An inheritance can be a life-changer.
Yet, it’s prudent to not assume anything in life, especially with respect to an inheritance.
Risky To Assume
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.
What Could Go Wrong?
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 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.
Meanwhile, his much younger wife remains mentally competent and becomes his DPOA (Durable Power of Attorney).
As a result, beneficiaries get switched out, putting at risk their financial future if they were counting on the inheritance.
I Have Seen This Happen
Yes. It is why I urge clients to not rely on inheritances or, at a minimum, to have a Plan B in case something changes.
Losing someone we care about is its own loss that can’t be measured.
Compounding that loss with an inheritance we assumed would result only makes it that much harder to adjust to life without them.
Next Step
Ready to take the next step and work with a fee-only CFP? Reach out to schedule a Discovery Meeting to learn more