March 20, 2008
Where’s My Inheritance?
By Lee Brower
An attorney friend of mine shared a very telling experience he had with one of his clients. He had worked with a family for many years and had prepared for them a very complete “traditional” estate plan. The dad had started a business and sold it at the height of the dot-com market. He wanted his family to be involved in the use of the proceeds. The money helped pay for education, two family vacation homes, a few business opportunities and where needed. Mom and Dad became very involved in several charities and invited the children and grandchildren to participate as well. The kids were anxious to help out and the family met regularly to discuss various opportunities and needs. The attorney attended many meetings with the family over the years where the center of all topics was we … What should we do? Where should we invest our money? How can we maximize this investment for everyone’s benefit? Who should we help? He was very pleased with what had been accomplished and with the direction the family was taking. He felt the estate plan was very sound and met the needs and vision of the family.
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Where’s My Inheritance?
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The parents were in their 80’s when they passed away within the same year. Shortly thereafter the attorney attended the family gathering to discuss the disposition of the property. True to form and no real great surprise to the family, the bulk of the estate went to a family foundation to benefit the causes that mom and dad so dearly supported. The kids were left with there interests in various personal ventures, the vacation homes, a little bit of cash and a substantial amount of personal property to divvy up. He was very saddened at how the meeting was no longer about we, but had shifted to me. What about me? … Where is my share? … What am I going to do? … It was obvious to him that the kids had not been prepared for this and to his dismay he was watching the beauty of this family unravel and change from we to me right before his eyes.
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By taking the time to create a system that truly optimizes all of your assets, you will leave future generations adequately prepared to continue the “we” in the family.
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This trend of not endowing heirs with overwhelming wealth appears to be one that will be with us for some time. According to Steve Friess, in an article for the for the Christian Science Monitor, thousands of would-be heirs will get a similar message: Don’t plan on getting an inheritance. With expected life spans stretching longer and longer and the cost of health care skyrocketing, the idea of parents leaving largesse behind is becoming secondary to their using it to live as comfortably as possible and then leaving the rest to their favorite causes. There appears to be a new philosophy about passing on money that is much different from previous generations of wealth creators. More and more people believe their heirs will be better off if they have to make it on their own.
“Baby boomers are going to get hit with a series of bad economic shocks and bad reality checks, one of which is relatively low inheritances,” says Laurence Kotlikoff, an economist at Boston University who is an expert on bequest trends. Estimates have varied widely over the past decade as to how much wealth the pre-boomers would leave to their offspring, with some economists, at the height of the market bubble, predicting a staggering $136 trillion would be passed down in the next 50 years. A more moderate, though substantial $41 trillion seems to be a better estimate, according to American Demographics magazine.
As many as 46 percent of senior citizens over age 65 will live in nursing homes for some amount of time in the next 20 years, AARP says, costing as much as $100,000 a year. In many cases, children sell the family home they hoped to inherit to pay health bills.
The Quadrant Living Experience ™ is designed to resolve these problems. At the base of the Quadrant Living Experience are a number of proactive concepts:
- Estate planning is not just wills, trusts and related documents, its proactive family leadership.
- You have a stewardship responsibility to your wealth, which continues on after you’re gone.
- True Wealth consists of Core, Experience, Contribution and Financial assets.
- Families must utilize a system to optimize all of the components of True Wealth to assure responsible expansion.
- The transfer of financial wealth requires responsibility and stewardship.
By taking the time to create a system that truly optimizes all of your assets, you will leave future generations adequately prepared to continue the we in the family, doing good for generations to come.
