Many adult children in Florida view their future inheritance as a safety net—a lump sum of money that promises financial security. However, experts caution against this mindset. “Relying on an inheritance to secure your financial future is like building a house on quicksand,” warns Kevin Shahnazari, founder and CEO of FinlyWealth. “The foundation is unstable and can vanish at any moment, leaving you vulnerable and unprepared.”
Shahnazari recounts stories from clients who postponed crucial financial planning in anticipation of a significant inheritance, only to find themselves in dire circumstances when it failed to materialize or was far less than expected. One poignant example involved a client who delayed retirement savings for years, convinced she would receive a seven-figure inheritance from her parents. When her parents' business unexpectedly failed, not only did that inheritance evaporate, but she also found herself financially supporting her parents—a double blow to her retirement plans.
This scenario highlights the unpredictability of inherited wealth and the critical importance of building your own financial foundation.
Emily Hicks, estate planning attorney and owner of Emily Hicks Law, echoes this sentiment, emphasizing the risks of depending on a promised inheritance. “I’ve seen many cases where expected inheritances were drastically reduced by unforeseen medical expenses, estate tax liabilities, or even family disputes,” she says. “In my experience with estate planning in Florida, I've seen parents selling assets for long-term care, leaving heirs with much less than they anticipated.”
Here are some compelling reasons not to rely on a promised inheritance:
Counting on an inheritance can lead to family discord. Siblings can turn against each other and children grow resentful of parents when inheritances don’t meet expectations or are distributed unevenly. The emotional costs of these conflicts can outweigh any potential financial benefits.
Promised inheritances can also foster complacency in personal financial planning. Emily shares, “In my practice, I’ve encountered clients who waited to save, thinking they would inherit a large sum.” This mindset often hinders their financial growth, leaving them unprepared when the inheritance falls short.
Individuals who engage actively in financial planning—utilizing tax strategies and estate planning—are generally better equipped to handle future uncertainties. Clients who initially relied on an inheritance but ultimately shifted focus to maximizing retirement savings, found greater financial independence in the long run.
Potential disputes among heirs can be common. Without a clear estate plan, disagreements can lead to legal battles, which can consume time and resources better spent on building your own financial security. Emphasizing self-reliance, proactive financial planning is essential for a stable future.
Another critical factor to consider is the evolving landscape of wealth transfer. As lifespans increase and healthcare costs rise, many individuals find themselves outliving their assets or draining them on long-term care. “Tax laws and estate planning strategies are constantly changing, especially as we approach 2025” Emily notes. “What seems like a guaranteed inheritance today could be significantly diminished by future legislative changes.” She advises clients to treat potential inheritances as windfalls rather than the cornerstones of their financial planning.
In summary, experts advocate for building your own wealth through disciplined saving, smart investing, and thoughtful financial planning. Consider viewing your inheritance as a potential bonus, not a guaranteed safety net.
In the dynamic environment of Florida, where economic conditions and family dynamics can shift rapidly, taking charge of your financial future is more crucial than ever.
If you're ready to make a plan, give us a call today!
