The unhelpful nature of Inheritance....
Discussion
Not entirely sure what I'm hoping to achieve with this thread, maybe just to see if others have the same thought process as me.
Recently, not sure how, a conversation with the father in-law turned to the subject of inheritance. He announced that he's currently got £250k 'locked away' for each of his 2 children, to pass on as inheritance. With various investments and such he estimates this to reach £500k each upon his death. (I live in the midlands, not the south, £250k is a substantial amount of money here). Also, his mother isn't doing too well, and when she passes he's likely to get £200k from her estate. This got me thinking how inheritance seems to arrive as the least helpful point in a persons life. He's going to receive £200k, when he's already got £500k in the bank, has recently retired, has a hefty personal pension, and has just bought a retirement house out in the countryside.
So this means that if he lives another 30 yrs, myself and the wife will be in our early 60's, and we'll receive around £500k in inheritance, but by that point we'll be in a similar position to him, and the money won't be overly useful. At 60 I'll have paid off the mortgage, raised 2 kids and put them through uni, and will hopefully have a decent pot of my own, I will have gotten through all the financially straining times of my life, only to receive money at the other end, I wouldn't class it as pointless, just backwards.
At present his son is stuck in the renting loop, unable to buy a house, and his daughter is a full time mother to 2 children, with me working 3 shifts and overtime to pay for it all and a decent sized mortgage. Arguably £250k now would be infinitely more useful to them both than £500k in 30yrs time.
For the record I've told him to just spend it during his retirement, he's earned it, go spend it, but I think he enjoys the thought of looking after his children later on in life.
I don't know what I'm getting here, just musings I guess, but bottom line, inheritance feels very backwards.
Recently, not sure how, a conversation with the father in-law turned to the subject of inheritance. He announced that he's currently got £250k 'locked away' for each of his 2 children, to pass on as inheritance. With various investments and such he estimates this to reach £500k each upon his death. (I live in the midlands, not the south, £250k is a substantial amount of money here). Also, his mother isn't doing too well, and when she passes he's likely to get £200k from her estate. This got me thinking how inheritance seems to arrive as the least helpful point in a persons life. He's going to receive £200k, when he's already got £500k in the bank, has recently retired, has a hefty personal pension, and has just bought a retirement house out in the countryside.
So this means that if he lives another 30 yrs, myself and the wife will be in our early 60's, and we'll receive around £500k in inheritance, but by that point we'll be in a similar position to him, and the money won't be overly useful. At 60 I'll have paid off the mortgage, raised 2 kids and put them through uni, and will hopefully have a decent pot of my own, I will have gotten through all the financially straining times of my life, only to receive money at the other end, I wouldn't class it as pointless, just backwards.
At present his son is stuck in the renting loop, unable to buy a house, and his daughter is a full time mother to 2 children, with me working 3 shifts and overtime to pay for it all and a decent sized mortgage. Arguably £250k now would be infinitely more useful to them both than £500k in 30yrs time.
For the record I've told him to just spend it during his retirement, he's earned it, go spend it, but I think he enjoys the thought of looking after his children later on in life.
I don't know what I'm getting here, just musings I guess, but bottom line, inheritance feels very backwards.
It's a difficult one for me because A) he's not my father, & B) it's not my money, but I'm trying to find a nice way of saying "just give us some money Vaughn". I have no right to say that, but money for his children now would certainly be extremely helpful, as oppose to hoarding it all.
Plus, governments move the inheritance goal posts all the time, who knows what the rules will be in 20-30yrs time. I would like to think he'll look at the situation and realise that the imminent £200k would be best going straight to his children.
My grandparents on the other hand are dishing everything out to their grandchildren in their will. They've looked at the situation, seen their children are well off and don't need the money, whereas their grandchildren are struggling by comparison, so they're bypassing their children.
Plus, governments move the inheritance goal posts all the time, who knows what the rules will be in 20-30yrs time. I would like to think he'll look at the situation and realise that the imminent £200k would be best going straight to his children.
My grandparents on the other hand are dishing everything out to their grandchildren in their will. They've looked at the situation, seen their children are well off and don't need the money, whereas their grandchildren are struggling by comparison, so they're bypassing their children.
Phil. said:
If the father-in-law hangs on to the cash until he dies it will most probably be taxed at 40% before you receive any, meaning you get £300k rather than £500k, thus virtually eliminating the planned gains on the current amount (£250k) over the next 30 years.
Whilst I agree with this the issue is finding the correct way of suggesting this without coming across as money grabbing.Gassing Station | Finance | Top of Page | What's New | My Stuff