Did any inheritance make positive effect on your life?

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flyingaway
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Did any inheritance make positive effect on your life?

Post by flyingaway »

I will not receive any inheritance. In fact, I have been experiencing negative inheritance, as I give my parents some money every year to thank them for raising me.

I have reached financial independence and theoretically can retire at any time. I am doing my first so-called One-More-Year (OMY). In order to justify OMYs, I am mentally thinking that I make more money so that I may help my children if they experience financial difficulties. I was deeply worrying about my children's employments during this pandemic. Thankfully, they still hold their jobs, but one is very stressful and thinking about quitting his job.

If my help is not needed when they are young, they will likely receive some inheritance. I am not sure how my financial action will impact their life. I would like to hear some real begelhead (better first-hand) stories about financial assistance or inheritance making good or bad difference on children's life. I am not interested in the stories of Warren Buffett or Bill Gates, but the stories of upper middle class people.

P.S. I think if my children will not need my help within about 10 years, I can enlarge my spending.
awval999
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Re: Did any inheritance make positive effect on your life?

Post by awval999 »

I say this as a 34 year old father of a toddler and expecting another.

I begged my father (in truth my mother to let him) to retire this year at 62 at the end of this calendar year. We’ll see if he follows through. I do not need any inheritance nor would I want one dollar if it prevented him from enjoying even one day of retirement away from the job he hates.

In truth your money cannot protect them from the things that truly can ruin their life: a divorce, a disability, death. Everything else is just window dressing. All your money could ever buy is a nicer house or nicer neighborhood or better car, or private school.

I’m sure if you posed this question to your adult children, they would tell you to retire.
smitcat
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Re: Did any inheritance make positive effect on your life?

Post by smitcat »

flyingaway wrote: Sat Aug 15, 2020 10:41 am I will not receive any inheritance. In fact, I have been experiencing negative inheritance, as I give my parents some money every year to thank them for raising me.

I have reached financial independence and theoretically can retire at any time. I am doing my first so-called One-More-Year (OMY). In order to justify OMYs, I am mentally thinking that I make more money so that I may help my children if they experience financial difficulties. I was deeply worrying about my children's employments during this pandemic. Thankfully, they still hold their jobs, but one is very stressful and thinking about quitting his job.

If my help is not needed when they are young, they will likely receive some inheritance. I am not sure how my financial action will impact their life. I would like to hear some real begelhead (better first-hand) stories about financial assistance or inheritance making good or bad difference on children's life. I am not interested in the stories of Warren Buffett or Bill Gates, but the stories of upper middle class people.

P.S. I think if my children will not need my help within about 10 years, I can enlarge my spending.
Our story is similar to yours but we are aware of a number of folks where their inheritance's made an excellent impact.
YMMV
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vitaflo
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Re: Did any inheritance make positive effect on your life?

Post by vitaflo »

The financial help we received with the largest positive effect was not inheritance, but help with big ticket items, namely college and home. My parents paid for half my schooling. My MIL paid for all my wife's schooling. When we went to buy our first home my MIL paid for half our down payment (as a loan) so we could avoid PMI. When we went to pay off this loan when we sold the house, she said don't bother, and we used the equity to help fund our next home. We did not ask for these things, and have never asked them for money even when unemployed.

But those two things really helped us early in our careers when we weren't paid a lot, were in debt and just getting started. They have a huge compounding effect. At this point any inheritance we get won't really move the needle since we were set up for success early in our lives. So we tell our parents to please spend their money while they're still alive so they can enjoy their life. They've helped us out enough already.
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arcticpineapplecorp.
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Re: Did any inheritance make positive effect on your life?

Post by arcticpineapplecorp. »

think it depends on two factors:
1. how much money is inherited.
2. what/how the beneficiary will do with the money.

it's been said you can give so that the recipient can do anything, but not enough that they will do than nothing.

one child may be interested in financial matters, how to grow money, etc. and another may just want to buy stuff, not realizing money has to be managed. Million dollar lottery winners usually blow it because they never leared (even after getting money) how to manage it, and then it was gone. Even Morgan Housel wrote:
Was it really necessary to tell her that if you spend money on things, you will end up with the things and not the money?"

-Rhianna's former financial advisor, responding to being fired after the singer nearly went broke.
source: https://twitter.com/morganhousel/status ... 76?lang=en
guess s/he did need to tell her. Some people think the gravy train never leaves the station. Time for rude awakening.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
livesoft
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Re: Did any inheritance make positive effect on your life?

Post by livesoft »

I received a ladder. I use that ladder for cleaning out the gutters, trimming shrubs/trees, and a few other things. I would say that has made a positive affect on my life.

I received a relatively small inherited IRA. Most of my siblings cashed theirs in. I use the RMD to go out to dinner on my mother's birthday. The RMD amount is above Taco Bell, but below a good steak dinner for two.
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artgerst
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Re: Did any inheritance make positive effect on your life?

Post by artgerst »

I'm at the point in my life where I think about my kids and money constantly. I came from parents who were lower-middle class but worked hard and they ended up having more than enough money in their old age so we are/were fortunate there. My grandparents were poor (off the boat), living in subsidized housing and worked 7 days a week, and seeing them living in such conditions impacted my life/spending habits. My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth. I barely spend much. My kids are getting into the working world shortly and I believe they will get jobs because of their schools/degrees. We recently updated our wills, since our kids are past the point (over 18) where we need to worry about guardianship. When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money. Probably due to years of displaying my frugalness or something like that, they seem to have their heads on straight when it comes to money. Now, with respect to giving them money while we are alive, that is a constant conversation and I don't know the answer. We certainly have enough to give them money to buy a house outright and other things, but we have just been letting them be confined to a regular "normal" dose of spending money that most middle to middle-upper-class parents would do (e.g., paying for college, some spending money). I assume over the years we will feed them some money - I can see maybe helping with a down payment on a house and probably funding grandchildren's 529 plan, but I don't see more than that.
Normchad
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Re: Did any inheritance make positive effect on your life?

