Isabella and Lorenzo are siblings who have faced financial difficulties throughout adulthood. Both are in their 30s — she’s a divorced mom of three, and he’s a married father of two — and can barely make ends meet. They have only a few thousand dollars in savings between them.
Their 65-year-old mother, however, has not faced such challenges. She inherited a home and a substantial amount of money when her own mother died, and she was also the beneficiary of a life insurance policy when her husband (Isabella and Lorenzo’s father) passed away five years ago. After her husband died, the mother sold the family home, which had greatly appreciated in value since they bought it 40 years ago.
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That’s why Isabella was shocked when, on a recent phone call, her mother told her that she planned to spend every penny she had before she died, and leave nothing in her will to her two children. Her mother said she wanted to enjoy her golden years to the fullest, and had crafted a budget that would ensure she spent all her money.
Isabella thinks their mom is being selfish, while Lorenzo is worried she’s being reckless with her money. Should the siblings confront their mother about her retirement plans?
Reasons not to leave your children an inheritance
While the mother said that she was not leaving her children an inheritance because she wants to enjoy her money while she’s alive, there are various reasons parents may not want to leave their children any inheritance.
Some people may choose not to leave their adult children an inheritance because they believe it will make their children more self-sufficient, contribute to a strong work ethic or help ensure they don’t have an attitude of entitlement.
Parents may also worry that their adult children will not be able to manage the money they inherit, perhaps even believing their children will squander what they worked hard to pass on. Concerns about whether an adult child’s spouse will have access to the inherited money, especially if their relationship is not stable, is another reason parents may think twice about leaving an inheritance.
While Isabella and Lorenzo are their mother’s only children, and their mother has not remarried since their father’s death, some parents may opt out of leaving inheritances for fear that it might cause family strife. This can include not only infighting amongst siblings, but also between step-parents and children over who inherits what.
Read more: How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
Talking about inheritance is key
Isabella and Lorenzo may want to consider opening a dialogue with their mother about her plans to spend everything she has — not necessarily to change her mind for their own benefit, but to clarify her wishes and ensure she’ll be taken care of in her final days.
They could start the conversation by saying they’re concerned about her plans and whether they factor in the possibility she may face health issues as she ages and might even need in-home or nursing home care. According to KFF research, many Americans incorrectly believe that Medicare covers long-term care, when in fact, it covers only some skilled nursing facility care [1]. Medicaid, on the other hand, can cover long-term care services, but eligibility requirements may vary by state.
Isabella and Lorenzo should make it clear that neither of them are in any financial situation to be able to pay for their mother’s medical care, and that they would not be able to take time away from working to care for her. Doing so may encourage her to account for medical spending in her long-term plans, if she hasn’t already.
Isabella and Lorenzo could also ask their mother whether she plans to leave any inheritance to her grandchildren. Even if neither of them expects a personal inheritance, as parents this information is relevant to their own financial planning.
If their mother’s reluctance to offer them an inheritance is rooted in concern that their partners or future partners would attempt to cash in on it, Isabella and Lorenzo could provide assurances that, should they receive any inheritance, they would keep it separate from their marital finances.
Inheritance is a tricky subject that people often avoid, but it’s important to ask questions. Not talking about it makes it difficult for potential heirs to plan for their financial futures, especially when estate plans are kept secret.
It’s important to ensure that Isabella and Lorenzo’s mother will be taken care of for as long as she is alive. And while an inheritance would be welcome and provide both of them with financial relief, ultimately, it’s their mother’s decision what to do with her money.
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[1]. KFF. “The Affordability of Long-Term Care and Support Services: Findings from a KFF Survey”
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