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CathyA
1-7-11, 2:38pm
My family was very dysfunctional, but they had decent jobs. Besides a few pieces of furniture, they left us kids nothing. In fact, DH and I probably kept my mom off Medicaid for 20 years.
They didn't want to be bothered with owning a house, so they rented. I keep hearing of people who get large sums of money from their parent's inheritances and have to confess that I'm a bit envious. Instead, we forked out tons of money to keep her off medicaid.
I know I must sound horrible. I just need to whine a little. DH's mother had a bit of inheritance, and left her house to DH and his 2 siblings. But they couldn't stand to sell the house, so my BIL is living in it. Hopefully my children will at least see part of that someday.
If I may ask.....what have your experiences with inheritances been? You don't need to talk about amounts.....just if you got one. Maybe parents have good intentions, and then they live so long that they use it all up?
Maybe I'm just holding a grudge. My mother died recently and I was going through some of her old papers today and was reminded that while we were struggling to pay for alot of her living expenses over the last 20 years, she was giving $800-1,000/yr to various charities. :0
Just needing to whine/vent a bit.

Zzz
1-7-11, 3:22pm
I'd rather my parents used what they have to live a more comfortable life and burn through all of it than worry about leaving an inheritance. Seriously. I hear "We can't afford X. We can't spend money on Y." But, they own property that could be sold and fund the rest of their lives in relative luxury...and enough unneeded (stored) "stuff" that could be sold at a living-estate sale to provide a lot of luxuries.

ApatheticNoMore
1-7-11, 3:25pm
I think they are common among a certain class and up, and that it's a dead class giveaway when you admit to having gotten one. Of course there are exceptions to all such generalizations, such as the people you hear about who were maids or something and never bought anything their entire lives and end up passing down a million or something :). But by and large, it's kinda a class marker. If the media pretends everyone gets it or something, it's because it likes to pretend everyone is at least middle class.

My 'rents are still alive and I really have no idea. I'll probably get something, but I don't count on it. And yea parents can easily live long enough not to be able to pass on much (long term care and the like will cost it). That's why I said, I don't know the future. However, even my grandparents left us grand kids money right before they died (not Rockefeller, "you never need to work in your life" money or anything, but something). On that score I think I was just lucky :D

In general I think inheritances are going to be a LOT rarer in the future. The economy is tougher, everything costs more, investments are shakier, and people just don't save as much.

kib
1-7-11, 3:34pm
I am very grateful for my fiscally responsible parents. They have provided beautifully and carefully for their own old age. I admire my father's wisdom in this area very much; he is a depression era baby and he recognized the value of "making hay while the sun shone" in the heyday of the 80's and 90's - IRA, pension, SS, saving and careful investing created the multiple income streams that keep their position secure today even in such a chaotic financial climate. Whether or not there will be an inheritance depends to some extent on fate, but they've always been great role models about money, and set it up the way I would like my own finances to be set up: it will get them through without ever burdening anyone else, and if life remains on a smooth glidepath, then someone else will benefit from their planning when they're gone. Mom and Dad, a rave to you. :)

simplelife2
1-7-11, 3:54pm
One, why was it so important to keep your mom off Medicaid? If she was qualified for the program and it's available, why not use it? I know some don't do it because of losing a house or assets, depending on the state, but that doesn't seem to be the case. You could have still supplemented it by buying her things to ensure that she was well taken care of. While you were paying her bills, you were denying stocking money away for your own retirement. And, there is no government program to cover that gap. It's no different than funding you kids' education at the expense of your retirement.

And, secondly, even if it's family, it is up to us to still protect our own interests. If I was helping out a family member, I would expect full financial disclosure. If you were investing in a business, wouldn't you expect to see the books? How is it any different if you a investing in a person.

I certainly would feel taken advantage of in this situation, but I think you also should explore your role in letting it happen so that it does not happen again in the future.

As far as inheritances go, it's nice if you can do it. But, you shouldn't suffer in order to do so and children certainly shouldn't feel entitled to it. My dad is lucky enough to still have really good union-sponsored insurance to take care of him throughout retirement, so there will be a small amount for each of us from the sale of his house. I don't believe it's fair for one person to take possession of the house without compensating the others fairly.

With your situation, there's no sense in dwelling on it. Forgive her, forgive yourself and let it go. Nothing good will come of letting it fester.

