In his sprawling Victorian novel Bleak House, Charles Dickens portrays several characters who’ve spent decades waiting for what they expect to be a large inheritance. By the end, legal wrangling has taken most of the money, but even worse, the heirs have wasted their lives in a kind of expectant limbo.1
At the time, popular novels often had the hero or heroine suddenly become rich at the death of a long-lost relative. But based on Dickens’ experience working in the courts, Bleak House was a more realistic portrayal of the futility of placing one’s future hopes on an expected inheritance.
However, people seem to still want to believe in the more romantic view where a family member will leave them a significant windfall.
A recent survey in the U.K. by the investment management firm Charles Stanley, found that millennials (born from 1981 to 1996) have hugely unrealistic expectations about when and how much they will inherit. Younger people say they expect to be left an average of $168,450 (in U.S. dollars) — but according to official statistics, the average inheritance in the U.K. is currently $62,500. That’s just over a third of the average expected amount.2
This gap between expectation and reality is not just a British problem. Several years ago, a study by TD Ameritrade found that while 40% of young people expected to receive an inheritance, only 16% of parents said they expected to leave one.3
But even worse than the overestimation is the insidious idea that the death of a family member is the key to a person’s financial future.
Financial planner and USA Today columnist Peter Dunn says that he’s often had clients tell him, “As soon as my parents die, we are set financially.” In 90% of the cases, he says, the kids have no idea what they’re talking about. Their parents won’t have the wealth to pass onto them.4
And Dunn unapologetically states that “an expected financial windfall upon the death of a loved one is not a silver lining. It is a black hole in your heart.” He suggests that instead of relying on family wealth (if it exists), you should use it as an inspiration to drive your own success.
An inheritance in itself isn’t a bad thing. But living your life so that your future depends on receiving one is neither prudent nor proactive.
Your trusted advisor can help you implement a plan that has the best chance for fully funding your retirement, without the need for lucky breaks like a large inheritance. Not only will this help give you long-term peace of mind, but it can free you from the acrimony that can damage the closest families when members are depending on an inheritance to secure their future.
Citations:
1 – https://en.wikipedia.org/wiki/Bleak_House
2 – https://www.cnbc.com/2019/05/10/millennials-are-wildly-misjudging-how-much-wealth-theyll-inherit.html
3 – http://usatoday30.usatoday.com/money/perfi/retirement/story/2012-09-09/inheritance-generation-z/57720470/1
4 – https://petetheplanner.com/waiting-for-your-family-to-die-in-order-to-get-an-inheritance/
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