The headline is provocative: "Why I Am Giving My Children Their Inheritance Now." The NYTimes story was told in the first person by a man who said of his financial standing, "I know what wealthy is. And I know my wife and I are not." Nonetheless Paul Brown, an occasional columnist for the NYTimes and the author of best-selling business books, clearly has a comfortable amount of disposable income and not many major expenses ahead of him--he has finished financing his children's college education.
That is why, he writes, he and his wife decided to begin to give each of their four children part of their inheritance now. Now, as in while their children are still setting themselves up in life as opposed to later when Brown and his wife are no longer around and the children are set up--living their lives with presumably there own reservoirs of disposable income.
Turns out the headline is a tad more provocative than what Brown is doing. Many of us give our grown children financial gifts in the here and now--or "loans" that we do not expect them to repay. Most of us do it on an ad hoc basis. Brown is more organized. He gives each of his children an annual check. He reports that the money is used by each of his kids in different--albeit responsible--ways: to buy a house, to fund a college account for a newborn, to start a business, to boost a savings account.
He seems to be saying what paterfamilias and I have long believed: If we are fortunate enough to have raised children who don't feel entitled --as Brown says his children do not--and who don't have wild or crazy spending habits, then why not share the wealth now when they need it. It's all well and good to believe they should be independent and stand on their own two feet. But how pleasurable it is to help them out.
Here are three reasons Brown gives for giving himself that pleasure:
They can use the money now
They are going to get the money anyway, in the form of an inheritance.
Who wants them waiting around for you to...... Brown spells it out this way: "Why, as a parent, would you want your children — even if it is on some tiny, tiny, tiny subconscious level — waiting around for you to die, so they can inherit money they could use now?"
Brown also notes that he and his wife have prepared the best they can for the future, saving money for retirement and carrying good health insurance. They are giving their children money that is expendable. It brings to mind a post I wrote about a question Carl Richards (the "Sketch Guy" financial adviser who also writes for the NYTimes) raises about money: How much is enough? When we can answer that query we may want to share the excess with those we love.
Remember Cathy, the comic strip character that tapped into our worst vulnerabilities about our bodies, ourselves. I still shiver with the sisterhood Cathy brought whenever she freaked out about buying a bathing suit.
Cathy retired--or at least her creator, Cathy Guisewite retired her. But now Guisewite is back. Writing in the NYTimes, Cathy (the person) wants to impress on her college daughter the advances her daughter should not take for granted, the freedoms, as Guisewite puts it, "our grandmothers dreamed of, our mothers hoped for, what we earned and our girls will inherit."
With Mary Tyler Moore as her lodestar, she wants to show her daughter "How change can happen, so she isn't afraid of everything else that's happening now. To protect her by empowering her with an example of what one voice can do."
Here is what she tells her daughter about the doors Mary Tyler Moore and her breakout TV show opened for her and millions of other women:
"...When I was 24, a young woman could either aspire to be a homemaking Betty Crocker or a militant Betty Friedan. We argued about things you can’t comprehend. Should a woman be allowed to have a job? If she got a job, should she be allowed to wear pants to the office? If she got married before 25, was she betraying the new career possibilities for which women had been fighting for a century? If she wasn’t married by 35, was she an old maid?”
When that doesn't seem to grab her daughter's attention, Cathy, waving a DVD of Mary Tyler Moore's show, persists.
“You need to see this right now, honey, when so much of what’s been won for women feels threatened. You need to see what one, sometimes quivery, voice did to move millions. How minds and doors got opened by someone who found a way to gently, graciously shift things just enough so that people could imagine a different future. You need to know that every single one of us has the power to question everything.”
Every family vacation has its theme, inside joke or something that becomes a means to remember the time spent together. On one Vermont vacation, we couldn't eat enough country-made peach pies. They were the treat--every evening and some afternoons. One year our Grands put on a magic show that was, well, magic and memorable, down to the finale of all them running around the lawns of our condo with sparklers. Last year was the year of Pride and Prejudice --the full BBC version. We would watch an hour or two every night--everyone rushed through dinner to take their seats in front of the TV for the next episode or two--and that included the 7 year old, the teenagers and the adults.
This year, unlike our previous family vacations in Vermont, our daughter and her family were not with us. Sigh. They had obligations elsewhere so this was the family summer vacation with just one set of adult kids and Grands.
