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Unless the parents are very well off, the problem with doing that (passing on wealth ahead of time) is that you don't know how much they will need for long term care later in life. Before my grandma died, she was about to be moved into a long term care facility that would have cost $11k per month. That eats through money very quickly. What if they had to live in someplace like that for 10 years? Both of them? Hopefully all the siblings who got early inheritance didn't squander it, or the rest will get left paying a disproportionate amount of the costs.
Personally, I think it is better to pay a couple thousand and have a trust set up, so that the parents can use the money as long as they are alive, and still transfer it easily to the kids when they die.
But back on the OT, yes, it seems like many families have someone like that. I have an aunt on one side and a 2 cousins on the other side who have convinced someone else to carry them along. But as Escort Rider mentioned, it really is less about conning (in most cases) than it is about mooching off an enabler. If you don't have an enabler, in most cases, the moocher will figure something else out. If the family comes together (it has to be all of them) and says "buck up, get a job, and be an adult or don't come around us at all", they usually will do just that. But when the family lets it go on and on with no repercussions, there is no downside to being a moocher, so it will continue forever.
Unless the parents are very well off, the problem with doing that (passing on wealth ahead of time) is that you don't know how much they will need for long term care later in life. Before my grandma died, she was about to be moved into a long term care facility that would have cost $11k per month. That eats through money very quickly. What if they had to live in someplace like that for 10 years? Both of them? Hopefully all the siblings who got early inheritance didn't squander it, or the rest will get left paying a disproportionate amount of the costs.
Personally, I think it is better to pay a couple thousand and have a trust set up, so that the parents can use the money as long as they are alive, and still transfer it easily to the kids when they die.
I wouldn't say my parents are necessarily wealthy, but they are comfortable enough to the point where giving away $70k each year to their heirs isn't going to hurt them in any way. Between land rent, social security, investment dividends, retirement plans, etc; they do well enough to basically live however they want in their golden years. My siblings and I have always told them that we don't care how they spend their money.
As far as nursing home care, they both have large nursing home insurance policies which WOULD cover many, many years of care in a facility if ever need be. They also have their farmland, houses, and valuable items in a family trust fund of which I'm the executor.
My case isn't unique, most parents tend to want to leave something to their heirs. A very small percentage of children willingly con their parents out of money, many parents simply decide to pass down the wealth while they're still alive.
Doesn't sound like anyone is putting a gun to his or hers parents heads. They are free to do as they like. Plus who knows, maybe they did very well financially to the point where they can easily do both. Also, where did the poster say that they "deserve and inheritance?".
A few general observations.
Elderly parents often find themselves in a situation in which they no longer trust themselves to make their own financial decisions. So they just ask one of their children to help them manage their finances. It is not unusual for one child to recognize this, and butter up the parents, in order to curry favor and be seen as the more deserving of the children. A child so favored can very easily exercise self-serving power, in which it is not necessary to hold a gun to the parent's head. This sometimes even turns out to be a niece or nephew or grandchild, who even work out pay-on-death instruments that avoid probate and pass much of the wealth directly to themselves. No gun necessary to the smooth-talking manipulator.
As for "deserve an inheritance", succession and probate law in every state holds that certain family relationships deserve an inheritance, and if a will is nonexistent or faulty, the courts will rule that children all have an equal entitlement to an estate. And even an airtight will that cuts a child out of an inheritance can be contested successfully if the court believes the will was signed under duress or coercion.
Please point out where I said I "deserve" an inheritance, I wrote no such thing.
And why should they? I never said they needed to, but of their own decision, they decided it should be more financially beneficial to give us money each year while we're still young. My parents have done very well for themselves, my dad was an Iowa farmer for 40 years and with the price of land nowadays, the amount of land rent we receive is to a point where my parents simply don't NEED the money anymore. Why not pass it on to the next generation instead of waiting to inherit it when they pass away?
Does this make sense? Do you understand the rationale behind their decision now?
Yes, i understand better.
I agree that it is their choice and if they've done very well, there's nothing wrong with passing on the wealth to your loved ones....and essentially, making their lives a bit easier.
i also understand that you didn't say that you or your siblings deserve the inheritence. i don't know why, but i got that impression reading your post.
I do however think (and this is not towards your post) that it's wrong to assume that parents are 'supposed' to leave something behind for their kids. i'm a firm believer that you should have what you yourself earned....and not look for handouts necessarily.
I myself plan on spending every last dime i have by the time i die.
Maybe i'll feel differently when i have kids.
Yes, i understand better.
I agree that it is their choice and if they've done very well, there's nothing wrong with passing on the wealth to your loved ones....and essentially, making their lives a bit easier.
i also understand that you didn't say that you or your siblings deserve the inheritence. i don't know why, but i got that impression reading your post.
I do however think (and this is not towards your post) that it's wrong to assume that parents are 'supposed' to leave something behind for their kids. i'm a firm believer that you should have what you yourself earned....and not look for handouts necessarily.
I myself plan on spending every last dime i have by the time i die.