Zzz
1-7-11, 3:54pm
Lots of farmers bought small family farms way back in the day when land was cheaper. If they happen to live in state where land prices increased, then even after a pretty dang tough life their land can be worth quite a bit, while the family always lived working class poor. Of course, many other farmers went "bust" especially if they bought expensive farm equipment they couldn't afford. Others worked second and third jobs (maybe both spouses) and held onto their land, though they don't benefit from it much.

Gina
1-7-11, 4:04pm
There are so many variables... such as how long a parent lives, the state of their health, if they were 'savers', where they lived, and perhaps how many relatives any $ might be divided by...

I think certainly they are more common with wealthier people, but that can be deceiving. Many people who are moderately wealthy (not Rockefeller wealthy) are low-key. Remember the book The Millionaire Next Door? Many people are simply natural savers, invest over the years, and it builds up. Coupled with a bit of luck, that can leave something for the kids.

In addition these days the location parents live can be a factor, and if they purchased a home and lived in it for decades (and didn't borrow on it), that alone can determine if an inheritance will be coming. In many parts of California a modest home can be easily worth 500K (or used to be). Real estate market fluctuation is another factor... >8)

Many people are not only loath to talk about what they have inherited, but many would never tell anyone besides a spouse if they have inherited anything at all.

And if you have lots of brothers and sisters, heirs will get smaller pieces of the pie.

Bootsie
1-7-11, 4:15pm
I have a few friends who were able to purchase homes (or second homes), finance their children's college education, upgrade their lifestyle, etc. because they received inheritances from a parent or grandparent. I do not expect this to happen to me. When I was a young adult, my father told me the financial situation of his will: everything of his would go to my mother. He didn't say more than that, but I got the message that I was responsible for myself, as were my older siblings. As a young person, I wasn't thinking about future inheritances at that time, but I'm glad he told me. When he died a few years ago, none of my siblings expected anything (and we got nothing); everything went to my mom, and that is what she is living on. My hope is that she uses it all up on herself. I expect nothing financial when she passes away.

CathyA
1-7-11, 4:16pm
Thanks everyone. I guess there are a ton of variables as to how much people have to give their children. Yes, I should have taken more responsibility to move her out of the condo and let the chips fall where they may for her, financially. There were many years when I was consumed with bad health and child raising, and my husband starting up a new business, and life got away from us. That's a good point about "why didn't we just let her be in Medicaid?" Very good question! I guess DH and I were both drowning and it was easier to just keep paying her way, than have to deal with changes. If I'd known at the time that she was giving so much of her money to charity, I would thrown a fit. But......its all water over the dam now. I do need to let it go. Fortunately, many years ago, before we were estranged from her, I asked her to deal with her own funeral expenses......and she did.
You're right simplelife.......letting it fester is no good.
Kib.....I envy the parents you have! What great role models they are.
I think growing old is so much more expensive now. And because of medical advances, people are living longer.....even if they have major diseases/illnesses.

I agree with compensating other members of the family, if you're living in the inherited house, but DH's family is extremely close and they all thought it was okay. But I knew my MIL very well, and she would have wanted us all to benefit from it. But in my BIL's defense......he did take out a huge loan to fix the house up. Here's hoping he lives long enough to pay off that loan and we don't lose the house!
Can you tell the lack of sun in the winter is getting to me? haha These things tend to start to bother me alot when winter is here!
Thanks for all your perspectives!

Stella
1-7-11, 4:33pm
I have no idea how common inheritances are overall. I know that when my dad's parents died each of their four kids got some money from the sale of their house. I think it was maybe $20,000.

I got about 5,000 from the estate of a great-aunt to help with college. That was a surprise.

My mom's mom is still alive and has a fair amount of money. My mom has a reasonable idea of how much she will inherit and it's her plan to buy a condo and use the rest for her retirement. My sister, cousins and I will all get some money from that estate too. It's nothing I'm banking on, but it will be nice when/if it happens.

I'm in an odd situation that I am already recieving my primary inheritance from my parents. We moved into the house I grew up in and Dad has moved in with us. When DH is done with school we'll pay off a relatively small loan of my dad's in exchange for the house and own it free and clear while we all continue to live together. It's kind of a Jane Austen-y type arrangement, but we all like it. Dad gets people to cook and clean for him in his old age, as well as not having to pay utilities or taxes, and we get to save years and years of mortgage payments and interest. My sister will inherit Mom's condo.

