Passing Down Wealth From Generation to Generation

My father is dying of cancer and has a short time left to live. While his health is ok now, his medicines will stop working at some point over the next few years and from then on the cancer will take over and he will get sicker until he passes.

This post is not about my father’s health, but it’s important to note to put this into context.

Previously, many of my readers have left comments offended by a post I wrote about expecting an inheritance. A conversation I had with my dad this weekend over the phone continues this topic.

He told me how “I” need to get my mother to understand that she needs to live off the interest on the 401k. They get $7000 a month and there is no reason that they can’t live on that. (My mom is a spendaholic.)

My dad went on to tell me how he spent his whole life building wealth for the family so it could be passed down to his kids (me and my sister) and that we could pass it down to our children. Both him and my mother grew up in the lower middle class and did not have wealth. Their parents will not be passing down a great deal to them. So he wanted to build wealth up for our family, for the future. He wasn’t trying to make my sister or I rich, but he did want to make sure we didn’t have to worry about not having enough funds to get us through life. Once you have wealth, living off the interest becomes feasible. It’s not about luxury, but it is about having a lofty security blanket for your family – as in – your children and their children and so on.

But it makes me sick to my stomach to think about how in the future, I will be in such an odd spot — when my father passes, it will be up to me to try to make sure his dream lives on. Yet that dream is for my sister and I to obtain an inheritance. My sister has a learning disability and while she can comprehend some of this she is also younger and I don’t think she will understand a great deal of the financial situation (other than wanting the money.) My mother will want to spend it all. I understand finances, saving, living off interest – I could probably teach my mother to do this, but ultimately it would be so that I could get money after she dies.

My mom didn’t work once I was born, so all of the money in savings is from my dad’s years of working many hours to build this wealth. On one hand I feel the responsibility to make sure that the reason my dad worked so hard his whole life (probably causing unnecessary stress and part of the reason he gained so much weight and got sick) lives on, and part of me feels like this isn’t really my business at all besides making sure my mom doesn’t spend everything too quickly – she does need enough money to survive for many years. She’s in her mid 50s so hopefully she’ll be around for a long time.

I do want to make sure my mom doesn’t go crazy with spending, but she could very easily live a luxurious life and spend every penny if she wanted to in the future. And who am I to stop her?

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4 comments

  1. Anonymous says:

    I have had Grandfathers and uncles that have married younger woman who have not been the mothers of their children. When they have died they left everything to them after maybe a 10 year marriage or so. So really it is none of your business how your Mother wants to spend her money. If for some reason your father wants to disinherit your Mother from not leaving his half to her he may do so. The other half is your Mom's. The two of them are both your parents so I am assuming your Mother would want to leave you whatever she has. If she wants to spend every cent of her money that is her business. I have a question for you to think about. If you have a spouse right now and they suddenly passed on would you like half or some kind of allowance given to you now while saving this for your children.

  2. Anonymous says:

    Your dad needs to put this all in his will and estate. I agree with the other two comments- you're not going to be able to change her. The only thing you can do is to give her an allowance (monthly/weekly, etc) or ensure her bills are paid off of the interest and then give the rest of her money to her. But for your dad to put this all on you is a mess.

  3. MEG says:

    It is very unfair – and unnecessary – for your father to place you in this situation. If he has enough money for your mother to live off the interest, and if he intends for you and your sister to receive the principal once she eventually passes, then he can and should set up a trust – and list a bank or other impartial family member as trustee – to see to that intention.Can you imagine the angst, the arguments, the anger that is going to result when (not if) your mother starts dipping into principal and spending down your father's legacy? Will you be able to visit her and appreciate her new $10,000 couch, the extravagant gifts she buys your future children, her wardrobe, her vacations without constantly thinking about how that's a few thousand less (plus interest) that you will ultimately receive? I've known people in that situation, and it's not pretty. Pass your concerns along to your father and ask him to set up the necessary accounts – and put someone ELSE in charge of your mother's finances. It is NOT your place. (And PS it's naive to think you can educate her or change her habits at this late stage in life. Add to that the pain she's going to feel when your father is gone, and you won't be able to talk a lick of financial sense into her).

  4. Andy Jolls, CreditGu says:

    Your Dad shouldn't put this on you verbally. This should all be done in writing via a Will and a Trust. He should also tell your Mother his intentions. This is a time for your Dad to get his affairs in order – both financially and emotionally. An outside trustee is often a good idea and he can structure the will to have your mother receive an allowance of $7000 growing by 4% per year. Don't agonize over what's right, he should be doing this.

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