“I don’t believe in inheriting money,” CNN host Anderson Cooper recently told Howard Stern on Stern’s radio show. Added Cooper, a son of designer and heiress Gloria Vanderbilt: “I think it’s an initiative sucker. I think it’s a curse.”
To leave an inheritance or not to leave an inheritance? It’s a very real question and, for some, a troubling one. Moreover, whether you choose to leave assets behind or not, you must plan accordingly.
American attitudes toward inheritance seem to be shifting, partly by fiscal necessity in the wake of a global financial recession, and partly due to a shift in values or beliefs.
Forbes explored this difficult and interesting subject a short time ago in an article titled “What Kind Of Inheritance Do You Owe Your Kids?”
Regular readers may have heard the statistic before, but the numbers don’t lie; the original article pointed it out once more:
Only 46% of boomers believe it’s important to leave an inheritance to loved ones, according to a new survey by the Insured Retirement Institute, a retirement-income industry group. In the past, that figure was closer to two-thirds.
Is it no longer important to leave an inheritance? Is it actually important NOT to leave an inheritance at all? Anderson Cooper made news last month for first being disinherited by his mother, Gloria Vanderbilt (yes, of those Vanderbilts), and then blithely accepting it and championing the motive against inheritances as ‘initiative suckers.’ Is he correct? Some disagree with him based upon just how much opportunity a well-placed inheritance can bring to a loved one; seeing it as a ‘leg-up’ rather than a ‘hand-out.’
Most critical is that either course of action requires thoughtful planning. Our legal system is designed to make sure assets go somewhere when we pass on – someone has got to own it, after all – and so each state has a sort of a “statutory one-size-fits-all” default that can come into effect during probate when there is no plan in place.
Whether you are or are not leaving an inheritance, the laws on the books will rarely dispose of your assets as you would have seen fit. Moreover, taxes and legal costs will mount during this inefficient process. Therefore, a thoughtful plan for the dispensation of your assets is of immense importance. And, with a little extra work, your assets can also be made to do a great deal of good work after you are gone, even if an inheritance is not what you desire to provide for a specific person or persons.
Given these points, what do you value and how do you wish to leave your assets? Will there be an inheritance and, if not, what is to be done?
Reference: Forbes (April 14, 2014) “What Kind Of Inheritance Do You Owe Your Kids?”