Here's an interesting question a reader asked on my post titled Achieving Family Harmony in Estate Planning Part 1: Leave Your Estate in the Right Hands:
I have a more basic question - as an adult child, is inheritance my right - legal or moral?
My personal take is that there is no legal or moral obligation for parents to leave an adult child with any sort of inheritance. That said, I think parents should be responsible for helping a child/young adult "get established" in the financial world, which generally means helping them get through college. Even then though, there's certainly no legal obligation to do this and morally I don't think it's required either.
Having said that, I can say that we plan to not only get our kids through college but to help them financially in other ways if needed. We will NOT be a financial crutch for them (if you've read The Millionaire Next Door, you know doing this can hurt your kids dramatically), but maybe small gifts here and there as we get older and work to give away our estate rather than have them get a big lump sum at our deaths.
What's your take on the situation?
We've got a lot of cousins and extended family on my wife's side that have been pretty spoiled through their teenage years growing up in an affluent family--e.g., never had to pay for a (or replace a crashed) car, never paid a dime of their college room and board, etc.
Instead of being bitter (having paid for these things ourselves), it's actually quite sad to see them enter their adult lives living on handouts and completely unaware of their entitlement attitude. My wife and I want to teach our children sound money principles, and allow them to struggle a bit at first in order to appreciate where prosperity comes from (hard work). Even requiring them to cover (most of) the cost of their college education could teach them how to do it as efficiently as possible, maybe even work a part-time job on the side.
And hopefully, when all is said and done, they can appreciate and be good stewards of a decent gift we hope to give them a bit later in their lives. Now that I think about it, I think this is what my parents have done for me.
Posted by: Jonathan | May 19, 2009 at 04:07 PM
No, no, and no. The money is not yours. What if your parents fall ill and require hospital care? A nursing home? Would you deny them that to preserve "your" money? Prevent them from travelling or making purchases? Take the estate to court over a will that left money to a charity?
Inheritance is a gift, not a right. If you didn't earn it yourself, it's not yours, until and unless it is freely given.
Posted by: Jen | May 19, 2009 at 04:18 PM
From a moral perspective, it's not your "right" to have your parents leave things to you. It's not your "right" to acquire anything they own. It is, instead, their "right" to be able to leave things to you if they so choose. Or they can choose to leave everything to someone else (another relative, perhaps) or even to give it all to charity; I've known people with a lot of money who started a charity and left their children very little because they wanted their children to have to earn their own way and make their own mark. The rights are entirely with those who have the stuff, not with those who want the stuff.
From a legal perspective, in most states, if someone left a will, there's a minimum percentage that goes to their surviving spouse no matter what their will says, a minimum amount that goes to any MINOR children, and then everything else is distributed according to the will; if your parents intentionally left you out, you get nothing. (If their will was written before your birth, some states will assume the will was intended to include all children and just hadn't been updated, but others will not.)
If they didn't leave a will, the person they're currently married to gets 100%. If they didn't leave a will and aren't married, any previous spouse has a claim to 1/3 and all children get an equal share of what's left (for children who had already died, their share passes on to their descendants.)
Posted by: LotharBot | May 19, 2009 at 04:20 PM
i don't think it's a right but i think if you can leave assets to your family you should
Posted by: Carrie | May 19, 2009 at 04:23 PM
I would rather my children expect nothing and be surprised to receive something, than to expect a windfall. I think the latter promotes irresponsible saving in midlife.
Also, there is NO guarantee that my money would be used according to my wishes, which include helping our church and other ministries after my death.
Re "helping them out financially": don't make the mistake of "helping" them to achieve your (desired) level of affluence before they are ready and can support it. Eg, buying them a new first car (reliable, comfortable, safe) vs. an old one (probably a better match to their income and lifestyle).
Posted by: Smithy | May 19, 2009 at 04:38 PM
There is no legal right to an inheritance that I'm aware of. (Standard IANAL disclaimer.) To the best of my knowledge, a will determines where an inheritance goes. Intestacy , of course, is all about legal rights. The lesson here is clear.
