Should We Leave Our Children Inheritances?

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Jim's picture

Maybe ... maybe not. But:

  • To pass inheritance along to an unbeliever would be poor stewardship. Everything we have belongs to the Lord. 
  • Some, sadly, have disabled children. Their care would be a good use of a passed along inheritance.

An inheritance we were blessed by: When my Father-in-law passed back in 1990, we inherited his 1988 Crown Vic. We moved up from a 1983 Pontiac J2000 (we sold if for $ 500 or $ 600).

Bert Perry's picture

The author seems to have missed one big point of inheritances; it offered the parents the chance (if they took it) to participate in the moral development of their children into adulthood and where real money is at stake.  It's one place where the estate tax does good--it forces those in capital-intensive businesses (e.g. farming) to consider how they will pass down that capital before they die.   You get to hand over, say, five acres a year and help the son get the hang of the business.  

Another reality is the simple fact that most people, if they plan adequately for their retirement, are going to be leaving an inheritance for their children, or at least someone.  No?

To draw a picture, my grandmother passed on the land she grew up on to her grandsons to avoid some of the inheritance tax--that land provided the money that put us through college and allowed us to start adulthood without huge amounts of debt.  Somehow her example, and that of our parents, enabled us to have that resource without blowing it on fancy cars and such.  It can be done.

Aspiring to be a stick in the mud.

Jonathan Charles's picture

Look at these numbers:

Total savings and investments reported by retirees, not including value of primary residence or defined benefit plans such as traditional pensions:

Less than $1,000, 29%

$1,000 to $9,999, 17%

$10,000 to $24,999, 12%

$25,000 to $49,999, 8%

$50,000 to $99,999, 7%

$100,000 to $249,999, 11%

$250,000 or more, 17%

Source: Employee Benefit Research Institute

Thus, the typical retiree will only have a modest amount to leave to their children.  72% have less than $100,000, not including the value of their home. Isn't it scary that almost 1/3 have $1,000 or less?  Unless elderly parents are in the 1%, almost all inheritances would not permit an adult child to live on "easy street" the rest of his or her life.  At best, an adult child might pay off a mortgage, buy a new car and take a nice vacation.  I have no idea what I will have left when I am gone, but I would look forward to knowing that my children could do something with what I might leave them that would help them in some significant way.  

Jim's picture

Note ... it is 2 years old. 

banks contemplate $30 trillion flowing from boomers to Gen Y over the next 30 years, 


Accenture estimates that $30 trillion will pass from boomers to Millennials over the next 30 years, giving financial firms plenty incentive to court the kids. This transfer may or may not come to pass. At one time, Boomers were expected to benefit from a similar wealth transfer—some $41 trillion at the time of this writing. Then reality happened; incomes stagnated, people lost their jobs, and for buy-and-hold investors the stock market has been dead money for 13 years. More recent estimates put the boomer inheritance at $11.6 trillion.

josh p's picture

Another consideration is that with the increasing age of death the money is increasingly passing on to those who are well settled financially. If the parents die let's say in their mid eighties their children are likely around 60. If they have planned then they probably are already doing well financially and the money will make little appreciable difference in their lives.

Bert Perry's picture

Per Josh's point, there is a reason that the Scripture tells us that the righteous man gives an inheritance to his children's children, no?  And I would note as well that this would lead us (per Jim's point) to believe that grandparents ought then to take an active role in helping their kids grow to be productive, Godly people--or else risk creating a generation of "trust fund babies".

Aspiring to be a stick in the mud.