Page 3 - Jan 2020 Newsletter

SPEND YOUR KIDS
INHERITANCE Continued..

2. There’s a 50 per cent chance your kids will blow it. Research in the United States

by J L Zagorsky has shown that half of all inheritances are either spent or ‘lost’ by various
methods. The survey covered people in their 20s, 30s, and 40s, and suggested roughly

half of all money inherited is saved and the other half spent or lost investing.

3. Your children won't remember cash. If your goal is to provide an inheritance to enrich

your children’s lives, then cash might not be the best way to do it. Think about the good
times in your own life, and you’ll find that most of our positive memories are based on

experiences, not money. Consider spending their inheritance with them, rather than just
gifting it after you pass away. This is a great way to make memories your children will
cherish.

4. Shouldn’t they work for it? One of the most common wishes among parents

worldwide is a desire to see their children make it on their own. However, a US survey in
1993 showed found that a signicant number of people completely dropped out of the

workforce after receiving a large inheritance. Most financially successful people are first-
generation wealth builders, meaning they didn’t inherit their money but accumulated it from
saving, investing, or building a business. The values of hard work, dedication, and frugality

are almost universal among financially successful people. So, leaving a large inheritance
to your children may be more harmful than helpful. The less we work for something, the

less we seem to value it.

5. Legal costs, delays, and challenges to your will. Winding up a deceased estate can

be costly, and even firms who provide wills for ‘free’ will be taking a cut from the estate.
Costs can be substantial and cut into any sum you intend to leave behind. Even if you

have an up-to-date will, there are no challenges, and the whole process goes smoothly
and simply, typically beneficiaries will have to wait six weeks for probate to be granted,
then another six months before the money is distributed. However, when grief and money

are combined, the family dynamic can turn bitter. There can quickly be complications and
long delays when the estate is wound up and lawyers must work with people who can’t

agree or don’t talk to each other. Even worse, challenges to wills are becoming
increasingly common. Even an unsuccessful challenge can mean higher costs, delays,
and ill-feeling.

&

P A P A K U R A
Life Property

is happily brought to you by
Chris Grantham 0274 960 959 c.grantham@barfoot.co.nz

Karen McGehan 027 296 1449 k.mcgehan@barfoot.co.nz