Post by Normchad »

artgerst wrote: Sat Aug 15, 2020 11:32 am I'm at the point in my life where I think about my kids and money constantly. I came from parents who were lower-middle class but worked hard and they ended up having more than enough money in their old age so we are/were fortunate there. My grandparents were poor (off the boat), living in subsidized housing and worked 7 days a week, and seeing them living in such conditions impacted my life/spending habits. My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth. I barely spend much. My kids are getting into the working world shortly and I believe they will get jobs because of their schools/degrees. We recently updated our wills, since our kids are past the point (over 18) where we need to worry about guardianship. When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money. Probably due to years of displaying my frugalness or something like that, they seem to have their heads on straight when it comes to money. Now, with respect to giving them money while we are alive, that is a constant conversation and I don't know the answer. We certainly have enough to give them money to buy a house outright and other things, but we have just been letting them be confined to a regular "normal" dose of spending money that most middle to middle-upper-class parents would do (e.g., paying for college, some spending money). I assume over the years we will feed them some money - I can see maybe helping with a down payment on a house and probably funding grandchildren's 529 plan, but I don't see more than that.
I also think about this a lot. I think giving money while I’m still alive would be more beneficial than after my passing. My fear is that it might somehow be detrimental in the long run.

I think I want to do it; I’m just not convinced yet. I’ll have to do more thinking.....

I only have one kid. And I figure they will get everything eventually anyway, so why not give when it’s most beneficial to them? On the other hand, I do believe in “make it on your own” mentality, and all that.....

I haven’t received any inheritances, and I don’t expect too. But if I did, at this point, it wouldn’t change anything in my life. It would just be more money in the bank.
smitcat
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Re: Did any inheritance make positive effect on your life?

Post by smitcat »

artgerst wrote: Sat Aug 15, 2020 11:32 am I'm at the point in my life where I think about my kids and money constantly. I came from parents who were lower-middle class but worked hard and they ended up having more than enough money in their old age so we are/were fortunate there. My grandparents were poor (off the boat), living in subsidized housing and worked 7 days a week, and seeing them living in such conditions impacted my life/spending habits. My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth. I barely spend much. My kids are getting into the working world shortly and I believe they will get jobs because of their schools/degrees. We recently updated our wills, since our kids are past the point (over 18) where we need to worry about guardianship. When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money. Probably due to years of displaying my frugalness or something like that, they seem to have their heads on straight when it comes to money. Now, with respect to giving them money while we are alive, that is a constant conversation and I don't know the answer. We certainly have enough to give them money to buy a house outright and other things, but we have just been letting them be confined to a regular "normal" dose of spending money that most middle to middle-upper-class parents would do (e.g., paying for college, some spending money). I assume over the years we will feed them some money - I can see maybe helping with a down payment on a house and probably funding grandchildren's 529 plan, but I don't see more than that.
"I assume over the years we will feed them some money - I can see maybe helping with a down payment on a house and probably funding grandchildren's 529 plan, but I don't see more than that."
What will be the purpose for the remaining funds?
artgerst
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Re: Did any inheritance make positive effect on your life?

Post by artgerst »

smitcat wrote: Sat Aug 15, 2020 11:44 am
artgerst wrote: Sat Aug 15, 2020 11:32 am I'm at the point in my life where I think about my kids and money constantly. I came from parents who were lower-middle class but worked hard and they ended up having more than enough money in their old age so we are/were fortunate there. My grandparents were poor (off the boat), living in subsidized housing and worked 7 days a week, and seeing them living in such conditions impacted my life/spending habits. My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth. I barely spend much. My kids are getting into the working world shortly and I believe they will get jobs because of their schools/degrees. We recently updated our wills, since our kids are past the point (over 18) where we need to worry about guardianship. When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money. Probably due to years of displaying my frugalness or something like that, they seem to have their heads on straight when it comes to money. Now, with respect to giving them money while we are alive, that is a constant conversation and I don't know the answer. We certainly have enough to give them money to buy a house outright and other things, but we have just been letting them be confined to a regular "normal" dose of spending money that most middle to middle-upper-class parents would do (e.g., paying for college, some spending money). I assume over the years we will feed them some money - I can see maybe helping with a down payment on a house and probably funding grandchildren's 529 plan, but I don't see more than that.
"I assume over the years we will feed them some money - I can see maybe helping with a down payment on a house and probably funding grandchildren's 529 plan, but I don't see more than that."
What will be the purpose for the remaining funds?
I now volunteer full-time with an extremely worthwhile charity that has given so much to me (I know I'm helping them, but just feeling like I'm helping others has been a blessing for me). The remaining funds will go to this charity.
Dottie57
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Re: Did any inheritance make positive effect on your life?

Post by Dottie57 »

I just inherited 1/2 of my parent’s IRA, bank accounts and house. The inheritance is a nice amount - enough to make it easier to move into a more age appropriate home.
Luckywon
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Re: Did any inheritance make positive effect on your life?

Post by Luckywon »

Many things could financially stress upper middle class people including health problems, divorce, lawsuit, fraud, economic disaster etc. An inheritance could be a buffer between misery and comfort.

An inheritance could also be passed on to the next generation after your beneficiaries whose needs you can't anticipate.
neverpanic
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Re: Did any inheritance make positive effect on your life?

Post by neverpanic »

vitaflo wrote: Sat Aug 15, 2020 11:19 am The financial help we received with the largest positive effect was not inheritance, but help with big ticket items, namely college and home. My parents paid for half my schooling. My MIL paid for all my wife's schooling. When we went to buy our first home my MIL paid for half our down payment (as a loan) so we could avoid PMI. When we went to pay off this loan when we sold the house, she said don't bother, and we used the equity to help fund our next home. We did not ask for these things, and have never asked them for money even when unemployed.

