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Isabella and Lorenzo are siblings who have faced financial difficulties throughout their adulthood. They are both over 30 years old (Isabella is a divorced mother of three children, Lorenzo is married and father of two children) and they barely make ends meet. Let’s say that between them they only have a few thousand dollars saved.
His 65-year-old mother, however, has faced no such challenges.
She inherited a house and a significant amount of money when her own mother died, making her a multimillionaire, and she was also the beneficiary of a life insurance policy when her husband (Isabella and Lorenzo’s father) died five years ago. After her husband died, the mother sold the family home, which had appreciated greatly in value since they bought it 40 years ago.
That’s why Isabella was surprised when, in a recent phone call, her mother told her that she planned to spend every penny she had before she died, leaving nothing in her will to her two children. Her mother said she wanted to make the most of her golden years and had created a budget that would allow her to spend all her money.
Isabella thinks her mother is being selfish, while Lorenzo worries that she is being reckless. Should the brothers confront their mother about her retirement plans?
While the mother said she would not leave an inheritance to her children because she wanted to enjoy her money while she was alive, there are other reasons why parents may not want to leave any inheritance to their children.
Some may choose not to leave an inheritance to their adult children because they believe it will make them more self-sufficient, encouraging them to maintain a strong work ethic rather than developing an attitude of entitlement.
Parents may also worry that their adult children will not be able to manage the money they inherit, perhaps even believing that their children will waste what they worked so hard to pass down. Concern about whether an adult child’s spouse will have access to inherited money, especially if their relationship is not stable, is another reason parents may think twice before leaving an inheritance.
Although Isabella and Lorenzo are their mother’s only children, and their mother has not remarried since their father’s death, some parents may choose not to leave inheritances for fear that this may cause family conflict. This can include not only infighting between siblings, but also between stepparents and children over who inherits what.
But if you’re considering putting all your savings toward retirement and have nothing for your family, you may want to consider life insurance as a half-measure. That way, your children won’t have to pay high funeral costs or other end-of-life expenses when you pass away with an empty bank account.
If you’re looking for life insurance, Ethos offers final expense insurance that includes coverage for funeral and burial costs, as well as medical and hospice bills, mortgages and other debt, and credit card bills.
With Ethos, you can get coverage in just 10 minutes online or over the phone, with guaranteed approval even with pre-existing health conditions. This coverage can be especially beneficial for seniors and those looking to ensure their final expenses are handled without putting financial strain on their families. Even better, rates can start at just $9.80 per month.
Ethos also gives you the flexibility to select coverage amounts ranging from $2,000 to $100,000, depending on your needs.
Read more: Warren Buffett used 8 simple money rules to turn $9,800 into an impressive $150 billion – start using them today to get rich (and then stay rich).
Isabella and Lorenzo may want to consider talking to their mother about her plans to spend everything she has. And not necessarily to change your mind, but to clarify your wishes and ensure that you will be taken care of in your final days.
They might start the conversation by saying they’re worried about your plans and whether you’ve taken into account the possibility of facing health problems as you get older, which might even require care at home or in a nursing home.
According to KFF research, many Americans incorrectly believe that Medicare covers long-term care, when in fact it only covers some skilled nursing facility care. (1) Medicaid, on the other hand, can cover long-term care services, but eligibility requirements vary by state.
Isabella and Lorenzo should make it clear that neither of them can pay for their mother’s medical care and that they could not take time off work to care for her. Doing so may encourage you to factor medical expenses into your long-term plans, if you haven’t already.
Ultimately, if their mother’s reluctance to offer them an inheritance is due to concerns that her partners or future partners will try to take advantage of it, Isabella and Lorenzo could offer them assurances that, if they received any inheritance, they would keep it separate from their marital finances.
Inheritances are sensitive topics that people often avoid, but it’s important to ask questions about them instead of avoiding them completely. Not talking about it makes it difficult for potential heirs to plan for their financial future, especially when estate plans are kept secret.
Regardless of how the inheritance turns out, Isabella and Lorenzo should encourage their mother to talk to a financial expert to make sure she has enough money for her plans, whatever they may be.
It is important to ensure that Isabella and Lorenzo’s mother is cared for while she is alive. And while an inheritance would be welcome and provide both of you with financial relief, it’s ultimately your mother’s decision what to do with her money.
However, given your mother’s millionaire status, it’s probably a good idea to work with a company that understands your unique needs.
Whatever you decide, it is essential that you make your wishes very clear. With Range’s legacy planning tools, you can get your affairs in order today to ensure your family is in charge of the future. Range offers top-notch financial and estate planning services to those with a high household income, somewhere in the ballpark of at least $200,000.
Even better, Range financial advisors can also evaluate your existing estate plan and even arrange to draft basic estate plans for you. Range even offers wealth tracking, financial planning, and long-term retirement strategies.
While typical certified financial planners (CFPs) typically charge 1-2% AUM fees or upwards of $1,000-$3,000 for comprehensive plans, Range offers flat-fee pricing with 0% AUM fees for high-income earners at a fraction of the cost of other CFPs.
If you’re not as wealthy as Isabella and Lorenzo’s mother, you could talk to one of Advisor.com’s financial professionals. All Advisor.com experts are pre-vetted fiduciaries, meaning they are required to act in your best interest.
How it works is simple: just answer a few quick questions about yourself, like your zip code and your finances. The platform will then connect you with one to three experienced financial professionals to help you develop a plan to achieve your homeownership or retirement goals, all in just a few minutes.
You can view advisor profiles, read reviews from past clients, and schedule a free initial consultation with no obligation to hire. From there, you can analyze your advisor’s fees and billing schedule to determine what’s best for you and your budget.
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KFF (1)
This article originally appeared on Moneywise.com with the title: My Mom Plans to Spend All of Her Money Before She Dies, Leaving Nothing to My Brother and Me. Are you being selfish?
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
