Monday, May 5, 2014
A 2014 study by the Insured Retirement Institute found that in the past, around two-thirds of Boomers thought leaving an inheritance was important. Today, that number has plunged to forty-six percent. Yet, those who are concerned about whether or not they will receive an inheritance should prove they are capable of receiving a sizeable gift:
- Make Good Financial Decisions. Although you may not have a spotless record, establishing a good pattern of financial decisions can show parents personal growth. “If children can demonstrate to their parents by example that they are responsible and engaged in the financial process, parents will likely feel more comfortable moving forward on a legacy gift.”
- Ascertain Financial Self-Awareness. It is okay if you have made mistakes, bad decisions are a great way to learn. However, if you continue to make the same mistakes this shows you not only have bad judgment, but you are also unable to learn. Admitting to blunders you have made in the past is the type of consciousness that is critical for parents to see.
- Use Debt Responsibly. Many wealthy families use death to their advantage. If you have debt, make sure it is debt that is used to produce a higher long-term return. Credit card debt or excessive car loans are red flags for parents.
- Show Determination. Parents want to see that you have a drive and zest for life. Parents do not care what you do, as long as you do something.
- Have a Plan. Talk to your parents about your future goals. Tell them how you foresee your life unfolding. Many parents become concerned their children have no life plan and sudden wealth will only de-motivate their children.
- Display an Interest in Finances. Taking an interest in personal finance will help show you understand the obligations of wealth. The more comfortable you become with money, the more comfortable your parents will be leaving you money.
See Robert Pagliarini, Why You May Not Get An Inheritance (And What To Do About It), Forbes, Apr. 30, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.