It sounds like this is maybe just one of those grieving things people go through. I think it's a normal part of the emotional process to think about these kinds of things, kick them around in your head and then decide to let them go.

catherine
1-7-11, 5:24pm
I don't think it's a class thing, as ApatheticNoMore suggested. I just recently posted about the inheritance my DH got from his mother who died this past summer.

She quit school at 14 in Scotland and worked at the "Co" (co-op). When she came to this country she worked as a building superintendent with her husband. They moved to Westchester, NY in 1952, and paid off their mortgage in 10 years. But her husband died of a stroke in 1965---thank God she already had her parents living with her and her two boys (although she talked for her whole life about the downside of that). She got her driver's license after her husband died, and got a job as a sales clerk in Macy's. She was about to retire when they asked her to be an administrator in the Retail Worker's Union, so she did that until she was 72, upping her pension because of her increased salary. She was a real pistol, and even at that age, she fought for her workers.

When she died at age 85 (never dipping into her principal, but living off SS) she had about $200,000 in cash plus a paid-off house. Some people might think that's a little. I think it's amazing. She always gave when her sons or grandchildren (or DIL) needed financial help. She was NEVER in a position to need our help.

So, it's not a class thing. It's a way-of-life thing.

As for my own mother, she had nothing when she died. No home, no husband. Her health had been destroyed at age 50 with a brain aneurysm, and her belongings were destroyed in a fire after my uncle and I stored them in his barn when she became ill. Her "inheritance" to me was $60 that she took from under her bedclothes and gave to me in the hospital the night she died.

So it all depends. If you get one, thank God, and honor the loved one with the blessings.

Bronxboy
1-7-11, 5:40pm
My parents worked at blue collar jobs all their lives, and I am receiving a modest inheritance--sufficient to pay off a new kitchen in our house and do a couple of smaller things.

goldensmom
1-7-11, 5:51pm
I guess it all depends on the parents. I inherited the farm because I wanted it and my siblings inherited an amount of money equal to the value of the farm. Many of my similar aged friends inherited nothing. My parents felt the legacy of a farm was important as did I but money was more important to my siblings so it just depends.

Lainey
1-7-11, 7:46pm
I was helping a co-worker with some estate paperwork after the recent death of his last remaining parent. My co-worker has only one sibling, and they will split an inheritance of about $300,000 in cash, stocks, bonds, 2 cars, and the value of two small homes. This is from a rural midwestern family who lived regular middle-class lives.
But as others have said, the fates were fairly kind: there was no divorce, no disability, and no long-term serious illness - both parents had about 6 mos from onset of final illness to death. It showed me that if you can avoid those 3 things, even an average middle-class family can leave quite a gift to the next generation.

Reyes
1-7-11, 7:57pm
I have no expectations of money from my parents. Neither parent has any money. If money is exchanged, it is usually me giving my mother a "gift." (I don't like to give loans that I can't collect on. I'd rather just gift the money). If either parent did have money I'd be thrilled if they used it on themselves. They don't owe it me.

fidgiegirl
1-7-11, 8:34pm
Cathy, I very much fear I will be in your boots someday. My DParents, in my opinion, spend a ton of money on stuff they don't need, don't maintain, and allow to become junk. They are doing kind of ok financially NOW, but I worry about the future . . . they tell me things like that they won't have enough to pay their taxes (they are in a quasi-retirement, part-time employment, managing-own-tax-withholding kind of situation). I guess whoever advises them asked if they wanted to put away more and their answer is "No, we want to eat." But what they eat is take-out five out of seven nights a week (sure seems like it from a distance, anyway) and eating out every day at work! So it's that kind of thing that makes me a little nervous. When it comes to my parents, I have to remind myself not to worry about what might happen in the future - to only worry about it if it comes to pass. A million other things - good or bad - could also happen.

I hear ya about winter!!! Good luck working through it!

iris lily
1-7-11, 11:18pm
I am lucky to have received some money from my mom, but I didn't expect to. My parents always said when we were growing up: don't expect anything, we are paying for your education, that's your inheritance. She was in a nursing home for 5+ years but between her insurance and her income, it covered most of those expenses and only in recent months when the insurance ran out did her savings go toward nursing home care. We had expected her to to live longer and had liquidated her assests in order to pay nursing home costs.

It's just enough money to have a little fun, but not enough to get into trouble (not enough to buy real estate--that's trouble!!!). I've already given 10% of it away. I am going to attack the dysfunctional part of our household with this money and PAY someone to finsih the major construction on our first floor. 20 years of living with a construction staircase with no railings is too long.

