A windfall of money from someone passing away can be a life-changer.
Yet, it’s prudent to not assume anything in life, especially with respect to an inheritance.
But 2 things determine if a beneficiary counts, quite literally, on it.
Their relationship with the grantor of the inheritance. Be they a parent, a grandparent, or other relative, it could be implied or explicit that they are a beneficiary.
It might be fair to say that the probability of relying on it is higher the warmer and more emotionally stable the grantor.
The beneficiary’s relationship with money. Depending on a person’s maturity with their own money, they may understand that relying on funds that they have no control over might be a risky proposition, and that they should mitigate for not receiving it.
So, given the risks involved with assuming an inheritance, let’s consider the factors that lower the probability of receiving an inheritance.
The biggest one?
The grantor may become widowed and then….remarry.
Regardless of your personal relationship with the grantor, everything changes if they remarry.
I’m definitely not trying to come across as predatory or opportunistic with respect to a grantor, but risk factors exist, especially for a beneficiary counting on an inheritance.
They include:
- 61% of widowers are engaged in a new relationship less than 2 years after their wife’s death.
- Widows? About 20%.
- In aggregate, more than 10 times as many widowers than widows over 65 remarry.
When a remarriage happens, it’s incredibly prudent to reassess how likely the inheritance is to occur.
Widowers may remain emotionally connected to their beneficiaries and ensure that they continue to be beneficiaries…but many times this is not the case.
If the widower is a decade or more older than the new wife, it’s safe to assume that as the widower ages, his mental capacity will diminish the older he gets while his much younger wife is still mentally competent and eventually becomes his DPOA (Durable Power of Attorney).
Beneficiaries get switched out or deleted every day of the week as a result, putting at risk their financial future if they were counting on the inheritance.
Have I had this happen to clients?
Yes.
Am I, as a result, incredibly biased in urging clients to not count on inheritances or, at a minimum, to have a Plan B in case something changes?
Yes.
Losing someone we care about is its own loss that is unquantifiable.
Compounding that loss with an inheritance we assumed would result only makes it that much harder to adjust to life without them.