Even if it’s not their money, heirs often fight over it

By MICHELLE SINGLETARY

You will die.

And most of you will leave something for your heirs. (Maybe just your clunker of a car or chipped china.)

Have you thought about how to allocate your assets?

Despite the reports that Americans aren’t saving enough, there are many people who will actually leave a lot of money. A study by Accenture estimates more than $12 trillion in assets are being shifted from the Greatest Generation — people born in the 1920s and 1930s — to Baby Boomers.

Over the next several decades, about $30 trillion of wealth will be transferred by Baby Boomers to their heirs.

“At the peak, between 2031 and 2045, 10 percent of total wealth in the United States will be changing hands every five years,” the Accenture report said.

A reader recently asked me to reconsider my position on parents leaving an inheritance.

I believe people — upon their death — should do with their money what they want, even if it means not equally dividing their estate among their adult children or other heirs.

(I do have a caveat, which I’ll address later.)

The reader pointed out an inheritance story from a colleague’s column:

“My maternal grandparents gave all their money to my aunt. They said my mom didn’t need it because she ‘married well.’ Soon after my grandparents passed away, my dad did, too. My mom was a struggling widow. And then, my aunt passed away. All that grandparental dough went to her sons — my cousins — who squandered it. It is now 30 years later, and my mom has always struggled. She really could have used any portion of that money. And she never recovered from the hurt feelings, either.”

My reader wrote: “I thought the writer’s perspective was unique. You never know how your children’s situations may change.”

I understand that people’s financial circumstances change. Nonetheless, the disinherited daughter is guilty of giving into a sense of entitlement. She chose to stay wounded for 30 years because she didn’t receive money that wasn’t hers.

It was her parents’ money to distribute as they saw fit. And they thought their other child was in more need.

Certified financial planner Carolyn McClanahan told me some adult children don’t want to spend down their parents savings for fear of being criticized by other heirs.

One of McClanahan’s clients had a full-time job and took care of her mother before work and after. But the daughter needed help. The mother had plenty of money to pay for long-term care. Yet the daughter was reluctant to spend it because her brother, who lived across the country, was giving her grief about how much would be spent.

And after the mother died, McClanahan recalled, the son questioned every expense his sister paid for out of the estate.

“Too often, family members who are the caretakers are not given consideration for the time they spend providing care,” she said. “The estate is usually evenly divided, and this often causes resentment.”

McClanahan said her financial planning staff tries to mitigate estate battles by coming up with family agreements in advance on who will be responsible for care and what consideration they will be given.

“Ideally, they are paid for their time and effort during their time of service,” she said. “If that is not feasible because of limited resources, we discuss how to compensate them in the estate plan. We also work with families to create transparency around finances so everyone is clear that nothing nefarious is occurring.”

Now about that caveat: Do what you wish with your money, but think about the upheaval you will cause by purposefully leaving an adult child or children out of your will.

Or think about the character of your children and the resentments — and court battles — your estate plan may cause if your assets aren’t divided in a manner your heirs will consider just.

And to potential heirs: Keep in mind that you aren’t entitled to other people’s money, even your parents’. That equal is sometimes not fair. And that fair is sometimes not being equal.

— Washington Post Writers Group