Shrinking Inheritances

Many older investors have been scared out of the stock market, reducing their opportunity for asset growth. Lower account balances combined with increasing health care costs are forcing them to shrink the amount of money they plan to leave for their children and save more for their own expenses. However, children’s expectations of an inheritance are still high, and advisors often find themselves caught in the middle.

Debra Morrison, a financial advisor in New Jersey, tells her clients who feel guilty about holding on to their savings to make her the bad guy, even if that means she’ll lose the children as future clients. Lauren Lindsay, a financial advisor in Louisiana, tells her clients to not expect an inheritance from their parents. She explains that getting nothing is actually a good thing; they should be hoping to not have to support their parents rather than hoping for an inheritance.

See Advisors Caution Clients About Inheritance, Financial Advisor, Oct. 11, 2010.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.