It was also the vacation I fell into a pattern of reading the New York Times on the porch of my condo every morning and then wandering over to Uber son's unit armed with a scintillating article to share. The idea of a news bite from PenPen did not necessarily bring cheers from my Grands, ages 8, 13 and 15. I could almost hear groans. But once I read key parts or summarized the issue, they sat up and took notice--well, they paid some attention.
One day the story was about the attempt to do unto This Land is Your Land, Woody Guthrie's anthem, what had been done to Happy Birthday. That is, lift the copy right and make the song available to anyone who wanted to use it. My Grands of course knew the song--they sang a line or two before we got back to the facts--and even the 8-year-old knew what "copyright" was (her dad has written several books. Must have been a word that came up from time to time.)
Another story that drew interest: A recent dig in Hungary where anthropologists were hoping to unearth the "heart of gold" of Suleiman the Magnificent, an Ottoman warrior and leader, that was buried in a small village in Hungary when he died on the eve of battle. What's not intriguing about a dig into the past--a 16th century battlefield bunker--and a story about a warrior leaving his heart buried in a casket of gold?
Another day it was the news report that French President Francois Hollande had spent $10,000 a month on haircuts. Shocking to all (hashtag #CoiffeurGate) and lots of jokes by my Grands on hairstylist spending--especially by une homme with not that much hair on his head.
Bottom line: It didn't matter if my arrival with news story in hand became a running joke. Actually, it never dawned on me that my Grands wouldn't enjoy my news clips--nor did I care if they didn't. They could always walk away or return to whatever it was they were doing. It was more important to me that the news stories led to lively conversations--about why Arlo Guthries' heirs wouldn't want to give away the copyright (It wasn't the money; they didn't want politicians with whom they disagreed to use the song for their own purposes.) and why copyrights are important to artists. We also theorized about Turkish Suleiman the Magnificent and what he was doing so far afield in Hungary and why his entourage left the great warrior's heart behind.
The vacation of the New York Times stories might not have been as tasty as the peach pie vacation or addictive as Pride and Prejudice but it was a reminder--to me at any rate--that Grands like being part of a grown-up discussion. It is also reminder that we leave a legacy with our Grands, not just in the material things that may come their way but in little discussions, bits of advice, sharing of memories.
Who knows if my Grands will remember the summer of news story discussions or look to newspapers like the New York Times for the wide range of stories they have to tell. But they might. The daily news briefings this summer undoubtedly meant more to me than to my Grands. Newspapers are my passion. How else would we begin to understand other cultures. I can only hope they picked up a little of my enthusiasm and stay curious.
Am I my child's repository? This is not an existential question. Now that the kids have moved out and we're empty nesters, many of us are clearing out closets, purging storage spaces and lightening the load of stuff stored in our house. We may move to smaller quarters or stay put and reuse the now-unoccupied bedrooms. Downsizing or rightsizing, we're going through our stuff--which leads us to all the papers, books, photos and assorted junk our kids have left behind.
We've probably already threatened them with a "take it now or it gets thrown out." They may opt for the garbage default or stop by to carry away an old teddy bear or two. That doesn't mean we shouldn't go through the leftovers and sift gold from dross. By that I mean, kids marry, have homes of their own and children. When that happens, some of the items piled in cardboard boxes and stuffed in bureau drawers may take on a new value.
Having gone through the Big Sift recently, I relied on three criteria to make save or dump decisions.
Would they want to share this memento with their children?
Taped-up hockey sticks, scarred action figures, Barbie dolls minus a part or two, tomes of poetry from high school English, a prom dress--they will not age well. Case in point: When my son was a wee lad he loved Matchbox cars--played with them endlessly. I saved the best of them--how could I get rid of something that was a huge chunk of his childhood. But years later when I took them out to let his children play with them, the cars were a chipped-paint mess. You couldn't tell one car from another. Beyond their politeness in hearing how their dad loved to play with them, the Grands had little interest in the cars.
But it ain't always so. My mother-in-law hit the savings jackpot. Years ago when she told her college-age son--my future husband--to get rid of the stuff that was littering his room and closet, he was ready to dump his set of Lionel electric trains. (See photo above). He no longer had any interest in them. She looked ahead and wrapped each train car and the tracks in newspaper and stored them in a sturdy box. Years later, when our son was born, she delivered the train set, which not only provided great bonding moments for father and son but, 30 years later, delivered similar thrills for--and bonding with--visiting grandchildren.
Will they need it some day?