But those two things really helped us early in our careers when we weren't paid a lot, were in debt and just getting started. They have a huge compounding effect. At this point any inheritance we get won't really move the needle since we were set up for success early in our lives. So we tell our parents to please spend their money while they're still alive so they can enjoy their life. They've helped us out enough already.
I did inherit a small sum from my grandparents and every dollar went into the down payment on my first home. They would have wanted it that way.

I don't need or want a dime from my parents. For the past 20+ years - and I was poor 20 years ago - I have insisted that they should enjoy their lives. They're extremely tight with a dollar, but they do travel a little and take care of themselves. I've offered to renovate the home, get them a new roof, etc. and they've always refused. C'est la vie.
artgerst wrote: Sat Aug 15, 2020 11:32 am I'm at the point in my life where I think about my kids and money constantly. I came from parents who were lower-middle class but worked hard and they ended up having more than enough money in their old age so we are/were fortunate there. My grandparents were poor (off the boat), living in subsidized housing and worked 7 days a week, and seeing them living in such conditions impacted my life/spending habits. My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth. I barely spend much. My kids are getting into the working world shortly and I believe they will get jobs because of their schools/degrees. We recently updated our wills, since our kids are past the point (over 18) where we need to worry about guardianship. When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money. Probably due to years of displaying my frugalness or something like that, they seem to have their heads on straight when it comes to money. Now, with respect to giving them money while we are alive, that is a constant conversation and I don't know the answer. We certainly have enough to give them money to buy a house outright and other things, but we have just been letting them be confined to a regular "normal" dose of spending money that most middle to middle-upper-class parents would do (e.g., paying for college, some spending money). I assume over the years we will feed them some money - I can see maybe helping with a down payment on a house and probably funding grandchildren's 529 plan, but I don't see more than that.
This is an argument I'm beginning to have with myself now. Because of my background, I always believed kids had to learn how to earn on their own. But then I hear stories from well-to-do families about how the parents either buy the homes outright or otherwise provide a low-interest loan from the family trust even for second homes. If a parent has $500,000 sitting in a money market at 0.2% for whatever reason (a lot of people with a lot of cash may not be the best portfolio managers!), then why not give the kids a loan at 2%?

It's not my place to be concerned with anyone else's finances, but the example I'm closest to is that of a couple (age 40-41) getting close to $1 million from the family trust to buy a house. With a combined income of about $125,000 and only about $100K equity in their first house, they were not able to qualify for a mortgage big enough for their dream home.

It is gorgeous, but I have no idea what their plan is for paying the property taxes each year.

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

Enjoy life, leave a good legacy that will allow your children to magnify opportunities for their children, and so on.
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FIREchief
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Re: Did any inheritance make positive effect on your life?

Post by FIREchief »

artgerst wrote: Sat Aug 15, 2020 11:32 am My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth.

When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money.
Hopefully you realize that there are more reasons to leave money via a trust than ensuring that the heirs "would be practical even if they came into a very large amount of money." With your level of assets, you really should think about asset protections for your heirs.
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FIREchief
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Re: Did any inheritance make positive effect on your life?

Post by FIREchief »

awval999 wrote: Sat Aug 15, 2020 10:53 am Everything else is just window dressing. All your money could ever buy is a nicer house or nicer neighborhood or better car, or private school.
It could also pay for a child who became disabled at an early age to afford to stay out of low income housing in a poor neighborhood without being able to afford a car. It's all relative, and nobody knows the future.
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Katietsu
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Re: Did any inheritance make positive effect on your life?

Post by Katietsu »

awval999 wrote: Sat Aug 15, 2020 10:53 am
In truth your money cannot protect them from the things that truly can ruin their life: a divorce, a disability, death. Everything else is just window dressing. All your money could ever buy is a nicer house or nicer neighborhood or better car, or private school.
Please do not take this the wrong way, but this is a statement from someone who has always had enough money for basic needs. Without a loan or gift at certain crucial points in my early life, I would have been homeless or without needed healthcare.

Having a safety net can make a big difference in allowing someone to leave an abusive marriage or report inappropriate behavior at work. Even in less extreme situations, that safety net can make a difference in just whether or not a person risks a desired job change.

I do hope that none of these situations ever apply to the OP’s children. And the OP may already have enough to help their child through a temporary crisis or transition. I do agree that an adult child whose basic necessities of safe shelter, sufficient food, adequate access to healthcare, and quality childcare are met, should not want a parent to continue working so that they can have an “upgraded” lifestyle.
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LilyFleur
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Re: Did any inheritance make positive effect on your life?

Post by LilyFleur »

I am divorced, and retired early partly for medical reasons. My inheritance enabled me to help my children graduate debt-free from state universities as well as send them to short study abroad programs. They are both grateful as they know I live a modest lifestyle. They are both working very hard. I am teaching them how to manage money and the importance of saving for their own retirements. I hope to help them with down payments for houses someday. I also was able to, for the first time, travel to Europe with both children. Not lavishly, but without worry, and for that I am quite grateful. We all were quite amazed at the broadening, educational experience of travel. During my COVID isolation, I am happy for the memories of this travel. As they move into full-time jobs, they are less available for travel. They are both working on graduate degrees currently. My inheritance also enabled me to not worry about the $25,000 special assessment on my condo.
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Re: Did any inheritance make positive effect on your life?

Post by friar1610 »

I received a moderate inheritance from my parents who left everything to me (an only child). I think that if my mother had been a little more with-it in her final years she would have made provision for my two daughters, her only grandchildren, and for several charities.

