When you inherit money...

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you’re inheriting a significant sum, get a financial advisor. If you’re inheriting your parents’ deferred retirement accounts for example it’s a bit complicated — you could take all the money at once or you can do it over 10 years but you have to pay the taxes on it once you pull it out.

The beneficiaries to the IRAs could be trusts so you might not have complete control. With marital deduction trusts the goal is to limit estate taxes and generation skipping trusts the goal is to keep the money within the family and to benefit as many generations as possible. The only way you would know is if you asked.

We siblings are beneficiaries to the trust and to the IRA / retirement accounts. I manage all of the money at this point.

I had considered making the trust the beneficiary if one sibling died (to make it fair to their kids) but my research showed me that would cause too much tax complication. I also conferred with the FA and he thinks keeping it the way it is will be good.

In the end, I learned that the money will go to the kids of siblings if a sibling dies, and that was my main concern.

[Anonymous]

Anonymous wrote:I inherited my dad's IRA. I need to empty it by 2032, which is just in time for me to be able to access my retirement accounts. So, I just retired. I'll use the inherited money to live on until I can access my retirement accounts and my pension. Wish he could have lived longer to spend his retirement accounts, but it wasn't the case.

I hear you. We led a life of limited activities, and that means my remaining parent has way, way more than they will ever need. We took few vacations. When we did, they were nearby.

I don't blame them for their life of worry over money though. On the other hand, they could have created happy family memories just by doing something simple like renting a cabin for the family to gather. But they never felt they had enough even when their FA said they would have more than enough.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I inherited my dad's IRA. I need to empty it by 2032, which is just in time for me to be able to access my retirement accounts. So, I just retired. I'll use the inherited money to live on until I can access my retirement accounts and my pension. Wish he could have lived longer to spend his retirement accounts, but it wasn't the case.

I hear you. We led a life of limited activities, and that means my remaining parent has way, way more than they will ever need. We took few vacations. When we did, they were nearby.

I don't blame them for their life of worry over money though. On the other hand, they could have created happy family memories just by doing something simple like renting a cabin for the family to gather. But they never felt they had enough even when their FA said they would have more than enough.

Same position here. One parent died, the other is in their late 80s and doesn't take care of themselves. The pile of money the one alive sits on is massive because we lived like we were poor. We didn't take vacations besides driving to a relative's house in western NC for a week each summer. I had to learn how to spend money without being anxious as an adult. It's wild.

I inherited a relatives IRA and everyone was immediately like "don't touch anything!" Like I had to reinvest the RMD or the world would come to an end. I'm renovating my kitchen. It's going to be nice.

[Anonymous]

i'm 44, I inherited about $130,000 3 years ago and I still can't bring myself to spend it. I put it in the market (most in an index fund and some in a high-risk high-reward tech company).

My husband and I should be fine post retirement with the money we've already saved.

I really don't know how to make the most of it. Should i buy myself a new car? Should i pay for fancy tennis lessons for the kids? Should I take a vacation? Spending is strangely hard.

[Anonymous]

Anonymous wrote:i'm 44, I inherited about $130,000 3 years ago and I still can't bring myself to spend it. I put it in the market (most in an index fund and some in a high-risk high-reward tech company).

My husband and I should be fine post retirement with the money we've already saved.

I really don't know how to make the most of it. Should i buy myself a new car? Should i pay for fancy tennis lessons for the kids? Should I take a vacation? Spending is strangely hard.

The problem is, no one knows how much retirement/end of life care will cost. We’re all much better off saving to take care of ourselves in retirement rather than expecting children or the government to do it for us.

I had parents who saved every penny. They were able to fully financially take care of themselves as they aged. They lived to 86 and 91. One needed Alzheimer’s care for a number of years. It was a true gift to us as their children to know that there was enough money that we had no need to worry. There was a small amount left over at the end to be divided among three siblings.

I hope to be able to do the same for my children someday.

[Anonymous]

My divorced friend told me that she made a big mistake with her inheritance: she let a lot of it get co-mingled with her spouse (dpaying off credit cards, buying a minivan for the family, joint investments). A couple years later, he dumped her and she was in a money squeeze for a while.

Keep the money separate and in your own name.

[Anonymous]

Anonymous wrote:i'm 44, I inherited about $130,000 3 years ago and I still can't bring myself to spend it. I put it in the market (most in an index fund and some in a high-risk high-reward tech company).

My husband and I should be fine post retirement with the money we've already saved.

I really don't know how to make the most of it. Should i buy myself a new car? Should i pay for fancy tennis lessons for the kids? Should I take a vacation? Spending is strangely hard.

That's like 6 months of care FWIW.

[Anonymous]

Anonymous wrote:

Anonymous wrote:i'm 44, I inherited about $130,000 3 years ago and I still can't bring myself to spend it. I put it in the market (most in an index fund and some in a high-risk high-reward tech company).

My husband and I should be fine post retirement with the money we've already saved.

I really don't know how to make the most of it. Should i buy myself a new car? Should i pay for fancy tennis lessons for the kids? Should I take a vacation? Spending is strangely hard.

That's like 6 months of care FWIW.

$130k is like a year of care in today’s dollars. You don’t know how much this family has otherwise saved. Stop fear mongering. If you have several million dollars saved by the time you retire and spend 4% a year, you will be fine.

[Anonymous]

By the time I inherit, I will have already saved enough to retire, so I'll probably keep it separate and put it into a trust with my kids as the beneficiary. I'll spend the trust's income on great experiences with my kids, like fully paid vacations together, and preserve the principal for their inheritance. It will be more than what I could leave them from only my earnings/investments.