My friend got a really nice chunck of change from her mother, a blue collar worker who was very very frgual.Unfortuantley, it was enough money to get into trobule and she did, buying real estate. That plan tanked and now I think she is worse off than before the mom money.

Wildflower
1-7-11, 11:41pm
My extremely frugal blue collar parents both died in their early 60's. They left behind $175,000 cash and a paid for house that was worth $97,000. The money and funds from the house sale were split amongst the family as dictated by their wills. Everyone has used the money in ways that my parents would have heartily approved of except for my sister. She basically blew her money and is in worse shape financially now than she was before....

CathyA, hang in there, hopefully winter will be over soon. I think about alot of things during these depressing cloudy days that I normally wouldn't so I totally empathize with you.... You did what you thought was right at the time for your Mother. Try not to dwell on it too much. I admit I have alot of grievances with my deceased parents too, but it does me no good to think about it too much.... I am grateful everyday for the money they left us as we were able to pay off our last remaining debt, our house which has made our lives much easier these days. My parents worked hard for that money and I so appreciate it despite our strained relationships.

pinkytoe
1-7-11, 11:51pm
My divorced parents died a few years apart and both left their estates to me and my three siblings. That was 20 years ago though when I was in my early 30s. The money was a godsend at the time...

djen
1-8-11, 3:35am
My husband's parents are alive as are mine, so we haven't been in a position to receive any inheritance yet. I'm not familiar with anyone's will, by my choice*, but my understanding is that we will not be getting anything other than some sentimental and practical items as people start to pass.

Some among our parents did receive sizable amounts of money when their parents, our grandparents, passed. But, that was a different generation with different situations. Our parents are all reasonable people, and none are on the dole or anything, but they're not building up piles of money just to leave them to us. And that's OK. I'd rather they use what they have to be independent and happy. :)

* I've asked everyone to tell me if I have a job (we're medical and financial power of attorney for some of our parents, for instance) but I'd really rather not know what assets are coming my way. I don't want my first thought when I find out that someone's died to be, "Yes, the grandfather clock is ALL MINE!!!!!" ;) So, I just stay away from that end of it and figure the if I don't know about it until then it will be a surprise happy spot in an otherwise crummy time.

Fawn
1-8-11, 8:13am
I don't think it's totally a class thing. My mother inherited nothing. Her father died when she was 13. Her mother made alot of money in business, lost a lot of it, remarried and died without a will. Her small estate went to her husband. My father's father died when he was serving in WW II. When her returned, he supported his mother until he got married 10 years later. She had some furniture when she died.

My parents lived frugally and saved a fair amount. My mother enjoys living on less than her income at age 79. She thinks it's a big game. My brothers and I will likely inherit some money.

My children may or may not. Their father owns serveral thousand acres of prime farm land and a 6,000 head hog operation. He has alot of business debt. The kids could inherit millions or nothing from him....just depends on what farming is doing when he buys the big plot. As for what they might get from me, it depends on how long I live and what illness I might have.

I do think it's better for people to not expect anything. People need to provide for their own lives. If extra money arrives, it can always be spent.:~)

mara61
1-8-11, 9:15am
My parents died relatively young (60's) and my siblings and I did receive an inheritance (something that I did with some of the monies was to adopt our youngest son from Korea). It came from a life insurance policy and the sale of their home. My father worked very hard his entire life and when the home sold (2006) it was already paid off. The monies went into a trust and was dispersed that way.

Depending on how long my in' laws live (I hope for a very long time, my FIL mom just passed away a couple of years ago at age 97!) my husband will receive an inheritance as will I presume my boys (most likely a trust for school). It's not an expectation, it's just there. A trust was set up a few years ago.

Tracy

CathyA
1-8-11, 12:04pm
Seems like my parents renting an apartment for 40 years was a big waste of money, but some people just won't want the hassles involved with owning a house. I never understood that, but so be it. Before that, for about 10-15 years they lived in parsonages (he was a minister), so I don't think they paid rent there.
My parents got a little bit of money when they sold my grandma's little house around 1975, and they lent me $2,000 to buy a new car, but they charged me interest. (can you believe that?). At the time, I was working 40-60 hours a week, totally supporting myself, living in very cheap places, but they still charged me interest. Thanks mom and dad.
I'm glad we're more helpful to our kids. :)

iris lily
1-8-11, 1:10pm
One side of my family has always had a little money, the other side--not. The side with "a little money" are entirely middle class. My grandfather had a steady job during the Depression. This job was always described as being a big piece of good fortune for them. These grandparents didn't have a house when I knew them, they were renters. Yet when they died my grandmother had a nice chunk of Iowa farmland that she received years previously from one of her relatives. That farm money is what sent my brother to college.

