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How To Prepare The Way For Inheritance

Karen McAllister Images August 2022

Money Thought Leader: Karen McAllister

What can we do to prepare future generations to handle wealth through inheritance?

Big Inheritance:

Recently, a young woman, in her 30s, came to me looking for help. She wanted to prepare for some changes that were going to happen in her life. She was about to receive a big inheritance and she wanted to be prepared psychologically for that to happen. 

“I get stressed when I think of receiving a bigger inheritance”

My client said, “I know my patterns. I have been getting some pre-inheritance from my Dad over the years. When I have this money coming in from my Dad, I have to figure out what to do. And I end up feeling stuck from realizing my potential and my skills. My education and my background don’t show up in my income.”

“I get stressed when I think of receiving a bigger inheritance. And I get really anxious thinking about a bunch of problems I will cause for myself when it comes to that money. And I am not sure why I cannot put my finger on it.”

Emotional Tension:

Because her family has more than enough money, she recognized that she developed an innocent kind of child’s entitlement growing up. Every time a pre-inheritance amount of money arrived in her bank account, she named the emotional tension it brought up.

She would feel like she needed to act or do something in case she was going to be cut off from the inheritance. This resulted in her being frivolous with the pre-inheritance. She was buying things she didn’t need and spending lavishly. And then she would feel wrong about how she spent the money. Especially because of her privilege and the ever-real gap between the haves and have-nots.

Golden Handcuffs

Golden Handcuffs:

She felt imprisoned by the inheritance. A sense of being too taken care of by her family financially meant that she would leave her body and zone out for weeks after the money arrived.

And at the same time, she had a deep desire to be cut off from her family financially to free herself of the golden handcuffs. She would daydream of being disinherited and independent. “I was happier when I didn’t have any money”, she reminisced.

inheritance shame

I am writing this article today to address those of you born between 1944 and 1964. If you are part of that generation you may be thinking about how to pass your accumulated wealth to the next generation.

“After all, it is your money. You have earned it.”

I invite you to think deeply about how you can also prepare yourself psychologically to give away your wealth. Can it be done in a way that doesn’t cause stress and anxiety to the younger generation? How can you help them to be open and receive well this money you built up? 

Receiving An Inheritance:

After all, it is your money. You have earned it. They have not. When you earn your own money, there is confidence in yourself. And you cannot pass that confidence on. In my experience, receiving an inheritance that they have not earned tends to shut down the person’s life energy.

It’s an unintended consequence. The inheritor can become paralyzed and stuck in reaching their potential. However, if this inheritance is sensitively and thoughtfully transferred the outcome can be very different.

Forbes writes “Baby Boomers, are expected to transfer $30 trillion in wealth to younger generations over the next many years. This jaw-dropping amount has led many journalists and financial experts to refer to the gradual event as the “great wealth transfer. At no prior time in the history of America has such a vast amount of wealth moved through the hands of generations.”

Spending And Saving Habits:

Are we preparing the way for inheriting generations and beneficiaries to handle this large up-leveling of wealth?

“Money is a nexus that is the doorway to greater integration and healing of our family dynamics.”

Well no, not really. According to a 2018 study by The Teachers Insurance and Annuity Association of America (TIAA) Institute, only 11% of Millennials showed a “relatively high” level of financial literacy, with another 28% of the group displaying a “very low” literacy rate in finances. Gen-Xers are suffering also, showing struggles with spending and saving habits.

Financial Literacy:

Personally, I think it is not only about encouraging the younger generations to improve their financial literacy but also about learning how you and they are built around money emotionally and psychologically. 

I often see money as a mirror. From my own experience in this work, I have seen that our relationship with money in our families tends to display the hidden hurts and unresolved issues passed down over generations. Money is a nexus that is the doorway to greater integration and healing of our family dynamics.

Journey Of Wealth Transfer Through Inheritance:

How can you and your adult children navigate this journey of wealth transfer with ease and awareness? How can you help them to avoid creating obstacles or roadblocks? And how can you proactively help to ease through this transition rather than be bumpy at each stage?

It’s an interesting time in our history, with no standard operating procedure to guide us. But it presents us with a wonderful opportunity to rewrite our own money narratives and create a more positive impact for our heirs.

Inspiring Role Model:

I invite you to do your own work around money and be an inspiring role model for future generations. And I wish you lots of love, support and happiness as you navigate this journey. 

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About the Author:

Karen has worked with over 100 clients, helping them untangle their money issues and to become more effective in their work because of it. To do this, Karen has studied financial issues extensively from both the practical, behavioral, and the emotional perspectives.

She has been certified by Deborah Price of the Money Coaching Institute as a Certified Money Coach, a Couples Money Coach, and a Business Archetype Coach. She has studied with Lynne Twist from the Soul of Money Institute for two years on Mastering your Money and Transforming your Life, including studies in Lynne’s Fundraising from the Heart program. Checkout Karen’s site TheMindfulMoneyCoach. Or, you can email Karen directly at the[email protected]. You are more than welcome to join the Money and Spirituality online course, starting Feb 19th at Noon EST for four Saturdays.