After a recent speaking engagement where I had been talking about how to make an inheritance mean something to the inheritors, a man
related a story to me:
Many years ago, he had been a new car salesman. A man, wife and children came into his dealership and said they HAD to purchase one of the most expensive cars on my lot, since “we just inherited a lot of money.” We completed the transaction, and they drove off in their new car.
Several months later, they came back and said they HAD to sell that same car back to me. I pointed out that I could only offer them considerably less than they had paid for it, since it was now a used car (and in bad condition). They said they understood, and we completed that transaction. As they were leaving I said, “Do you mind if I ask why you purchased such an expensive car and then came back so soon to sell it back to me at such a loss?” The husband explained that after they had spent their entire inheritance, they needed to sell the car so that they could “get back on welfare.”
What a shame! That same inheritance could have been used for so many positive purposes – to purchase a new, affordable, home, start a small business, get an education to improve the quality of life, etc. Why does this happen so often?
My conclusion is that the heirs so often squander their inheritance because they were unprepared to receive it. If we spend more time teaching our children and grandchildren about what it takes to accumulate an estate –hard work, determination, focus—perhaps what they receive from us will actually mean something. Demonstrating NOW the true value of wealth, being able to help others less fortunate, can also give meaning and significance to the inheritance our loved ones receive.
Is it time to revisit your estate plan?