On the other side of the family, the ones with no money, my dad and his brothers paid their mother's rent for many years. This side of the family were farmers and had a tough time in the Depression, losing 2+ farms. They never had any real assets.

ke3
1-8-11, 1:29pm
My mom and late dad were decidedly middle class; but because of my father's obsession with wealth during the last 30 years or so, they ended up very well off. So I expect to inherit a good chunk someday; but who knows when that will be?

Because of my being ill, I may end up using up a good part of my inheritance before I get it. I have these three kids to raise. After that, I can live on very little.

grendel
1-8-11, 1:42pm
My father was retired military -- not an officer -- and my mother was a retired bank officer. They invested well and both died prematurely. They left my sister and I what they had set aside to live on for the next 20 years -- stocks, bonds, cash, land, vehicles, and two manufactured homes totaling about $500K. It doesn't make us rich, but it does provide peace of mind. Of course, I'd prefer that they had lived and used the money themselves. I miss them, and I'm grateful they learned how to handle money, and they passed on the money and the knowledge to me. I'm sure I could have still learned some things from them.

iris lily
1-8-11, 2:08pm
Someone I know was named in a will to get a ton of Iowa farmland, I'm thinking $300,000 or so. But that will was tied up in courts for years and the executor p*zzed away the money. He was a badnick who spent time in jail for embezzleing at the bank he worked for. After a dozen years this estate was settled and the person I know is getting only a pittance of the original amount, I'm thinking around $50,000 from all of that.

The lesson learned from this is: do not trust your embezzler son to carry out the wishes of your will if it calls for money to go to anyone but himself.

catherine
1-8-11, 4:04pm
My children may or may not. Their father owns serveral thousand acres of prime farm land and a 6,000 head hog operation. He has alot of business debt. The kids could inherit millions or nothing from him....just depends on what farming is doing when he buys the big plot.

I do think it's better for people to not expect anything. People need to provide for their own lives. If extra money arrives, it can always be spent.:~)

Makes me recall my uncle on my father's side. He was the family patriarch in a way, because he had a successful construction business, was very active and engaged and authoritative. He was always working on this deal or that deal. His homes were always unbelievable. He and my aunt had me and my three brothers over quite frequently--my dad was a drunk and my mom sometimes had her issues too, so my uncle and aunt would literally rescue us and we'd live with them for a week or two while my parents straightened their heads out. I wasn't jealous, just in awe of this family that was so DARNED organized and well put together! Each kid (I had four cousins) played three instruments and they'd have these big get-togethers in a huge family room my uncle built (before people had family rooms) and the family entertained the guests by playing as a sextet. Talk about the Brady Bunch.

I'm getting carried away with the story, but the point is, my uncle died unexpectedly at age 65. We figured his kids would be set for life. They didn't get a nickle. It all went to his second wife, and reportedly there was not as much as you would think. He had been in the middle of this big business deal when he died and somehow it really impacted his legacy (his financial one, anyway.)

You never know about "legacies" in the general sense, either. This picture perfect family wound up fractured in a few ways. My crazy family of origin is actually quite "normal" now in comparison. So you never know.

Sorry for the ramble, but I think the topic is very interesting.

TMC
1-9-11, 3:50pm
Seems like my parents renting an apartment for 40 years was a big waste of money, but some people just won't want the hassles involved with owning a house. I never understood that, but so be it. Before that, for about 10-15 years they lived in parsonages (he was a minister), so I don't think they paid rent there.
My parents got a little bit of money when they sold my grandma's little house around 1975, and they lent me $2,000 to buy a new car, but they charged me interest. (can you believe that?). At the time, I was working 40-60 hours a week, totally supporting myself, living in very cheap places, but they still charged me interest. Thanks mom and dad.
I'm glad we're more helpful to our kids. :)

Yes, I can believe that, my parents would not loan me money to purchase a car, would not co-sign for a loan for me when I was 20 something and working my first full time job.....than I find out 15 years later they did so for my younger brother who had no job at the time. At one point my parents purchased the empty 10 acre parcel adjacent to me. My father wanted to be rid of it so even though we were not terribly interested in having it we figured we would buy it from them. They had owned it for 4 months. They were not willing to sell it to us for what they had paid for it, they wanted to make a profit......how about that? :) Needless to say we did not buy it and we steer clear of their finances. It always amazes us when we hear things like this one's parents gave them a home or some property to build a home.....we couldn't even buy it at cost. :)

However on the flip side and more in line with this topic, they are worth at least a 1 1/2 million $$....cash. So for anybody who wants to know how to get rich....you just need to make a buck off of everybody.....and I do mean everybody. We do not expect to see any of their money. My parents will be the type to leave it all to my brother who is a financial disaster area or donate it to a cat. ROTFLMAO I am happier not expecting anything from them, we will make our own way in life and be proud to do it.

