This article was first published on 23rd November 2018
Do you find yourself betwixt and between on this? On the one hand, your in-laws are spending every last penny and more on the latest cruise experience – “are they deliberately emptying the coffers!?” On the other hand, you have children who will be retired themselves by the time you intend to leave the stage – “They’ll just have to look after themselves!”
I think there is something quite Victorian about the notion of “leaving an inheritance”. The attitude of working hard and squirrelling money away so that the son (or daughter) will lead a better life seems to belong to a bygone age not the 21st century.
And it does appear that people’s attitudes to leaving an inheritance is changing. Research reported by the Joseph Rowntree Foundation found that people “liked the idea of leaving” money or assets but don’t feel that older people should “be careful with money” just to make sure they can pass some on. In fact, for the 90% who expect to have some ability to pass on an inheritance, two-thirds said they will not worry too much about doing so.
The research also found that older people (over 80) and younger people are more in favour of leaving an inheritance, while those in their 50s are less supportive and expressed the intention to use their assets “for themselves”.
As most Booming Lives members fall into this ‘over 50s’ age group, I am confident that you will support me on this: there is nothing wrong with spending the kids’ inheritance!
Firstly, it was not theirs in the first place. And secondly, deliberately delaying their gratification and yours until after you die is only benefiting the financial services industry (fees) and the Chancellor of the Exchequer (Inheritance Tax). Surely, it is better to help your children while you are alive and they are young enough to really make something of the gift. By helping them onto the property ladder or co-funding a business venture, you will be partnering in their future success and financial security. By leaving them money in their 60s you will be just funding their next cruise!
There could be benefits for you too. An unspoken contract along the lines of “I will help you on to the property ladder if you help me when I need care or funding for a nice retirement home” is surely better than “look after me and I will make sure you get something in my will”!
However, it is somewhat ironic that just when the academics are warning that our children’s generation will be the first to see a fall in living standards – due to the cost of housing, less generous pensions and student loans – our attitude to leaving money to them when we’re gone is also weakening.
Of course, it’s just possible that we might still feel a frisson of guilt as we contemplate that next holiday that empties the coffers further!
Don’t be thrown off track. Help your kids in every way you can now. Spend their inheritance. They’ll soon get used to the idea!