No reasonable person creates an estate plan with the intention of making their loved ones feel guilty or undeserving of their inheritance. However, many people do suffer what’s known as “inheritor’s guilt.”
Often, this happens when someone receives a large and unexpected inheritance – usually from a family member. After all, those who run a non-profit organization don’t feel guilty if someone leaves them a big chunk of their estate. They’re grateful and can’t wait to put it to good use.
When are loved ones more likely to experience guilt about an inheritance?
Some families just don’t like to talk about money – even amongst themselves. Adult children may know that their parents are not impoverished but have no idea how much they’ve saved up and/or inherited.
Some people – particularly older people who lived through personal and global economic downturns – will never take their money for granted, no matter how much they have. They prefer to save it and cautiously invest it rather than spend it.
They may lead a modest lifestyle that’s deceiving to others – including their children. This can make things all the more confusing for an adult child if you leave them considerable assets.
One wealth coach describes stages of inheritor’s guilt that often move from disbelief to anger and then guilt. Finally, however, they can accept that they’re “heirworthy.”
You can help prevent inheritor’s guilt
As you’re creating your estate plan, you can help prevent adult children and other loved ones from experiencing inheritor’s guilt by preparing them for their inheritance. You don’t need to give them precise dollar amounts (which will likely change anyway). However, it’s wise to give them some sense of how much they’ll be inheriting.
It can also help to prepare them to handle their inheritance by introducing them to a financial advisor or wealth manager. They can help them make decisions they’d otherwise not be prepared to make.
If you can afford to part with some of your wealth and still have plenty for retirement, you may be able to help with current needs – like paying for your grandchildren’s education. Even if they aren’t near college age, you can contribute to a 529 plan started by their parents.
Whether you’re concerned about causing inheritor’s guilt or if you’re anxious that your loved ones won’t handle their inheritance responsibly, having sound estate planning guidance will help you make the best choices for your family.