CathyA
1-9-11, 7:06pm
Wow TMC.........I'm sorry they treated you that way. I just don't understand how some parents can be like that, especially when they are doing well themselves.

Reyes
1-9-11, 7:18pm
I do not see it as a parent's responsibility to provide financial assistance to their adult children. If a parent chooses to do so that is fine (as I have chosen to pay for my kids to go to college), but I view it as a gift, not an expectation. I would not consider co-signing a loan for my children, and although I have not done so myself, I see nothing wrong with charging interest when making a loan. At the very least, I can see someone charging the interest they would otherwise lose by making the loan. It is interesting to me the expectations put on parents by their adult children.

iris lily
1-9-11, 9:47pm
...although I have not done so myself, I see nothing wrong with charging interest when making a loan. At the very least, I can see someone charging the interest they would otherwise lose my making the loan. It is interesting to me the expectations put on parents by their adult children.

Agreed, I always thougt t was the sign of a funcitonal family that DH and his parents, who lent money back and forth, would charge interest and have the borrower sign appropriate paperwork. I think there were family friendly loan rates, though.

loosechickens
1-9-11, 11:30pm
In our family, it's always been "family friendly" loan rates, usually somewhere in the middle between what the lender was getting on the money and what the borrower would have had to pay from a bank. A win/win for everyone. From when I borrowed from my grandfather when young, to when our kids have borrowed from us to start a business, etc.

One of those "invisible, wind in the sails" advantages of several generations having lived frugally and saved, that access to capital at advantageous rates, but in a way that assumes an adult responsibility on the part of the buyer, as opposed to a handout from the family.

Some in the Boomer generation HAVE to be getting quite a few inheritances, as I remember reading recently that the Boomer generation stands to inherit as much as twelve trillion dollars from the WWII generation.

kib
1-9-11, 11:40pm
Actually, tax law more or less demands that loans be made with interest. These are the basic options for transfer of money, under the law: 1. give a gift of $13,000 or less. That's completely "off the books". 2. give any amount you want as a gift, with the acknowledgement that this gift counts toward the eventual inheritance taxation exemption limit. 3. make a loan and charge a reasonable rate of interest. If you get caught making an 'interest free' loan to anyone, including a family member, you will be taxed on imputed interest regardless of whether you received any.



Set an Interest Rate
Interest-Free doesn't mean hassle-free. Many loans among family members are interest-free. But be careful. If you don't set an interest rate, the IRS, in its family-friendly way, will do it for you. And since that interest would be considered income for the lender, the IRS will happily tax the interest payments that were never paid. You have now entered the hideously complex world of "imputed interest." Essentially, the IRS, eager to raise revenue, has decided that for a loan to be a loan, interest must be paid, and if interest is being paid, someone is making taxable income.

The IRS's enthusiasm does not stop there. Not only does the agency place a tax on imaginary income, but it assumes that the borrower could not afford to make the interest payments (he had to borrow money, didn't he?) and then acts as though the lender gave him the money to pay the interest. Enter the gift tax. So the money the lender never received but pays taxes on anyway could also count against the $13,000 annual tax-free gift limit, and if it exceeds that, then the gift and estate tax exemptions.

Read more: Loans Among Family Members - Personal Finance - Debt - SmartMoney.com (http://www.smartmoney.com/personal-finance/debt/loans-among-family-members-9654/#ixzz1AbX1jmB3) http://www.smartmoney.com/personal-finance/debt/loans-among-family-members-9654/#ixzz1AbX1jmB3

CathyA
1-10-11, 7:50am
Gosh, I just would never consider charging interest on a fairly small loan to one of my children in their early-mid twenties.
I did pay my parents the interest back, on time, and with a little more as a thank-you. But underneath, I was irritated with yet another seemingly insensitive, selfish thing they did to me. That's probably what irks me the most. I had never asked anything of them, once I moved out of the house. Even though it might seem okay by some to charge interest, to me it felt like yet another slap in the face.

iris lily
1-10-11, 11:28am
Gosh, I just would never consider charging interest on a fairly small loan to one of my children in their early-mid twenties.
I did pay my parents the interest back, on time, and with a little more as a thank-you. But underneath, I was irritated with yet another seemingly insensitive, selfish thing they did to me. That's probably what irks me the most. I had never asked anything of them, once I moved out of the house. Even though it might seem okay by some to charge interest, to me it felt like yet another slap in the face.