Maybe i'll feel differently when i have kids.
Cheers!
I don't agree that children should have an entitlement mentality either, I believe in working for what you have.
My siblings and I have always told our parents to enjoy their retirement and not worry about leaving us gobs of money. My parents are snowbirds and have two homes- one in Iowa and one in Arizona near my sister and I. At last count, they have 6 vehicles between two homes. They travel when they please, go out when they want, and generally don't deny themselves of any indulgences...and we're all perfectly fine with that.
It's nice getting that check every year but it's not necessary. We've all been getting these checks for a few years now and it definitely comes in handy when buying a new car or something.
I think there is a difference between "conning" a parent(s) out of money versus a parent(s) willingly giving their children money that they'll probably inherit anyway.
I have 3 siblings and my parents regularly give each of us a check once a year to the tune of $12K each (not reaching the $13K yearly amount that could become taxable under the federal gift tax). All of us are in our late 20's and early-mid 30's and it's a convenient way of passing the inheritance without having to pay a massive inheritance tax later in life.
This is acceptable in my view because it's simply passing wealth from one generation to the next.
I think "conning" a parent(s) out of money would be much more akin to a child having full control over the assets and using that money to subsidize their own lifestyle. Often times a parent is either incompetent of handling their own funds at this point or they have some sort of illness barring them from doing so.
Big difference, I don't think that because parents transfer wealth, that their children are "conning" them out of anything.
Quote:
Originally Posted by Thinking-man
that, in my opinion is terrible.
why do you and your siblings 'deserve' an inheritence? why shouldn't your parents spend up to and including the last dime that they have (that they persumably worked hard for), as opposed to leaving you and your siblings money now, or later?
My parents did the same thing. None of us kids needed the money they were handing out, but it's what my parents wanted to do. They also gave a lesser amount to their grandkids.
When we siblings were growing up, money was tight, with farm profits going to machinery, etc. In their later years it made my parents feel good that they could give us some cash. I tried to talk them into spending more on travel, new cars, etc., but they already did all of that. For us to refuse their gifts would have been hurtful to them.
I think there is a difference between "conning" a parent(s) out of money versus a parent(s) willingly giving their children money that they'll probably inherit anyway.
I have 3 siblings and my parents regularly give each of us a check once a year to the tune of $12K each (not reaching the $13K yearly amount that could become taxable under the federal gift tax). All of us are in our late 20's and early-mid 30's and it's a convenient way of passing the inheritance without having to pay a massive inheritance tax later in life.
This is acceptable in my view because it's simply passing wealth from one generation to the next.
I think "conning" a parent(s) out of money would be much more akin to a child having full control over the assets and using that money to subsidize their own lifestyle. Often times a parent is either incompetent of handling their own funds at this point or they have some sort of illness barring them from doing so.
Big difference, I don't think that because parents transfer wealth, that their children are "conning" them out of anything.
Went to school with a guy who got POA for his ailing mother after his fathers death. He blew over a million in her retirement saving on vacations, golf and spa trips, and of course...pay per view and phone sex. His other siblings turned him in. I hope he gets the chair.
Elderly parents often find themselves in a situation in which they no longer trust themselves to make their own financial decisions. So they just ask one of their children to help them manage their finances. It is not unusual for one child to recognize this, and butter up the parents, in order to curry favor and be seen as the more deserving of the children. A child so favored can very easily exercise self-serving power, in which it is not necessary to hold a gun to the parent's head. This sometimes even turns out to be a niece or nephew or grandchild, who even work out pay-on-death instruments that avoid probate and pass much of the wealth directly to themselves. No gun necessary to the smooth-talking manipulator.
a guy on another forum im a member of posted one day that he was very angry at his aunt because she wanted to split the inheritance evenly with his father. apparently, his father had become responsible for helping take care of the day to day things of the mother. he then assumed that he "deserved" a greater share of the inheritance and basically dictated a split. i told the guy that his father was wrong to think he should be able to decide on his own how much more of his parents money he is entitled to. but it was interesting to see the psychology there. i feel he was being opportunistic and trying to get extra money for himself and using his assistance as an excuse.
Went to school with a guy who got POA for his ailing mother after his fathers death. He blew over a million in her retirement saving on vacations, golf and spa trips, and of course...pay per view and phone sex. His other siblings turned him in. I hope he gets the chair.
He had siblings and they weren't involved enough to check what's going on with the finances? Was the sibling supposed to be the most responsible of the others?
I've heard of similar stories where a son/daughter will blow through their parents money like none other while the parent has no idea what's happening. It's terrible and definitely a big problem in our society. Hopefully my parents will never be in the state where one of us will have to look after their finances anyway, I would rather not manage all of their investments, rents, houses, taxes, etc anyway; too much of a headache!
Think there are many cases like this...my brother-in-law is in his 40s and has never supported himself, he gets all his money from his mother. Even when he does work he blows all the money and relies on his mom to pay all the bills. But she continues to do it. She complains about it, but doesn't seem to be interested in doing anything to change the situation.
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