Morally, I see no reason that parents should be obligated to provide funds to their kids upon their death. I'm a "Die Broke" advocate (read the book of the same name). I hope that the last check my parents write is to the undertaker... and that the check bounces.
Posted by: M | May 19, 2009 at 04:41 PM
It is certainly not your right but it is your parents decision.You would find right inheritance is so much ingrained in Indian culture that it seems to many that they have earned it...!
Posted by: RD @ Money Blog | May 19, 2009 at 04:56 PM
These are some very selfishly minded comments. This sort of Ayn Rand, every man for himself mindset shouldn't be focused on the inheritor, rather on the person leaving the inheritance. Simply because the most selfish generation (Baby Boomers) will leave their children, grand children and great grand children nothing but debt doesn't mean the concept of an inheritance is a bad thing. In fact, it can help your personal finances if you're focused on leaving something behind. It's an unfortunate reality that people really can't do that, but I wish more people my parents' age thought about what they left behind in the physical, as well as emotional and spiritual realms. Very sad.
Posted by: Joe Marchelewski | May 19, 2009 at 06:02 PM
In general I don't feel there is any moral obligation to leave money to your adult children. Its not the childs 'right' to get everything you've got when you pass away.
But on the other hand, if you've got assets then why not leave them to your immediate family if they need it? I wouldn't want to spoil them or give them a disincentive to achieve, but I also wouldn't want to disinherit my own children and give it strangers just to teach them the value of a dollar decades after they should have learned that lesson.
One exception I can think of is a family business. If the adult children follow their parents into the family business (including farms) then I do think there is an obligation to leave that business in the hands of the children. (assuming they're competent)
Posted by: Jim | May 19, 2009 at 06:23 PM
Article took a different turn than I expected. Not sure how an adult child can ever think they have a "right" to "receive" an inheritance, it is not their money and b/c they are adults the parents have no duty to support them. I thought this article was going to examine if one has a "right" to "give" an inheritance (as opposed to the state taking everything at death), a much more interesting question.
Posted by: Strick | May 19, 2009 at 07:10 PM
Joe,
I'm not a boomer. My parents are on the tail end of the boomer generation. And I expect, long in the future, to leave my kids with a solid but not huge inheritance. I just don't think kids are "entitled" to one; I think it's a decision every parent needs to make, and sometimes the best decision is something other than "I'll leave my kids a big chunk of cash". Some people will choose to die broke while giving their kids the best leg up possible during their lifetime, while others will choose to give their estate to some charity or other; this doesn't make them "selfishly minded". (I would caution against leaving your kids with a mound of debt -- this includes debt created through taxes and government spending -- but not against choosing not to give your kids a traditional inheritance.)
Furthermore, if your parents leave you out of the inheritance, whether for good or bad reasons, you have no right to complain. They're not obligated to give you anything, and you have no moral or legal right to claim anything of theirs. They might be selfish jerks for not giving their kids an inheritance, but that doesn't mean the kids have a legal or moral right to their parents not being selfish jerks.
Posted by: LotharBot | May 20, 2009 at 01:26 AM
My mother's worked hard all her life, first to raise several kids, then at a pink-collar job for a none-too-generous salary. If she wants to spend her last dime at her death, more power to her.
Posted by: Sarah | May 20, 2009 at 09:40 AM
(Actually, when I think about it, I *hope* she's not putting aside money for us. We are all fortunate enough to be educated, healthy adults with some kind of decent job. There's no reason she should be denying herself anything to help us out--we don't need it.)
Posted by: Sarah | May 20, 2009 at 09:41 AM
I'm not a lawyer (yet), but here's what I learned about estate law last semester...
Laws differ from state to state, but one thing is for sure: the right to dispose of or distribute property upon death is constitutionally protected; the right to receive property is not. A few states prohibit someone from disinheriting a spouse or minor children, but not many.