Both of my daughters were in graduate school at the time my mother died. My deal with them had always been that we would pay for the bachelor's degrees (4 year time limit) and they would pay for grad school. So, they had both taken on a fair amount of debt to continue their educations. I gave them each enough from what my mother had left to me to clear their debt, figuring that's what my mother would have wanted. I told them that the money was their share of their grandmother's estate although technically it wasn't. So that had a positive effect on their lives because they didn't have to start their careers in debt.
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Gnirk
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Re: Did any inheritance make positive effect on your life?

Post by Gnirk »

I inherited from my widowed mother when I was 71, and the positive effect hasn't been a change in lifestyle; instead it has provided me with a sense of security .My family has a history of longevity with Alzheimer's (my mom in LTC for over 8 years, Great-Aunts for over 15 years), and I now know that I can self-insure for long term care in a good facility if I need it.

My mom did not provide directly to my daughters, but told me that if I wanted to share my inheritance with them, that would be up to me. I disclaimed a portion to each of my single daughters to use as a down-payment on their condos; I invested the rest.

If I don't need it, then my daughters will inherit.
Last edited by Gnirk on Sat Aug 15, 2020 1:26 pm, edited 3 times in total.
sean.mcgrath
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Re: Did any inheritance make positive effect on your life?

Post by sean.mcgrath »

I do plan to leave (hopefully) a fair amount to our kids, but to be honest my experience is that the financial "help along the way" is more important.

My grandmother was a widow with seven children who supported the family with her job as a secretary. I have no idea how she managed it, but when I was about five she gave my father enough money to buy a station wagon. It was a huge deal for our family.

We have had an easier time financially than my parents did, but still have had help along the way from my wife's family back when we were in our 30s. We didn't really need it, but it certainly was appreciated. On the other hand, by the time we inherit we will really have no use for it.

Hopefully, by the time our kids inherit, they will be retired and also will have no use for it. :)

If I decide to work OMY (or a couple), helping them out in their 30s might end up being the ostensible reason.
Katietsu wrote: Sat Aug 15, 2020 12:05 pm Without a loan or gift at certain crucial points in my early life, I would have been homeless or without needed healthcare.

Having a safety net can make a big difference in allowing someone to leave an abusive marriage or report inappropriate behavior at work. Even in less extreme situations, that safety net can make a difference in just whether or not a person risks a desired job change.
I also very much resonate with this. We have been fortunate to be able to help out family in tough times, and there is a huge amount to be said for a safety net.
Last edited by sean.mcgrath on Sat Aug 15, 2020 12:22 pm, edited 1 time in total.
SQRT
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Re: Did any inheritance make positive effect on your life?

Post by SQRT »

My wife received a mid 6 figure inheritance in her mid ‘40’s. At the time this really came in handy. I recently got a fairly small inheritance (about $75k) from my mother’s estate. Totally immaterial to me but I know it made a huge difference for my siblings. Spouse will get a low 7 figure Inheritance from her mother who is currently almost 92. I manage my MIL’s portfolio.

I gifted my daughter stock which was put towards a house down payment. Paid for her education, several cars over the years, initiation to private family oriented club. I think one of the best use of wealth is to give it away, pay it forward. Absolutely no detrimental affect on her personality or work ethic.
Last edited by SQRT on Mon Aug 17, 2020 3:31 pm, edited 2 times in total.
Minty
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Re: Did any inheritance make positive effect on your life?

Post by Minty »

My wife inherited about $200K 15 years ago from her mother, a third cash (insurance), the rest an IRA. That was a substantial portion of our net worth at the time, although we were both more-or-less established working professionals by then. We spent the insurance as living expenses while increasing our retirement and 529 contributions; still have the inherited IRA, as reduced by RMDs, but overall increased by the bull. It made our financial lives easier, we felt more comfortable, and it meant a lot to my wife and our children that grandma had provided for them. Accounting for inflation, what we spent would amount to less than 5% of our present net worth.

My mother netted a figure about twice that 20 years ago from her mother's estate. This has benefited her (and me) in that this nest egg is all she has in addition to Social Security, and the extra $12K necessary for a modest lifestyle comes from that (or would have to be provided by me and my siblings). The nest egg would have been much more had she not had it in a complex, underperforming 1.5% AUM arrangement for 15 years.
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FIREchief
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Re: Did any inheritance make positive effect on your life?

Post by FIREchief »

Katietsu wrote: Sat Aug 15, 2020 12:05 pm
awval999 wrote: Sat Aug 15, 2020 10:53 am
In truth your money cannot protect them from the things that truly can ruin their life: a divorce, a disability, death. Everything else is just window dressing. All your money could ever buy is a nicer house or nicer neighborhood or better car, or private school.
Please do not take this the wrong way, but this is a statement from someone who has always had enough money for basic needs. Without a loan or gift at certain crucial points in my early life, I would have been homeless or without needed healthcare.

Having a safety net can make a big difference in allowing someone to leave an abusive marriage or report inappropriate behavior at work. Even in less extreme situations, that safety net can make a difference in just whether or not a person risks a desired job change.

I do hope that none of these situations ever apply to the OP’s children. And the OP may already have enough to help their child through a temporary crisis or transition. I do agree that an adult child whose basic necessities of safe shelter, sufficient food, adequate access to healthcare, and quality childcare are met, should not want a parent to continue working so that they can have an “upgraded” lifestyle.
+1. (you said it better than I did :sharebeer )
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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flyingaway
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Re: Did any inheritance make positive effect on your life?

Post by flyingaway »

Katietsu wrote: Sat Aug 15, 2020 12:05 pm Please do not take this the wrong way, but this is a statement from someone who has always had enough money for basic needs. Without a loan or gift at certain crucial points in my early life, I would have been homeless or without needed healthcare.

