|By FRAN HAWTHORNE|
With the tug of remembrance strong, it took her a couple of years “to be emotionally ready to sell the house,” recalled Ms. Cornell, 50. A calculation of the cost of upkeep, plus a visit to the empty homestead, finally convinced her. “I realized that by selling the house, I wasn’t selling my parents’ spirit, and I wasn’t selling my memories,” she said.
Heirs have been struggling with the impact of inheritance at least since Jacob bought the right to be recognized as firstborn from Esau in the Book of Genesis. But there have never been as many heirs with as much money as now, thanks to the intersection of two demographics: the 79 million baby boomers and the general thriftiness of their Depression-raised parents.
In significant ways, this cohort is different from heirs throughout history and also from recipients of other windfalls, including people who sell their business, win the lottery or negotiate big divorce settlements. They are relatively older, they are probably inheriting from financially conservative parents and they are dealing with deep emotional reactions.
“Inherited money is sacred money,” said
While other so-called sudden money recipients can be of any age, those who inherit from parents are typically middle-aged or older. Depending on the amount, the newfound assets can open fresh possibilities just as “they’re looking at that shift stage of life when they’re going from career to the next career” or to retirement, said
After Ms. Cornell’s mother died in 2008, and then her father in 2009, the “several million dollars” that she received, along with Blue Blinds, allowed her to begin her media business while staying home with her three children, rather than having to find a full-time job outside.
For heirs, the emotions that come with sudden wealth can be a mix of guilt, loss, anger, regret, relief and hurt, perhaps stewed with long-simmering family rivalries and resentments.
Often, as with Ms. Cornell, emotional ties make heirs reluctant to alter a penny of their parents’ investment strategy or shed a single inch of property. “We’ve had clients who wanted to keep a stock that was part of the family’s wealth in memory of their parents, even if it’s causing a lack of diversification in the portfolio,” said
That attitude would be problematic enough with any generational changeover, since experts usually advise younger people to take more investment risk than their elders do. But the disparity is particularly extreme now, because boomers’ parents, scarred by the Depression, were especially cautious investors.
“I see a lot of clients in that Greatest Generation who keep huge amounts in their checking accounts —
Some heirs feel that “I inherited the money. I get to do what I want with it,” said
“There’s no right or wrong answer to this, as long as you are consciously making your decisions,” said
Nancy A., a retired dietitian in
“I didn’t want to take any risk with my mother’s money — that’s how I looked at it,” she recalled.</p>
Over time, however, “you think a little differently,” she continued. She eventually was able to accept the inheritance as her own and meld it with her other savings.
Ms. Bradley of the
Heirs could also endow a scholarship, name a room at a museum, or make some other philanthropic contribution. Such “naming rights” often cost less than
On the other hand, if the family relationship was strained,
It might seem that, unlike lottery winners, boomers have the advantage of planning ahead, knowing that a bequest is coming even if they cannot be sure exactly when. But experts say that their parents’ generation was often so tight-lipped about money that the offspring really have no idea what to expect. That lack of communication is a big mistake, advisers say. The parents must initiate the conversation,
Despite all the luxuries that an inheritance can confer, many boomers would probably agree with Nancy A., who said, “I would much rather have my mother’s company than her money.”
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