Sure, I can see your attitude because your parents were not generous.

DH's parents were generous with what they had with their children, and that made all of the difference. That created an environment for DH to lend money to them when the family farm needed it and he knew they were good for it. And then, they lent money to him when he bought real estate. Back and forth, there was an atmosphere of generosity but not welfare.

loosechickens
1-10-11, 1:07pm
I agree with what Iris Lily said. In your case, Cathy, it was part of a pattern of no generosity to you. When our kids were young, and even now that they are middle-aged, we make gifts of money to them, as our parents sometimes mads gifts of money to us.

The loans with interest both ones we received and ones where we were the lenders were for things that the borrower might normally have gone to a bank for a loan, such as purchase of an automobile, home remodeling, etc. Because capital was available within the family, both the lending person and the borrowing person were better off to keep the transaction within the family, because in most cases, the lender was given an interest rate slightly above what he was getting, and the borrower was saving interest because the rate was below what he or she would have paid a bank.

We very recently lent our son money to help buy a business. He is paying us 4% interest which is better than the dividend yield of the stocks in which that money was invested, yet the rate is quite a bit below what he would have had to pay for a business loan.

I agree.......an atmosphere of generosity, responsibility, not charity or welfare, etc., Just a value of several generations being frugal and saving and investing and helping others in the family achieve that goal when needed.

In your situation, Cathy, I think I would have felt exactly as you feel. Exactly.

artist
1-10-11, 6:59pm
Just my perspective but I don't think it is a parent's responsiblity to leave money to their children. Dh and I are saving for retirement in the hopes that we can live a comfortable life, not be a burden to our son (praying on that one as all it takes is one major illness to wipe out savings) and to generously and freely give to those causes we care about. We indend to take care of us as best we can. We do not wish to leave our son with a windfall upon our dealths.

Mighty Frugal
1-10-11, 8:51pm
My parents are very simple folks and have been all their lives-children of the depression. They don't have a lot but what they have they want to leave to their children-well, my mom does! We encourage them to travel and enjoy their live but they assure us they do enjoy their lives-it just doesn't take money for them to enjoy it.

I know my mom WANTS to leave as much as possible to us. And I am following suit and would love to leave my boys buckets of money. I am pretty frugal and simple as well so I am hoping my retirement will be spent frugally and the more I can leave my adult children in the prime of their lives-the better.

I remember the first night we brought home our first son from the hospital. I held him in my arms and walked around the house showing him the rooms and I remember thinking 'this all belongs to him...I've only been renting it'. It was such an overwhelming feeling of release...as I now realized, you really don't 'own' anything-you're just borrowing it from your kids. I hope they carry this forward and leave a sizable chunk to their kids.

Granted we can't predict the future, so we don't know if we will spend every last dime on our own care, but I hope not. I hope to give with the living hand and get rid of everything before I die.

TMC
1-11-11, 8:22pm
Gosh, I just would never consider charging interest on a fairly small loan to one of my children in their early-mid twenties.
I did pay my parents the interest back, on time, and with a little more as a thank-you. But underneath, I was irritated with yet another seemingly insensitive, selfish thing they did to me. That's probably what irks me the most. I had never asked anything of them, once I moved out of the house. Even though it might seem okay by some to charge interest, to me it felt like yet another slap in the face.

I understand the way you feel. Maybe it came across in my previous post that I also think my parents are selfish, I do, for many more reasons than I could possibly go into here and certainly not just because they wouldn't co-sign a loan. In many ways they are toxic and I do my best to keep some boundaries between us. Just to clarify it is not about their money or an inheritance. I recognized long ago that I could not count on my parents financially or emotionally for support and have continued on in my life. These are grandparents who have not once babysat their grandchildren, have not come to a single baseball game, dance recital or school play. They are busy with their own lifes and make it clear that they will participate in our lives only when it is convenient for them. For these reasons I find them to be very selfish. But my story is not so bad, I was never abused, always have had plenty to eat and am a productive, self confident adult. I deal with it.