Having a safety net can make a big difference in allowing someone to leave an abusive marriage or report inappropriate behavior at work. Even in less extreme situations, that safety net can make a difference in just whether or not a person risks a desired job change.

I do hope that none of these situations ever apply to the OP’s children. And the OP may already have enough to help their child through a temporary crisis or transition. I do agree that an adult child whose basic necessities of safe shelter, sufficient food, adequate access to healthcare, and quality childcare are met, should not want a parent to continue working so that they can have an “upgraded” lifestyle.
We paid full expenses for our children's college education.

One reason for us to do OMYs is that our jobs are relatively easy (teaching and research), while my children's current jobs are quite stressful and sometimes extend into weekends. We could probably help them if they decide to switch to some less stressful jobs with less money, which was mentioned by my younger son with his first job one year after college. He did not ask for any help, just mentioned we might quit his current job and find a less stressful one, which is not an easy task in the current environment.
artgerst
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Re: Did any inheritance make positive effect on your life?

Post by artgerst »

FIREchief wrote: Sat Aug 15, 2020 12:03 pm
artgerst wrote: Sat Aug 15, 2020 11:32 am My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth.

When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money.
Hopefully you realize that there are more reasons to leave money via a trust than ensuring that the heirs "would be practical even if they came into a very large amount of money." With your level of assets, you really should think about asset protections for your heirs.
Yes, this is a great point and thanks for sharing it. It's been on our to do list but have been waiting until after covid. I thought I could do everything as TOD but Vanguard doesn't do this with joint accounts and having a trust will make it easier.
delamer
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Re: Did any inheritance make positive effect on your life?

Post by delamer »

Timing is everything.

My parents gifted me the downpayment to buy my first home, when I was in my late 20’s. I definitely would have needed to delay that purchase if they hadn’t given me that money.

When I was in my early 60’s, I inherited a much, much larger amount of money from them when my mother died. About 25 times more in real dollars, in fact.

But the downpayment money had a bigger effect on my financial life than the inheritance, despite the difference in dollars.

Because the downpayment came when I needed it, while the inheritance came when I already was financially secure and established.
stan1
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Re: Did any inheritance make positive effect on your life?

Post by stan1 »

My father passed away when I was 31 a number of years ago. He left me a $75,000 insurance policy.

Was it life changing? No, but from that point forward I felt I was financially secure and we haven't had to "save up" for any need or want because we've effectively borrowed from ourselves when we needed to buy something like a car or make a home down payment.
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FIREchief
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Re: Did any inheritance make positive effect on your life?

Post by FIREchief »

artgerst wrote: Sat Aug 15, 2020 1:05 pm
FIREchief wrote: Sat Aug 15, 2020 12:03 pm
artgerst wrote: Sat Aug 15, 2020 11:32 am My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth.

When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money.
Hopefully you realize that there are more reasons to leave money via a trust than ensuring that the heirs "would be practical even if they came into a very large amount of money." With your level of assets, you really should think about asset protections for your heirs.
Yes, this is a great point and thanks for sharing it. It's been on our to do list but have been waiting until after covid. I thought I could do everything as TOD but Vanguard doesn't do this with joint accounts and having a trust will make it easier.
"Easier" might be just moving to Fidelity where they have a more robust beneficiary designation system/process. Vanguard's refusal to allow TOD on joint accounts has baffled many of us for years. It was one of the main reasons I consolidated at Fidelity. That said, a trust won't be easier but it will potentially provide your heirs with valuable asset protections in the event they are sued. Sure, lawsuits are unlikely; but the probability increases exponentially if/when the wrong person finds out that the heirs have millions in vulnerable assets. A properly drafted trust that provides the beneficiary(s) with effective control is very highly recommended for heirs with the level of assets that (I assume) you intend to leave them. Please see my signature.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
1rl9DS5gl2
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Re: Did any inheritance make positive effect on your life?

Post by 1rl9DS5gl2 »

A pair of brothers I knew in college inherited sizable amounts in their early 20's (low 6 figures, but this was in the mid 60's). It was enough that each of them was able to put off settling down and assuming adult responsibilities for 10-15 years. It literally ruined their lives and I don't believe either one of them ever really recovered. I inherited $225,000 from my father when I was in my late 40's. I had already established a career and was a functioning adult. I used the money to defray the costs of my 2 kid's college education. It was extremely helpful and part of the reason I will be able to pay it forward by doing the same for my grandkids whether or not I live long enough to see it with my own eyes. I'm extremely grateful.
delamer
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Re: Did any inheritance make positive effect on your life?

Post by delamer »

FIREchief wrote: Sat Aug 15, 2020 1:37 pm
artgerst wrote: Sat Aug 15, 2020 1:05 pm
FIREchief wrote: Sat Aug 15, 2020 12:03 pm
artgerst wrote: Sat Aug 15, 2020 11:32 am My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth.

When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money.
Hopefully you realize that there are more reasons to leave money via a trust than ensuring that the heirs "would be practical even if they came into a very large amount of money." With your level of assets, you really should think about asset protections for your heirs.
Yes, this is a great point and thanks for sharing it. It's been on our to do list but have been waiting until after covid. I thought I could do everything as TOD but Vanguard doesn't do this with joint accounts and having a trust will make it easier.
"Easier" might be just moving to Fidelity where they have a more robust beneficiary designation system/process. Vanguard's refusal to allow TOD on joint accounts has baffled many of us for years. It was one of the main reasons I consolidated at Fidelity. That said, a trust won't be easier but it will potentially provide your heirs with valuable asset protections in the event they are sued. Sure, lawsuits are unlikely; but the probability increases exponentially if/when the wrong person finds out that the heirs have millions in vulnerable assets. A properly drafted trust that provides the beneficiary(s) with effective control is very highly recommended for heirs with the level of assets that (I assume) you intend to leave them. Please see my signature.
The protection extends to the event of a divorce or a need for Medicaid benefits.
msj16
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Re: Did any inheritance make positive effect on your life?