Should they reach their dotage and want to write their memoirs, some of the letters, reports, diaries and photos would be a necessary part of a primary historical record. But not everything. Such as the boxes of photos, particularly from their pre-smartphone college days. If they don't take them away, a smattering of photos can be scanned and sent their way as a digital memory book--or they could become part of a celebratory e-book for, say, a Big Birthday. They are never too old to have a look back and see who they were when they were young.
As to letters from friends, you never know what will be meaningful years from now. A recent --and very moving--young adult book, “I Will Always Write Back: How One Letter Changed Two Lives” is based on penpal letters between a school girl in New Jersey and a school boy in Zimbabwe. It traces the enormous impact that correspondence had on both their lives. Someone in the New Jersey family had the good sense to save those letters from the downsizing demons.
Does the sentimental value overwhelm the practical?
There may be letters from friends or grandparents that speak of important reminiscences or life's values. There may be objects that embody a special time in their life. It might be the hand-knit blanket a grandma made especially for them or a weird sculpture that always sat on their desk or a stuffed animal that saw them through the traumas of growing up. No matter how scarred or worn, those mementos don't lose their power.
The shelves of soccer trophies or drawers of swimming ribbons, the high school yearbooks and college textbooks may bring back a range of emotions, but a photo of them scanned into a digital record will suffice. That space can be cleared, shelves cleaned. The Lionel trains, though--wrapped and boxed--are a keeper.
(For more on paring down, see Mary Quigley's blog on AARP, How to Rid Your Home of Your Adult Children's Stuff, and my previous post Five tips for rightsizing overstuffed attics, closets and bookshelves.
Yesterday, I posted about the international bond we parents of grown children have: Wherever we are in the world and whatever our cultural base, a majority of us are willing--if we're able--to help our kids out financially. Most of our kids appreciate the help, even if they're sometimes embarrassed about taking it--at least that's what the surveys here and in Australia and South Korea found.
Does the same underlying theme hold true for leaving a legacy?
According to a Pew survey of grown children and their parents here and in Germany and Italy, our kids have Great Expectations: American kids--more so than German or Italian--see it as our responsibility to leave them an inheritance.
Kids ages 18-29 have the highest sense of entitlement. That percent declines as they get older--to a mere 28 percent once they reach their 60s and presumably have kids who will have Great Expectations of their own. In Germany and Italy, the percentages are much lower--only 27 percent of Italian bambini and 20 percent of German kinder in the 18-29 age range see a legacy as their parents' responsibility. (The chart below has all the numbers.)
One upbeat note for those of us who may find ourselves struggling financially in old age: The survey found that an overwhelming majority our kids--three out of four--feel a strong obligation to look after us. Germans and Italians had more faith than American kids did that government programs would help financially in old age. That faith may be at the crux of why our kids say they feel it's their responsibility to be there for us. But not necessarily why they may think we should be building a nest egg to pass on to them.
"I updated my will, something I had been putting off." That's what Kenneth Feinberg, the former administrator of the September 11 Victim Compensation Fund of 2001 and currently administrator of the General Motors ignition-switch compensation program, wrote in the New York TImes. Feinberg, who's nearing 70,had to review in detail the estate plans of those killed unexpectedly. It's given him an up-and-close and personal view of how people leave their worldly goods to their heirs--and provided him with a learning moment or two.
"Over half the victims on Sept. 11 did not have a will. Given that they were relatively young and in good health with excellent jobs, they seem not to have thought it was necessary. I suddenly found it necessary.
"It was also important to me to avoid the problems I occasionally confronted after Sept. 11, when angry siblings, parents and relatives declared war with one another over the victim’s assets and argued over the 9/11 fund compensation. When millions of dollars are suddenly available for distribution, family members, fiancés and same-sex partners sometimes engage in bitter arguments. So I made sure that my wife and three children had a clear understanding of who gets what by providing each of them a detailed memorandum listing all of my assets and an explanation of how my wealth should be distributed after my death."
We are on a downsizing binge. A bag a day is my mantra. I am purging file drawers full of yellowing papers, closets crammed with outdated clothes, basement nooks stuffed with never-used heirlooms.
We may sell our house-- the one we lived in while we raised our kids; the one our grown kids and their kids visit when they come to town. Whether or not we opt for a simpler life style, the accumulation of 40 years worth of stuff stuffed into our house has to be dwindled down. It wouldn't be fair to leave so many years of papers, photos and assorted junk for our kids to deal with.