Hattie
1-11-11, 9:54pm
I truly believe that the goal of this game of life is to end up with ZERO money in the bank (and owing no money). Hubby helps my Mom with her investments and every time she feels guilty about spending some of her savings I tell her that it is her money to enjoy and spend.

When my grandparents died and, more recently my Dad, all I asked for was one special item to remember them by. I didn't want anything expensive, just something small. From my Grandmother's estate I wanted the old pair of prospecting pants she wore as a teenager when she went prospecting with her Dad. I got those pants and proudly display them in my livingroom. *S* From Dad's estate I got an old tin lithograph he made when he worked years before. It's in the same room as my Grandmother's pants. I cherish them more than any money I might have been given (and there was none *S*).

When Hubby and I downsized into semi-retirement, we had a "get your inheritance now" party. Our new home is very small so we had to get rid of all our "stuff". We threw a big party with our kids and gave each one a different coloured sticky note. We drew numbers and the kid with number one got to put a sticky note on something they wanted. We went down the line of kids over and over again until there wasn't anything left in our house that didn't have a sticky note on it. Then the kids had 2 weeks to take their stuff out. Everyone had a great time and we got rid of all our excess stuff that we couldn't take with us. It was fun and surprising to see what each person (5 in total) chose.

CathyA
1-12-11, 6:56am
TMC......I'm sorry your parents are so selfish. There are all types and degrees of abuse. I don't understand why people have children, if they're not going to give it their all.

JaneV2.0
1-12-11, 1:05pm
Many, perhaps most, people have children because it's expected or because birth control fails and abortions are stigmatized or difficult to get. I suspect only a minority of parents consider producing offspring a vocation.

I don't think parents owe their children a legacy beyond the life, food and shelter, and whatever wisdom they have passed along. Even less so if said children don't appreciate the efforts already made on their behalf.

Most people I know--of a certain age--have received modest inheritances, usually including property.

catherine
1-12-11, 1:26pm
I truly believe that the goal of this game of life is to end up with ZERO money in the bank (and owing no money). Hubby helps my Mom with her investments and every time she feels guilty about spending some of her savings I tell her that it is her money to enjoy and spend.

When my grandparents died and, more recently my Dad, all I asked for was one special item to remember them by. I didn't want anything expensive, just something small. From my Grandmother's estate I wanted the old pair of prospecting pants she wore as a teenager when she went prospecting with her Dad. I got those pants and proudly display them in my livingroom. *S* From Dad's estate I got an old tin lithograph he made when he worked years before. It's in the same room as my Grandmother's pants. I cherish them more than any money I might have been given (and there was none *S*).

When Hubby and I downsized into semi-retirement, we had a "get your inheritance now" party. Our new home is very small so we had to get rid of all our "stuff". We threw a big party with our kids and gave each one a different coloured sticky note. We drew numbers and the kid with number one got to put a sticky note on something they wanted. We went down the line of kids over and over again until there wasn't anything left in our house that didn't have a sticky note on it. Then the kids had 2 weeks to take their stuff out. Everyone had a great time and we got rid of all our excess stuff that we couldn't take with us. It was fun and surprising to see what each person (5 in total) chose.

Love the idea of "get your inheritance now" party! I agree that we "owe" our children intangibles like respect, unconditional love, transmission of our values. Anything else is gravy--but sometimes it's arsenic. I feel badly when I see how people sometimes react with inheritances. And it's not greed--it's really more deep-seated than that. My DH has gone on and on about how his brother was named executor of his mother's estate! It was like a slap in the face because DH is older (and smarter when it comes to life skills). I know that my MIL felt that my BIL might not have enough say in his future, and he was her companion for his whole life, so she made him executor. But it's hard to explain that DH, he just sees it as "I wasn't loved as much." Argghh..

No wonder the story of Joseph in the Bible is so compelling... with four kids I always wonder, not IF there will be grievances, but will they be serious, damaging ones? I hope not.

CathyA
1-12-11, 2:56pm
That is a good idea Hattie! The older I get, the more I don't want all this stuff and I don't want to leave a house full of junk for the kids to have to clean out. So I was doing something similar to what you did........Have the kids over and go through the house and they take what they want.
I spent so much of my life gathering stuff in. Now I want to let it go! And some things I sort of like, but don't want to give to strangers. So its nice to be able to give alot of things to my young adult children, so they can enjoy them throughout their lives too.