Post by msj16 »

My adult child has a medical problem and while he is quite smart and likely to have career success, his medical concerns makes life uncertain for him. I plan on working as long as I can which will allow me to give him enough money that he could potentially early retire if he needed to (not wanted to). I am already training him on how to manage money properly so I don't worry that it will have a negative effect on him. You never know what the future will bring - getting cash yearly from parents or getting an inheritance is a wonderful safety net.
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Doom&Gloom
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Re: Did any inheritance make positive effect on your life?

Post by Doom&Gloom »

I inherited a relatively small sum from my parents in my early 20s. The executor of their estate, a family friend, advised me to invest it and not touch it. I knew nothing about stocks or bonds, but I followed his advice. For 10 years or so I acted as if that money was untouchable. I do wish I had known more about what I was doing with it though. Oh well. After that, I realized that I could be more selective about earning money--that I didn't have to chase the highest paying job or one that I didn't enjoy. That relatively small inheritance made a huge difference in my subjective quality of life.

At a recent HS reunion I saw a friend I hadn't seen since HS. Turned out he had been in prison in a couple of different states on drug charges but was currently in recovery. He made several references of "blowing through the money" which was his inheritance received about the same time as mine--probably about the same amount or slightly less.

Similar situations; very different results. I guess the answer to the OP is "It depends."
Marylander1
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Re: Did any inheritance make positive effect on your life?

Post by Marylander1 »

I inherited a Beneficiary IRA when my parents died. About 10 years later, a faulty root canal led to major medical crisis resulting in large medical bills and income collapse. Family and friends loaned money to stay afloat, and I configured that account to repay them as beneficiaries if I didn't survive. After several years, I recovered, returned to employment, repaid them, and my spouse is the beneficiary on that account, from which I still take RMDs. My parents would be happy with how that went.

Marylander1
marcopolo
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Re: Did any inheritance make positive effect on your life?

Post by marcopolo »

FIREchief wrote: Sat Aug 15, 2020 1:37 pm
artgerst wrote: Sat Aug 15, 2020 1:05 pm
FIREchief wrote: Sat Aug 15, 2020 12:03 pm
artgerst wrote: Sat Aug 15, 2020 11:32 am My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth.

When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money.
Hopefully you realize that there are more reasons to leave money via a trust than ensuring that the heirs "would be practical even if they came into a very large amount of money." With your level of assets, you really should think about asset protections for your heirs.
Yes, this is a great point and thanks for sharing it. It's been on our to do list but have been waiting until after covid. I thought I could do everything as TOD but Vanguard doesn't do this with joint accounts and having a trust will make it easier.
"Easier" might be just moving to Fidelity where they have a more robust beneficiary designation system/process. Vanguard's refusal to allow TOD on joint accounts has baffled many of us for years. It was one of the main reasons I consolidated at Fidelity. That said, a trust won't be easier but it will potentially provide your heirs with valuable asset protections in the event they are sued. Sure, lawsuits are unlikely; but the probability increases exponentially if/when the wrong person finds out that the heirs have millions in vulnerable assets. A properly drafted trust that provides the beneficiary(s) with effective control is very highly recommended for heirs with the level of assets that (I assume) you intend to leave them. Please see my signature.
Can you have "effective control" and asset protection?
I thought it was one or the other.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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bertilak
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Re: Did any inheritance make positive effect on your life?

Post by bertilak »

Receiving an inheritance gave me a sense of responsibility. I felt (and still feel) the money belongs to the family and I need to manage it responsibly.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
QBoy
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Re: Did any inheritance make positive effect on your life?

Post by QBoy »

Inheriting about $250K (in today's dollars) while in college allowed me to pursue four years of graduate studies without thinking much about money. That investment in human capital has earned the highest return of any investment I have ever made.
marcopolo
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Re: Did any inheritance make positive effect on your life?

Post by marcopolo »

When my father passed away many years ago, he left half their assets in a trust (other half went to mom, who is still living well).

The trust was setup to provide HEMS like support to me and my siblings with a portion of it. The remainder of the trust was set aside to be used for charitable giving to worthy causes as determined by the other beneficiaries.

We have been distributing money from this trust to educational scholarships, disaster relief, and a few other areas for over 20 years. This helped me and my siblings get a greater appreciation for charitable work and giving back to society. I think it was very nice legacy, much more impactful than if he had simply left it all to his kids.
Once in a while you get shown the light, in the strangest of places if you look at it right.
quantAndHold
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Re: Did any inheritance make positive effect on your life?

Post by quantAndHold »

I received mid-6 figures in my early 50’s, when I was already in good financial shape. It allowed me to retire a couple of years earlier than I would have otherwise, which was nice, but not life changing.

We paid for our kids’ college and they all are successfully launched and doing well. I wouldn’t expect what they will inherit from us to be life changing for them, either. The way our trust is currently written, they would split half of the estate, and the other half would go to charity. Since I’m still in my 50’s, I suspect that we’ll revisit that decision another time or three. We’ll adjust depending on everyone’s situation as things play out.
Yes, I’m really that pedantic.
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FIREchief
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Re: Did any inheritance make positive effect on your life?

Post by FIREchief »

marcopolo wrote: Sat Aug 15, 2020 1:56 pm
FIREchief wrote: Sat Aug 15, 2020 1:37 pm
artgerst wrote: Sat Aug 15, 2020 1:05 pm
FIREchief wrote: Sat Aug 15, 2020 12:03 pm
artgerst wrote: Sat Aug 15, 2020 11:32 am My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth.

