Talking About Inheritance Planning in 2023

Values-Based Inheritance Planning

Inheritance is the third rail in financial planning. Absolutely no one wants to go there. Yet when you think about your financial circumstances ten, twenty, or even thirty years from now, you need to estimate, even roughly, any wealth you might inherit.  Without it, you’re flying blind whenever you answer important questions about your future.  For instance:

  • When can I afford to retire?
  • If I/we buy a more expensive house now, will the mortgage still be affordable, even without a regular paycheck?
  • Will we be able to send the kids to private colleges?
  • How will an inheritance impact my estate planning?

These are the kinds of issues that often prompt people, when they reach middle-age, to begin working with a financial planner. One or both of their parents may still be living. Whenever that changes, it will inevitably change their children’s retirement assets and estate plan. That’s why it’s so important, whether you’re single or a couple, to include inheritance as a component of your financial planning.

Breaking a Taboo

But many, if not most, people are loathe to raise the topic with their parents. Some families never talk about money. It would seem gauche to violate this taboo. In other families, such a conversation would open an emotional can of worms. There may be equity issues between siblings. (“Mom always liked you best.”) The picture may be even more complicated if there’s a disabled sibling, stepparent, or stepchildren in the picture.

You may have many reasons to avoid the topic of inheritance. You may see self-sufficiency as a badge of honor. Rather than “depending” on the estate that your parents sacrificed and worked hard to build, you are determined to stand on your own two feet.

No matter what your rationale, you’re doing yourself―and perhaps others―a disservice if talking about inheritance remains off limits.

How a Financial Planner Can Help

An experienced financial planner understands that you, like many other clients, might prefer to remain in the dark than to talk to your parent about an inheritance. Nevertheless, to be thorough, planners would benefit greatly by including even a rough estimate of potential inheritance in your financial plan. They can also suggest questions you might ask your parents to get the conversation going.

In most cases, children want what’s going to be best for their parents, including their financial well-being for however long they live. Parents, in turn, hope to leave as much as possible to their heirs. Parents also hope their children are making sound decisions about their own futures and would be glad to help them do it.

We're Here to Help You

Our professional practice is called financial planning, but it’s really life planning. Good financial planning involves working at the intersection of the empirical and the emotional to provide the context to ensure the plan reflects who you are, the specifics of your life and the things that matter most to you.

The result? You’ll be more likely to achieve your desired outcomes and gain peace of mind.

If you're looking for financial clarity, please don't hesitate to contact us for a complimentary consultation.

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