Dan Hall & Associates Solid Plans for Peace of Mind

Am I Prepared to Receive an Inheritance (Someday)?

By Genevieve Hoffman 7/19/10

I am currently a soon-to-be junior in college.  I am interested in law and have a summer internship with Mr. Hall.  One of my assignments was to write this article, about how my parents have prepared me to receive and handle my inheritance; in other words, how they have taught me to manage money, so that when I finally do inherit, I won’t make a total botch of it.

I have to say, when I first received this assignment, I stared at the (blank) computer screen for roughly twenty minutes thinking, “Ummm…”  I couldn’t remember ever having any particular conversation with either of my parents along the lines of, “So, when you grow up, this is how you manage money…”  I even started to worry, fearing that I had missed out on some crucial piece of information.

But the more I thought, the more I realized that although the money management conversation never came up per se, my parents had actually taught me quite a bit.  I just hadn’t realized it until now.

I was probably in a fairly unique position to learn about finances and money management from a young age, being the child of two public accountants and being by nature a curious sort of person.  (And then I went on to study economics in college, which has just further reinforced what my parents taught me.  See again: unique position.)

Some of what I learned from my parents about finances and money management I simply absorbed through osmosis, listening to my parents talk about their work or the economy.  (I’ve witnessed two big recessions in my lifetime, the causes and consequences of which were—and are—discussed frequently in my house.)  Over the years I soaked up financial fundamentals like: money in must always be greater than money out; risk may be acceptable, but only as long as it is carefully considered and you are prepared to deal with the consequences of a loss; and borrowing on credit to buy something you can’t afford is a really bad idea.

I was also big on asking questions about things they said that I didn’t understand.  Many a car ride with my dad opened with questions like, “So…what’s a stock?” Or, “Hey, what is it exactly that you do again?”  That last got asked many times over the years.  Eventually I even understood the explanation.

For the most part though, my parents taught by example, and the lessons sunk in even if at the time I was too young to really understand their significance.  Prudence, thoughtfulness, and lots of research were always the order of the day whenever they considered making a large financial transaction.  They set aside savings to fund my brother’s and my college educations, and to fund their own retirement; as a child I thought this sounded like a fine idea and decided I would eventually do so too.  By the time I really understood the implications of these concepts, they were already thoroughly ingrained.

My father always kept a rigorous eye on our finances, combing meticulously through my mother’s (and later my) credit and debit card receipts every month (literally checking off each one against the statement as he went along), and balancing our checkbooks.  (And heaven help the person who didn’t save her receipts, or who entered a transaction inaccurately in her checkbook.)  He still does all of this.  Every weekend of my life (and I am not exaggerating) has found him at some point in his study, paying bills and otherwise keeping track of financial transactions.

My father is also an unfailingly generous man.  Giving, whether to his children or to others, has always been something he strives to do, and strives to teach us to do.

My mother taught me more about family, or rather about family as it relates to wealth.  She taught me that wealth isn’t about spending money or having nice things; its purpose is to improve the lives of yourself and your children.  She also explained that, as the eldest child, it will be my responsibility to guide and protect my younger brother in the management and use of his inheritance.

Of course, my mother also taught me such all-purpose, useful things like the concept of shopping around, and the idea that you never pay full price for anything at Macy’s, because it will inevitably go on sale two weeks later.  But that’s mostly just for fun.

Lastly, she taught me to manage my own expectations about my inheritance.  The time when my brother and I will actually inherit is (hopefully) a long way off, during which time, much could change.  In the meantime, it is important for me to focus on securing my own financial future, rather than relying on the hazy promise of “someday.”

Eventually, most of us will also receive some dollars as gifts from parents or grandparents and also inherit a portion of our parent’s estates when they pass away.  Our parents hope we’ll use the assets they leave us wisely and that the inheritance they leave will help us be better adults and not “hurt” us.  They’ve worked hard to accumulate the assets they leave and want us to take responsibility for them, and treat them as a stewardship.

So, am I prepared to receive my inheritance?  Probably, if I had to.  But I’d prefer not to have to for a very long time.  There is still too much I must learn.  The most important issue is that I haven’t actually had that much experience truly managing money, and certainly never large amounts of money.  I am still a full-time student; my parents still pay for most of my expenses, and still manage all of my investments.  At some point I must learn to do this on my own, to be prepared in more than just theory to handle an inheritance.

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