When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money.
Hopefully you realize that there are more reasons to leave money via a trust than ensuring that the heirs "would be practical even if they came into a very large amount of money." With your level of assets, you really should think about asset protections for your heirs.
Yes, this is a great point and thanks for sharing it. It's been on our to do list but have been waiting until after covid. I thought I could do everything as TOD but Vanguard doesn't do this with joint accounts and having a trust will make it easier.
"Easier" might be just moving to Fidelity where they have a more robust beneficiary designation system/process. Vanguard's refusal to allow TOD on joint accounts has baffled many of us for years. It was one of the main reasons I consolidated at Fidelity. That said, a trust won't be easier but it will potentially provide your heirs with valuable asset protections in the event they are sued. Sure, lawsuits are unlikely; but the probability increases exponentially if/when the wrong person finds out that the heirs have millions in vulnerable assets. A properly drafted trust that provides the beneficiary(s) with effective control is very highly recommended for heirs with the level of assets that (I assume) you intend to leave them. Please see my signature.
Can you have "effective control" and asset protection?
I thought it was one or the other.
I was indirectly quoting bsteiner, our resident expert. I'll defer to his expertise and not question this. That said, a lot of it depends upon your state's laws. In my state, the beneficiary can currently serve as sole trustee with little or no risk to asset protections of a trust. I make this statement based upon excellent legal guidance from a local attorney, not just something I read on the internet. That said, others with such questions should likely pursue the same type of guidance. 8-)
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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FIREchief
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Re: Did any inheritance make positive effect on your life?

Post by FIREchief »

delamer wrote: Sat Aug 15, 2020 1:41 pm
FIREchief wrote: Sat Aug 15, 2020 1:37 pm
artgerst wrote: Sat Aug 15, 2020 1:05 pm
FIREchief wrote: Sat Aug 15, 2020 12:03 pm
artgerst wrote: Sat Aug 15, 2020 11:32 am My wife and I have been more than fortunate and now in my early 50's I'm retired with 8 figures of net worth.

When it came to determining if they should get an inheritance upon our deaths we thought about Trusts and just a plain will. We ended up just having a will and leaving it to them straight away. I realized that we had raised good kids who would be practical even if they came into a very large amount of money.
Hopefully you realize that there are more reasons to leave money via a trust than ensuring that the heirs "would be practical even if they came into a very large amount of money." With your level of assets, you really should think about asset protections for your heirs.
Yes, this is a great point and thanks for sharing it. It's been on our to do list but have been waiting until after covid. I thought I could do everything as TOD but Vanguard doesn't do this with joint accounts and having a trust will make it easier.
"Easier" might be just moving to Fidelity where they have a more robust beneficiary designation system/process. Vanguard's refusal to allow TOD on joint accounts has baffled many of us for years. It was one of the main reasons I consolidated at Fidelity. That said, a trust won't be easier but it will potentially provide your heirs with valuable asset protections in the event they are sued. Sure, lawsuits are unlikely; but the probability increases exponentially if/when the wrong person finds out that the heirs have millions in vulnerable assets. A properly drafted trust that provides the beneficiary(s) with effective control is very highly recommended for heirs with the level of assets that (I assume) you intend to leave them. Please see my signature.
The protection extends to the event of a divorce or a need for Medicaid benefits.
I didn't mention divorce so as not to spark a discussion about inherited assets being excluded from divorce settlements. That said, it certainly can't hurt to have them in a trust! 8-) Good point about Medicaid benefits.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
JS-Elcano
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Re: Did any inheritance make positive effect on your life?

Post by JS-Elcano »

I come from a country and financial background where "leaving/getting an inheritance" was basically unheard of. If a family was very wealthy they had a house and would pass this on to the kids who would then move into this house (or already live there with their parents), rather than sell it. Now that I live here in the US I realize that it's very different and most of my friends and colleagues *know* they will get inheritances. They "know" they will get a million or two and they know they will be set in retirement, so they spend every penny they make (except for some token amounts in pretax retirement plans at work to get the match) without a care in the world. They have a completely different relationship to money than I have or friends who also know they won't get a substantial inheritance. I am not saying their relationship with money is not good, but they have no concept of saving and providing for their own future. It does seem odd to me because what inheritance will they pass onto their children?
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FIREchief
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Re: Did any inheritance make positive effect on your life?

Post by FIREchief »

JS-Elcano wrote: Sat Aug 15, 2020 2:23 pm Now that I live here in the US I realize that it's very different and most of my friends and colleagues *know* they will get inheritances. They "know" they will get a million or two and they know they will be set in retirement, so they spend every penny they make (except for some token amounts in pretax retirement plans at work to get the match) without a care in the world.
How do these people "know" that they will inherit millions of dollars? Do the parents open up their financial statements to them? Do the parents make promises that they might not be able to keep? :confused

Also, unfortunately, a million dollars may not equate to "set in retirement" for many people, especially if they don't otherwise save any money.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Artful Dodger
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Re: Did any inheritance make positive effect on your life?

Post by Artful Dodger »

Yes, it was positive. Came around the same time as our first daughter headed to college and a couple of years before the 2008 financial meltdown. As my investments ended up declining 50% during this time, it was very nice to have.

I plan to leave something for my kids.
Lee_WSP
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Re: Did any inheritance make positive effect on your life?

Post by Lee_WSP »

I don't know, I haven't inherited anything yet.

But I have thought a lot about estate planning.

In most people's situations, their children will be quite old by the time they pass, the odds tip further towards this outcome if one has a large inheritance to pass on.

Inter vivos transfers are much more important. Things like schooling, time spent with the children, vacations, trips, enriching activities, etc.

Who a large inheritance would impact the most would be someone who needs a large cash outlay for something, say house, schooling, car, business opportunity, etc. Unfortunately, not all of those ends up well. And since we'll be dead, it's hard to say if the money would be well spent.

Another option is to ensure one's grandchildren never have to be homeless or something like that. But this would require a large trust.