Intestacy laws (the laws that govern when someone dies without a will or dies without distributing all of their property in a will) also vary from state to state. Most divide the estate between the spouse and children first. If a person dies without a spouse or children, any parent of that person will inherit, followed by brothers and sisters, followed by grandparents and cousins. If none of the above are alive, the person's estate is collected by the state. Again, laws vary, but this is usually how it goes.
On a personal note, there are plenty of valid reasons people do not leave $$ to one person or another, including children. We should not judge people for their decisions, concluding that the behavior is immoral or otherwise.
Posted by: Salad Girl | May 20, 2009 at 11:46 AM
As a child, I want my parents to use their money for their own enjoyment. Go on a cruise, or see the world, or something. Like Sarah said, I want them to enjoy all their hard works.
As a parent, though, I would want to leave something for my kids. I love them and this is one way to show it, regardless of whether it's the law or not.
Posted by: snow_drops | May 20, 2009 at 12:50 PM
We kind of have a twist in our house. We have young children, ages 5 and 6, and my inlaws are constantly giving them money. I say we're taking the kids to get a haircut the kids get $20 each, for helping around the house $50, for breathing another $20 and for preschool graduation $100. My inlaws are immigrants and had no money when they came to the states, worked hard in the restaurant and tailor business as well as not spending a dime on themselves. DH and I both feel that my inlaws are too generous and showy about the money. We feel it impedes our ability to teach our kids that money isn't everywhere and we don't have unlimited funds and sometimes you have to put off something because you don't have money. My FIL told the kids that he's giving them $10k to buy a car and he's saving for my daughter's traditional wedding dowery. DH and I are OK with grandparents giving for college but they go overboard and don't listen. As far as inheritance to us from our parents, I expect nothing from my parents just that they don't spend all their money and have to come live with me!! DH kind of thinks it's a parent's obligation to leave money for their adult kids/grandchildren. My dad just blew through his relatively substantial inheritance from my grandfather and that annoys the heck out of my husband. I personally don't really care that much. It's my dad's money to do what he wants to even if it is a bad decision.
Posted by: ES | May 20, 2009 at 12:52 PM
I don't think it is a right at all. I left home at 17 and haven't received a cent from my parents since then. Everything I have achieved I have done completely on my own and I am very proud of that. The only obligation a parent has to a child is to raise them in a safe and loving environment and then let them go out into the world to earn their own way.
Posted by: Pat | May 20, 2009 at 01:58 PM
We helped our children with their education, and assisted with their weddings and first houses. We work hard, but had the $ to do this. Once we're assured that we have enough to enjoy the retirement that we worked for and deserve to have and to have enough $ for our more frail years, we would set up educational trust funds for our grandchildren. We told our children early on not to expect $ after we die.
Posted by: carol | May 20, 2009 at 02:01 PM
Damn! I'd heard the college-thing before, but now inheritance?
Little Johnny better be ready to work his way through college. Sure, I can pay for it, but why would I? My job isn't to be his buddy. I'm supposed to do my best to help mold a useful member of society. While he's learning about differential equations, he can also learn about budgeting, saving, blah, blah. Get to work!
If Little Johnny ever shows ANY SIGN that he EXPECTS an inheritance, he'll get 'nuttin'. Geeeez, I can't believe this is even a question. I owe him? Heck, he owes me! :)
I hope Little Johnny knows I love him. :D
Posted by: Homer S | May 20, 2009 at 03:53 PM
Well, there are many ways to look at this:
1. If parents have money that can be forecasted to be left over (after all their needs), then it is a decision that they have to take.
2. If they decide to divide it up into various buckets, it is their choice.
3. If they decide to leave 100% of it their son, then so be it. In many Asian cultures, this has been a must for 1000's of years. That is why having a son is pretty important - Look at what the Chinese people do when they have girls (I've only heard on TV - not sure if it is true).
4. If they decide to share what they want to do, then it is the obligation of the 'executor' to divide it up.
So, do we (children) have a right on the inheritance......Sure. You have already inherited everything, except for the wealth (which is a parent decision). You have a body, mind, soul, heart and memories. Those ARE your true inheritances. And, the more important one.