Would that a giant vacuum cleaner would appear and whoosh it all out of here. But of course it can't. And shouldn't. Papers-- old tax forms, loan applications, home improvement bills--have to be reviewed before we decide if they should be saved or shredded. Non-paper goods also need to be reviewed. Should my mother-in-law's collection of porcelain figurines be hauled to a consignment shop or do one of my children have a soft spot for them? Do either of my children want my mother's 18 place settings (18!) of gold rimmed bone china with hand-painted serving plates.
As I work my way through the maze and mess, I cling to five rules to help me downsize with respect for the past and a real-world view of the future.
Rule One: The shredder, the scanner and the recycling bin are my friends.
A big part of rightsizing is dealing with files of paper--old tax returns, insurance papers, client files (paterfamilias is a semi-retired lawyer), story files (I was a freelance writer for years) and everything else that's been boxed or put on a shelf in a basement recess. It's shocking how many personal identification numbers are on our papers. I shred what must be shredded, toss what doesn't have to be disfigured and have two small bins handy for the few papers I absolutely positively must save. Many of those I'll scan for a paperless save. I wanted to keep for my grandchildren a few of the magazine and newspaper articles I wrote at various points in my career. It was hard to let go of the hard copy, but in this day of smart phones, iPads and laptops, scanning them for possible future readers makes more sense.
Rule Two: The smart phone quickens decision-making
As I sort through "heirlooms," wedding gifts and other bits and pieces of our lives, questions arise about what to toss, give away or save. Does my daughter want her letter sweater from her college diving team? I snap a photo, text it to her and ask for a thumbs up or down. Ditto my son and his deep-water fishing pants with the boots attached. I send my daughter and daughter-in-law photos of my mother's china, complete with lavish serving plates (no takers). I snap shots of my mother-in-laws glassware. My daughter says yes to the oddly funky but graceful goblets. On I go, making decisions with a little help from my heirs.
Rule Three: Keep a rein on sentimentality.
Photos are the devil. We have boxes and boxes of them--ours and our parents'. Some are organized and in albums. Some loose but in subject groupings. I start with the stuff that's not organized at all. It is a trip down memory lane. I take Paterfamilias with me. We sigh and oooh and ahhh. Doubles and negatives are dumped as are blurry shots or photos of relatives or friends we don't recognize. It's endless and wrenching. We tell ourselves, one photo from each bike trip we took in Europe; one from each family vacation. There's a limit to how much can you save no less scan. Which leads to the next rule
Rule Four: Leave a legacy
Photos, letters, verses read at wedding ceremonies. Some of this I'll eventually scan into digital form, organized and saved for posterity or for that someday when I write my memoir--or pull together scrap books or videos that my children and grandchildren can study at their leisure. As I make my way through boxes of my mother's papers, I am tempted to toss it all out. Then I come across her naturalization papers. From 1922! Her name wasn't Rose, as I knew it. It was Roza. This is the raw stuff of history. Primary source. It may or may not be of interest to future generations but it feels important to save. I found myself applying two tests for what to keep and what to throw away: Would anyone but me be interested in having or seeing this item? If not, it goes out. Does the item have historic interest? As Alpha daughter reminds me, she's an historian. I shouldn't give away her raw materials.
Rule Five: Be generous to others.
We have more books than our bookshelves can handle. Libraries might want them. If not (our local libraries are no longer accepting used books), several charities will pick up boxes of books and send them to libraries who need them--perhaps in third world countries. That would be a perfect home for our complete works of Shakespeare and the children's picture books our Grands have outgrown.
Those towels that are fraying around the edges: animal shelters can use them to comfort pets that come into their care.
Furniture that won't fit in the new home: Places like A Wider World will pick up dressers, sofas, rugs--even beds--and use them to help furnish a home for someone less financially fortunate.
Then there is the cache of toys we kept on hand for visiting grandchildren. What they loved to play with when they were two years old is no longer a joy to them at ten. There are places that take used toys in good condition. One of my prizes is a Pony Land house, but it's loaded with sentimental value. One of my Grands played with it endlessly when she was visiting, laying out all the pieces and singing to herself while she played. It's painful to let Pony Land go, but my Grand is now 12. Instead of just sending Pony Land to a charity, I give it to one of the workmen repairing our roof. He has a six year old. It's a comfort to know Pony Land is going to a good home.
A lot of parents--and adults who aren't parents--swear by tough love: Once the kids are grown and flown, they're on their own. They should live within their means and not come running to the bank of mom and dad to bail them out.
