When is the Right Time to Inherit? Emotional Ramifications of Inheriting Wealth
By: Kelly Jasin
Emens & Wolper Law Firm Co.
Many of our estate planning clients struggle with this very question. They have trouble pinpointing an age where they feel their children would be “responsible” enough to inherit a large sum of money, that is, to have it in their pocket. Often times, these clients consider things like, well when will they be done with school? When will they likely get married (and maybe past the first divorce)? When will they begin their career? For these reasons, often times parents break up the distribution of “chunks” of money into several ages, giving beneficiaries the chance to learn from potential financial mistakes, and still have some money left for the future.
But one thing most parents do not consider is when will the child be emotionally ready to inherit a large sum of money. Psychologists have long acknowledged that children of wealth can sometimes lack motivation to go out and create their own legacy. Similarly, many well-off parents fear creating “trust babies”. A great deal of one’s self-worth is tied to what they are able to accomplish on their own and knowing that they are able to overcome obstacles. Being given a large sum of money can sometimes deprive a child of motivation to do on their own by creating a life of leisure, or a life that is free of the struggles of ordinary frustrations, thus giving them a diminished sense of self-worth and, in-turn, affecting their ultimate happiness in life.
In Covie Edwards-Pitt’s book, Raised Healthy, Wealthy, and Wise, she discusses the emotional impact inheriting can have on children. When interviewed, she found that inheritors feel most fulfilled and happy when they know that they are able to stand on their own two feet independently, outside the family wealth. Inheritors who were forced to work-through and overcome obstacles and challenges on their own without the help of family financial resources reported a higher sense of contentment and self-worth. Being forced to overcome setbacks gave inheritors a sense of resilience and security-in-self. These lessons were found to be vital to the emotional well-being of the beneficiaries.
So, when forming your estate plan, it is important to consider not only the financial well-being of the beneficiaries, but also their emotional health. Talk to your estate planning professional about ways to reinforce your values and continue to care for your descendants emotional growth through your estate plan.