PS: I have inherited all of my parents assets, as expected, and I plan to continue the tradition with my children. I believe in this very strongly, where I will impart culture, wisdom, assets/wealth, home etc.
$1M QUESTION> How does one avoid estate taxes as they pass on the inheritances to their children. What does the government have to do with a Father giving their Child a Gift*&^%$#$%^&*
Happy Living.....
Kenny
Posted by: Kenny | May 20, 2009 at 11:48 PM
I understand most of you are making an assumption that the parents have actually "earned" the assets during their lifetime, which certainly gives them the right to gift/share/waste if the way they want.
OK, Here's a twist... What if parents have themselves received the assets via inheritance, typically without a will? In my country, inheritance received without a will (thus as per intestacy laws) cannot be given away via a will - it has to necessarily be passed on as per intestacy laws. The only choice a parent has is to squander the assets till he/she dies broke. In that context, a child typically "derives" a right to inheritance of such assets that their parents received via inheritance. I think that is a borderline between right & wrong. Just wanted to get your thoughts...
Posted by: Param | May 21, 2009 at 05:43 AM
My husband, one of 5 children, predeceased his parents. We had 2 children, both living. My husband's parents both died in the past month, without wills. Their is
currently about $28,000 left for an inheritance. (Some of the children had requested and received large money gifts from their parents a few months prior to their death.) I've been informed by one of my husband's siblings that the money will be "split" 4 ways among the 4 living children; and that it will not have to go to probate because it's such a small amount. I feel that my husband has been
dishonored by his elimination from any inheritance. If probated, would this not have gone to his children as his descendants? I would like to make an appeal to my husband's siblings to apologize for their lack of consideration which is deeply hurtful. Convinced as I am that we have been wronged, and my husband dishonored, I'm not sure that I want to press for more than an admittance of wrongdoing as I don't want to fracture the family. One of our children is incapacitated and I'm his mother and legal guardian.
Posted by: kay | May 23, 2009 at 02:18 AM
Kay --
I'll post your question in a week or so. Stay tuned for readers to weigh in on it then.
Posted by: FMF | May 25, 2009 at 07:47 AM
I live in NY. I'm pretty sure here your kids would be entitled to something if it went to probate. I know the lawyer we had for my mothers estate wanted to know if my deceased brother was married or had any children because they were entitled to a share of the estate. I would consult an attorney.
Posted by: pat | June 16, 2009 at 11:42 AM
"A good man leaves an inheritance to his children's children, And the wealth of the sinner is stored up for the righteous" Proverbs 13:22
"Train up a child in the way he should go, Even when he is old he will not depart from it." Proverbs 22:6
The inability of a parent to teach their children right and wrong is a separate issue from whether or not those same parents should leave an inheritance to their children. I am guessing that parents who have been able to raise their children to walk in God's ways will also have money stored up to leave to their children (at least, the Bible says a good man leaves an inheritance, and a good man should be able to raise his children according to God's principles.) I am also guessing that those who have ungrateful children are also the ones who will run up massive amounts of debt and generally squander what wealth they have managed to obtain.
I think a better question is, if you are a good man who has raised children according to God's principles, why would you not leave an inheritance to your children? Do you think they are going to do evil or good with the money? If you are not a good man (or woman) then of course you will look at it from the perspective of "the children didn't earn it" or it will "spoil" the children.
Posted by: Jennifer Harper | April 28, 2010 at 07:41 PM
I understand that if you are not a Christian my comment will seem largely irrelevant to you, but maybe interesting in terms of insight into what the Bible says.
Posted by: Jennifer Harper | April 28, 2010 at 07:47 PM
That is all very interesting Jennifer Harper, but the bible I have read would not be quite so judgemental. Plenty of good and decent people have raised their children to the best of their ability, only to have them choose the wrong path. Have you ever had your heart broken by a child who steals from you, lies to you and unless there is something in it for them, ignored you. It wasn't bad parenting that did this, it was outside influences of the world we live in. A world where some people think money is more important than the poeple who love them
Posted by: Matthew | July 28, 2011 at 05:09 PM