This post is not about me. My parents are both still around and when they do go the only inheritance I will see will be personal items like paintings and dishes and furniture. My parents had to take out a mortgage when they were in their early 70s to pay for major home repairs that were not covered under their home owner’s insurance. They live in a flood plain and the repairs were directly related to water damage. The pension my father receives from his work and the Canadian government pensions they both receive mean that I will not have to help them financially because they have enough to live comfortably and pay all their bills. Nothing extravagant but comfortable.
The mortgage will mean that when their house, their principle asset, is sold there won’t be much money left and one or both of them may require long-term care which will take all of their money. I am not looking for, expecting or trying to rush the passing of the family heirlooms to the next generation. This is about other people in my life who have received an early inheritance.
A coworker who struggles with money and had the bank convert her line of credit to a straight loan recently ( read about her here http://solvingthemoneypuzzle.com/2013/01/23/money-lessons-learned-in-the-lunch-room/ ) came in to a large inheritance from her husbands grandfather. Well, she thought there was going to be a large inheritance but the elderly man wisely left a lot of money to the irresponsible woman’s very young daughter in a trust. I guess he was hoping that brains and common sense skipped a generation and was hopeful his great-granddaughter wouldn’t be so wasteful. My coworker and her husband did receive some money but did not put it towards debt or savings. She seems to have no plan for the money but they have been out to dinner every other night and to the movies several times during February. It will be frittered away in no time.
One of my mother’s best friends was a wild woman named Shirley who always kept her spare golf balls in the groove between her ample cleavage but they would inevitably bounce out on to the green when she bent over to clear debris from the path of her putt.
Shirley and her husband received nice inheritances from both sets of parents when they were in their early 30′s. That meant the end of the mortgage, a lovely cottage and a brand new car when my parents were scrimping and saving to replace their aging washer and dryer. My mother always said that the inheritances at such a young age changed her friends’ lives. They had travel and dinners out and a sense of security that my parents did not experience until they were in their 50s.
A couple I see socially from time to time were lucky enough to inherit a beautiful farm with a lovely stone home when they were in their 30′s. They were given a free home and a property that generated a small income from the rental of the land and barns. The income was enough to pay their property taxes and insurance. They took out a mortgage on the home to pay for renovations (sunken tub, hand-crafted kitchen cabinets, tile and hardwood floors) and ended up with a family trip to Disney and a truck with so much chrome on it that he had to wear sunglasses to drive it at night.
The trip, the truck, the renovations and lots of other fun stuff all ended up on the mortgage. His friends always said that he was a great guy but he suffered because of his terrible allergy. He is allergic to work. The work allergy meant the bills didn’t get paid and the bank sold the farm. From a farm with no mortgage that paid most of its own bills to an apartment in town. That husband and wife were young when they received their inheritance but it didn’t help them at all. I am not sure they will ever be old enough to deal with any financial windfalls or responsibilities. 20 years later they are still in an apartment.