Aging Americans want to leave an inheritance, but don’t want to talk about it
The good news: you’ll have your family’s money someday. The bad news: You don’t know how much or how to handle it, because your family won’t talk about money.
While older Americans are positive about leaving money behind after they die, they aren’t talking about it with their loved ones. Twenty-five percent say it’s because they “haven’t thought about it,” while another 19 percent say they “don’t feel it’s appropriate,” according to investment group Ameriprise Financial.
“Estate planning and inheritance are inherently emotional and often uncomfortable topics of conversation, but addressing them head on as a family can prevent a lot of uncertainty and tension down the road,” says Marcy Keckler, VP of financial advice strategy at Ameriprise Financial. “Our message to anyone who hasn’t done so already is to seize the opportunity now to foster an honest and healthy dialogue with your loved ones.”
According to the survey, 83 percent of us want to leave a family inheritance but only 50 percent have a formal plan in place. Even more, 21 percent of parents have talked to their children about how much of an inheritance they will get. Most children won’t get the amount of money they think they will.
The hold-up: just talking!
Parents aren’t talking to their adult children about inheritance until absolutely necessary — if at all — and that usually comes when parents get really old. Parents avoid the talk because they don’t want to upset anyone, and children don’t raise the question because “they don’t believe it’s their place.”
That avoidance hurts everyone in the long run. Many adult children have no idea the value of their parents’ assets and estate. This creates huge misconceptions of the worth of their possible inheritances. Later, after parents or loved ones have passed, families have a hard time finding out what to do with their new wealth, whether it’s more or less than they expected.
And it’s not just inheritance talks that are problematic for families. It’s also death talks. Not talking about end-of-life plans hurts families most when they’re going through an intense grieving process. More than how much money will be passed along, families are avoiding talking about funeral expenses, burial expectations, and others. This can have a huge impact on loved ones and their bank accounts when they had no idea they would be responsible for it.
There’s also the other financial discussions, like debt, that families are avoiding, too. While you may not be legally obligated to pay a family member’s debt, that doesn’t mean creditors won’t come after you to try. You may not need to pay their debts, but if you were expecting an inheritance, your loved one’s estate may be used to pay off those debts, possibly leaving you with less than anticipated.
If you’re looking to alleviate a lot of family stress and debt long after you die, you may want to consider buying life insurance. It’ll help lower some costs for your family from any surprise expenses, and next-of-kin can keep any money left over.
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Article last modified on April 12, 2017. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Shhh: I’m Giving You Money - AMP.