If it's a moderate amount of money, I say just pass it on and let your children decide what to do with it, we'll be dead. They should be at least 40 by then. All, IMO.
prairieman
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Re: Did any inheritance make positive effect on your life?

Post by prairieman »

We inherited in a way that was a huge benefit to both us and my mother-in-law before she died. She was terribly lonely after her husband died but we had no space for her to move in with us. We decided to each sell our houses and go in 50/50 on a new house that we could live in comfortably together and that my wife and I would be happy to stay in after she passed away. She gifted her half in cash and filled out a 709 so that there would be no title transfer or probate issue. We also agreed to handle everything - utilities, snow, lawn, so that she no longer had to deal with that.
She got to live her last years with us in a house we all loved - and in which we still live in today. Anybody who gets along well with their elderly parent should consider doing the same.

FWIW, the idea came about because we were thinking of moving anyway and this gave her mom a way to live with us and still feel like she was paying her way - which always was important to her.
“As long as the roots are not severed, all is well.” Chauncey Gardner
JS-Elcano
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Re: Did any inheritance make positive effect on your life?

Post by JS-Elcano »

FIREchief wrote: Sat Aug 15, 2020 2:27 pm
JS-Elcano wrote: Sat Aug 15, 2020 2:23 pm Now that I live here in the US I realize that it's very different and most of my friends and colleagues *know* they will get inheritances. They "know" they will get a million or two and they know they will be set in retirement, so they spend every penny they make (except for some token amounts in pretax retirement plans at work to get the match) without a care in the world.
How do these people "know" that they will inherit millions of dollars? Do the parents open up their financial statements to them? Do the parents make promises that they might not be able to keep? :confused

Also, unfortunately, a million dollars may not equate to "set in retirement" for many people, especially if they don't otherwise save any money.
Not exact numbers, but ball park they seem to know. I agree that a million is unlikely to be enough for people who been spending without much concern their entire lives, so they may be in for a surprise.
Sic Vis Pacem
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Re: Did any inheritance make positive effect on your life?

Post by Sic Vis Pacem »

My wife inherited a mid 6-figures around 3 years ago, in her early thirties. She and I had already paid off significant school loans and purchased our first home at the time. We both have had strong salary progression and likely will continue to do so for some time. So, we were in good financial shape at the time.

We've traveled a little more than we might have otherwise with our young and growing family. We've also given a lot more to charity. And we're funding 529 accounts for our child, our little one expected in spring, and my nephew. The vast majority of it is invested in a boglehead portfolio. The biggest positive effect is that we can model out financial independence scenarios starting in our mid-40s, and that has lead us to deep thinking on what we want to do with our lives and contribute to this world once we no longer need our current careers for living expenses. That's certainly not to say either of us plan to stop working, or even working in the careers we're in, but knowing our options could be wide open in 10-15 years is definitely a positive effect.

We did not want an inheritance, we did not expect one, but we sure plan to make the most of it.
delamer
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Re: Did any inheritance make positive effect on your life?

Post by delamer »

JS-Elcano wrote: Sat Aug 15, 2020 2:23 pm I come from a country and financial background where "leaving/getting an inheritance" was basically unheard of. If a family was very wealthy they had a house and would pass this on to the kids who would then move into this house (or already live there with their parents), rather than sell it. Now that I live here in the US I realize that it's very different and most of my friends and colleagues *know* they will get inheritances. They "know" they will get a million or two and they know they will be set in retirement, so they spend every penny they make (except for some token amounts in pretax retirement plans at work to get the match) without a care in the world. They have a completely different relationship to money than I have or friends who also know they won't get a substantial inheritance. I am not saying their relationship with money is not good, but they have no concept of saving and providing for their own future. It does seem odd to me because what inheritance will they pass onto their children?
If “most” of your friends and colleagues expect to get a million dollars or more in inheritances, you move in rarified circles.

From this link: https://www.newretirement.com/retiremen ... -to-heirs/

When you break down average inheritance by the economic status of the household, the numbers look very different. According to analysis by Demos:

The least wealthy group of families have received, on average, $6,100 in inheritance.
The wealthiest 1 percent of families have received, on average, $2.7 million in inheritance.
A further breakdown of these numbers reveals that: “the wealthiest 1 percent of families have inherited $447 for every $1 the least wealthy group of families has. Those in the middling wealth ranges—$25k–$50k, $50k–$100k, and $100k–$250k—have received inheritances of $14.8k, $22.5k, and $51.4k respectively.”


So don’t assume that most Americans are like the people you know.
stoptothink
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Re: Did any inheritance make positive effect on your life?

Post by stoptothink »

Never received a penny and have helped my mom and (more significantly) my in-laws financially since I started working. I think not getting an inheritance or help financially with anything (school or otherwise) is one of the primary reasons I became the person I am. We have become "wealthy" by most standards, and as much as I'd love for my kids to develop the grit and work ethic I have, they are rich kids (at 8 and 5, they don't know it yet) so those characteristics are up to my wife and I (and not life) to try to develop. This is something the wife and (both of us grew up in poverty) have discussed countless times, how do we raise wealthy kids when we grew up so totally differently?
bacon4retirement
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Re: Did any inheritance make positive effect on your life?

Post by bacon4retirement »

Various inheritances my parents received provided seed money to buy a home, start a business, as well as allowed them to send me to private school. Although I have received additional inheritance/living wealth transfers as an adult, the early effects of a better child have allowed me find a job that mades this further monetary inheritance unnecessary.

On of my siblings chose a lower paying service career, and inheritance/living wealth transfers definitely made the difference of them being able to buy a starter house, then later upgrading to a house with a room for each kid.

Overall I think intergenerational wealth transfers have had pretty big impact on my life, and are likely reason I am actually in the upper-middle class.
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