better yet give away personal property while you are alive. Many pieces of personal property have a way of "disappearing".
+1

Several years ago DW asked me if I would be willing to stay at MIL's home whenever MIL's funeral was in order to keep scavenging relatives from looting her home. MIL is still kicking but has distributed to various relatives everything of significant value in the home, so I am no longer on stand-by guard duty.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by CascadiaSoonish »

Now that I'm thinking about it, a few more stories.

Several decades ago. Married couple, grown children, modest but stable finances. Husband dies. A few years later, wife sells the vacation cabin that the husband built himself in the 50s and distributes the proceeds to the children. Then a few years after that, wife remarries. New husband tells her it is 'unladylike' to have financial assets in her name. Also tells her it's 'unladylike' to get mammograms. Wife gets breast cancer and passes. New husband is senile by this point but his pious 'family values' family pulls out all the stops to keep all of her assets, going so far as to threaten legal action if the proceeds from the long ago sold vacation cabin aren't included in the estate. Children receive maybe half of what they would have otherwise reasonably expected.

Close family friend works for years for a wealthy couple. Friend is paid a pittance but is told by the couple that she'll be taken care of in the will. Couple passes away, and the friend gets pocket change while the estate largely goes to charitable causes. Friend is left in a really terrible financial place at this point as she had spent many years working for this family and didn't have very many other marketable skills and passes away not too long after. Sense was that this was the last straw for her in a series of really difficult life challenges and she just gave up living.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by mptfan »

8foot7 wrote: Tue Jan 22, 2019 3:16 pm I didn't know you could bequeath an asset to someone but then force them to borrow against it and distribute a large portion of the proceeds to others.
There's a good reason why you did not know it...it's not true.
Last edited by mptfan on Tue Jan 22, 2019 5:14 pm, edited 2 times in total.
Dottie57
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Dottie57 »

CascadiaSoonish wrote: Tue Jan 22, 2019 4:56 pm Now that I'm thinking about it, a few more stories.

Several decades ago. Married couple, grown children, modest but stable finances. Husband dies. A few years later, wife sells the vacation cabin that the husband built himself in the 50s and distributes the proceeds to the children. Then a few years after that, wife remarries. New husband tells her it is 'unladylike' to have financial assets in her name. Also tells her it's 'unladylike' to get mammograms. Wife gets breast cancer and passes. New husband is senile by this point but his pious 'family values' family pulls out all the stops to keep all of her assets, going so far as to threaten legal action if the proceeds from the long ago sold vacation cabin aren't included in the estate. Children receive maybe half of what they would have otherwise reasonably expected.

Close family friend works for years for a wealthy couple. Friend is paid a pittance but is told by the couple that she'll be taken care of in the will. Couple passes away, and the friend gets pocket change while the estate largely goes to charitable causes. Friend is left in a really terrible financial place at this point as she had spent many years working for this family and didn't have very many other marketable skills and passes away not too long after. Sense was that this was the last straw for her in a series of really difficult life challenges and she just gave up living.
Sorry, but the close friend should have known better. Never, ever work for a pittance and believe in a future promise. Not worth the paper it is not written on.
btenny
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by btenny »

Yes I second the rich old aunt/grandma stories. Beware of their jewelry and get it written down. I had a rich old aunt who wore a set of 3 caret diamond earrings and about a 4-5 caret solitaire diamond ring her while life. They were sports figure big stuff and showy by 2000 standards and this was 1978 or so. When she passed we always wondered who got those things. None of my cousins owned up to having them or saying who got them.

She did not live near me so when she passed we were not involved with her estate. It was sad but she was sick for a long time. My aunt did not have any kids and only one surviving younger brother and lots of grand nieces and grand nephews. I know my uncles kids did great and inherited her farm and other stuff. But no one admitted getting the ring and ear rings.

Good Luck.
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Moneta »

lthenderson wrote: Tue Jan 22, 2019 10:00 am I had some relatives who were estranged from the rest of the family tell me I was getting a sizable inheritance. When they passed away, those estranged relatives came out of the woodwork and essentially fought everything every step of the way. I suppose I could have fought them in court but I really didn't care about the money nor did I want to get in the middle of a family tiff. So I just let them fight over it among themselves and said thanks when they gave me my share which turned out to be an afghan and a box of unsharpened number 2 pencils.
It's the "unsharpened" adjective that elevates this response to pure art.
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Alexa9
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Re: Has anyone see an inheritance not go as planned? I would like to hear stories from others of what can go wrong.

Post by Alexa9 »

This is what I’ve seen, it is just too much.
“Favorite” child getting everything.
Siblings that feel entitled that they are owed something.
Mess of accounts with poor records and a hoarder with greedy siblings.
Much older parent remarried. Changes will frequently depending on mood.
Do poor relatives deserve more than successful?
I would much rather gift while alive and see how it is put to use before gifting more.
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