Yet, many of us find that a hard dictate to live by. We may want our college grad to get that PhD in American history, even if it means we provide a little sustenance along the way. We may encourage our child to take that job with a non-profit that's helping register voters in poor areas of the South, even if it barely pays a living wage. Then there are life's emergencies and tragedies. A child's spouse is disabled; a grandchild becomes ill. Wouldn't we want to hold out a helping hand and, if we're no longer here to oversee the stipends and handouts, make sure there's no gap in the funding?
Not to be morbid about it, but if we want to make sure that when we die a grown child has funds immediately available for a situation we're overseeing now or for an emergency that could occur in the future, what sort of plans can we make?
Here are two ideas:
One is to set up a joint tenancy bank account now, which would be accessible to you and your grown child. When you're no longer around, it's all your son's or daughter's. That means the money is immediately available whenever it's needed even if it takes weeks or months for your estate to be settled.
But better know your child. He or she could withdraw emergency funds before there's an emergency. As one financial planner put it, "If a child is having financial difficulties to the extent that a monthly stipend is needed to keep them afloat, chances are they may lack the discipline needed to resist taking the money out of the account prematurely." One other hitch: joint accounts held in the names of the parent and child are exposed to the creditors of both. If your child has creditor problems, the joint emergency account could be levied or even claimed by the child’s creditor.
The other idea is to give the trustee or proposed executor of your estate clear and legal directions to make an immediate distribution to the child who needs support. You can fund the request by either setting up a joint account with your trustee or executor, making cash available to them or giving them a cashier’s check to pass on to your son or daughter at the time of your death.
Meanwhile, let's hope they're in good health, on solid financial ground, living a joyous life--and don't need your help.
The story itself takes us --parents of grown children--to task for wanting to save some of our nest egg for our children. As in, we "cling to an intention to leave something behind." This devotion, we're told, "may also be the height of foolishness."
Here's the rationale: After we've spent nearly two decades investing tens of thousands of dollars to rear and educate each of our children (and for an increasing number of us, backstopping our kids who are not quite financially independent), we should not feel obligated to provide even more money for them. We would do better to spend our retirement money in the here and now--either creating meaningful memories with our grown kids and their kids or on top-notch care that can make our elder years more comfortable and graceful.
Nor do most of our kids want us to save our money for them. According to recent research, if we were to ask our grown children about whether they are counting on an inheritance, the answer is likely to be no. In an article that the journal The Gerontologist published last year, Kyungmin Kim and four colleagues polled both older Americans and their adult children about whether they expected to leave or receive an inheritance.
The results: Among the parents (ages 59 to 96), 86.2 percent expected to leave a bequest. But just 44.6 percent of the children (ages 40 to 60), thought they would get one.
There was this P.S. to the stats: "Although bequest decisions are circumscribed by parent's financial resources, our findings suggest that they are also a continuation of established patterns of exchanges."
Another survey in 2014 by the Insured Retirement Institute found that our expectations about bequests had changed. Today, only 46 percent of boomer-age parents believe it’s important to leave an inheritance to loved ones. In the past, that figure was closer to two-thirds.
Of course, there's no saying how much that bequest--expected or unexpected--might be. It might be all that's left after we've spent what we could on ourselves (and the memorable moments)--and ran out of time to spend it all.
In her blog After the Kids Leave, Karen Irving writes about downsizing in preparation to a move to smaller quarters. Clearing stuff up, cleaning it out: This is something about which many of us have thought, fantasized, made decisions or delayed decisions. In previous posts on Leaving a Legacy, I've written that cleaned and cleared closets (whether or not we're moving) are part of the legacy we leave our grown children and grandchildren--the gift is that it's something they won't have to do for us.
In her post on tips for downsizing, Karen takes note of a guiding principle, thanks to William Morris, propounder of the English Arts and Crafts school of decoration. His words--her mantra and now mine as well: “Keep nothing in your houses that you do not know to be useful, or believe to be beautiful.”
As I tackle the mess of stuff in my basement and try to de-clutter my living spaces, I am tacking on an additional point to the Morris dictum: Check first with your grown children before tossing anything out--photographs, letters, figurines, decorative boxes or century-old baby shoes. There might be items they treasure for sentimental or other reasons. It's okay to store if for them; just be sure they will be willing to haul those treasures away when the final cleaning and clearing takes place.
