Inheriting wealth, while often seen as a blessing, can be a source of confusion and guilt for many in the younger generation. A friend’s son recently found himself struggling with an inheritance that included his late father’s bungalow, car, antiques, paintings, chinaware, and jewelry. While it seemed like a gift, his reaction was not one of elation but of confusion, isolation, and guilt. Research suggests that such feelings are not uncommon, even when inheriting valuable assets.
Inheritance is money one has not earned, and not everyone welcomes it unconditionally. The younger generation, in particular, may not feel the same desperate need for inherited wealth as previous generations did. Decades ago, unemployment, poverty, and scarcity led many to believe that financial success was unattainable. However, today’s younger individuals are more confident, positive, and capable of earning and living well on their own. As a result, they may not be as eager to claim inherited wealth as previous generations once were.
Instead of eagerly accepting inherited assets, many feel burdened by the responsibility that comes with them. Imagine inheriting a house full of items to sift through, unsure of their value or marketability. It’s not just about financial gain—it’s about the time and effort required to manage or dispose of these possessions.
For those planning their estates, it’s essential to consider the emotional and practical impact of inheritance on their heirs. What should be passed down, and what should be avoided? A few key guidelines can help make inheritance a more positive experience for the next generation.
Real Estate: Property, especially if scattered or difficult to manage, may not be as valuable to children as one might think. Unless the property is in a prime location or already generates rental income, it could become a burden, requiring costly maintenance or selling. If the property is in good condition and financially productive, it may be appreciated. However, not all real estate is an asset—some could be more of a liability.
Family Businesses: If you own a family business, don’t assume your children will want to take over, especially if they’re not already involved. Without your guidance, things may fall apart. If your children show no interest in continuing the business, it may be wise to sell it while you’re still around. The value of professional practices, such as law firms or medical offices, can also diminish after the founder’s departure unless the children are already partners in the practice.
Debt and Financial Commitments: Leaving behind debts, loans, or ongoing subscriptions can create resentment among heirs. They may be forced to deal with payments you could not complete, leading to frustration. Similarly, timeshares and club memberships may not be of interest to your children, making them undesirable inheritance items.
Personal Possessions: While sentimental, objects such as antiques, jewelry, and artworks might become more of a hassle than a treasure. These items often require time-consuming effort to clean, appraise, and sell, which may overwhelm inheritors. Many may not have the interest or emotional connection to these objects, especially if they are outdated or difficult to dispose of. It’s a good idea to downsize and gift these items while you’re still alive, rather than burdening your heirs with them.
If you believe certain personal items hold sentimental value, consult with your children beforehand to ensure they will appreciate the inheritance. They may prefer to keep a few cherished items, but they are unlikely to want an entire collection of antiques or memorabilia.
Financial Investments: The most straightforward and flexible inheritance options are financial assets, such as savings, investments in stocks, bonds, and mutual funds, or balances in retirement accounts. These assets are easy to transfer and offer heirs the freedom to use or reinvest them as they see fit. Financial assets, unlike physical ones, can be managed without the logistical challenges of maintaining property or dealing with valuables.
While many may still value tangible assets like gold, property, or family heirlooms, it’s difficult to match the liquidity and flexibility of financial investments in the inheritance process. By focusing on cash and liquid assets, you can spare your heirs from the confusion and burden of managing physical items, allowing them to make the most of their inheritance without added stress or guilt.
