Some parts of financial planning are fun to talk about: retirement, travel, helping children and grandchildren, the lake house, selling the business and leaving a legacy.
Inheritances are not on that list.
The reason becomes obvious once you say it out loud. An inheritance means someone you loved is gone. The financial outcome and the emotional loss arrive together, and most people would greatly prefer not to think about either one ahead of time.
So nobody talks about it. Which can become a problem because an inheritance can change a family’s financial picture more than almost anything else.
At Baldwin Capital, we sit on both sides of this conversation. We meet with parents who have a plan for their children that the children know nothing about. That's only half a plan. We meet with adult children trying to honor wishes they only partly know. And we meet with heirs who are genuinely surprised by what shows up. Sometimes it is far more than they guessed. Sometimes it is far less than they were promised. Both surprises are hard, just in different ways.
We never build an inheritance into someone's financial plan. We don't know if it will arrive, when it will arrive, or how much will ultimately be there. Healthcare costs, long-term care, markets, taxes, remarriage, and family circumstances all have a way of changing the outcome. A plan that only works if someone dies and leaves you money isn't really a plan.
But not planning for something is different from pretending it never happens. It happens more than you would think. For some families, it may be a few thousand dollars; for others, it may be several hundred thousand dollars; and occasionally, it can be several million dollars or more. And there are questions underneath the number. Are there strings attached? What does the tax treatment look like?
When it happens, the plan changes fast. A retirement that was on track gets breathing room. A goal that was five years out is suddenly on the table now. Work, travel, giving, helping the kids: all of it gets a second look… or maybe you don’t see it as yours.
While the money moves quickly, the emotions do not. We sit with clients who feel grateful for the gift and guilty for benefiting from a loss, at the same time or at least at the same meeting. We have watched people freeze because they feel the pressure to make the right decision immediately, or to keep every dollar exactly where their spouse, parent, or other important figure left it.
None of that is unusual. It is the normal response to inheriting decade of work by someone you love.
Our job in those moments is mostly not financial management. It is laying out the options, slowing down the big decisions until the person is ready to make them, and often just listening. We remind clients to breathe. These decisions rarely need to happen today.
An inheritance is rarely just money. It is what someone you love spent a lifetime building, handed to you. Managing it well matters. Understanding what it represents matters more.
Some people see “the money” as money. It goes into the account, it does its job, and that is a perfectly reasonable choice. Others cannot think of it that way. It is Mom's money, or Dad's, and spending it on something ordinary feels wrong.
Nobody hopes to need this conversation. But when the time comes, having someone who understands both the financial decisions and the human side of them can make all the difference.
We Enable Dreams.
This is the first in a series on inheritance.
Disclosure: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.