Tuesday, December 14, 2010

On Yerusha

The idea of inheriting wealth from parents is not a new one, nor is it limited in any way to the frum community. At one time it was land ownership that was what was being looked at by children. Owning your own piece of property, particularly if that property were also income producing, gave you stability and status. Land remained in the hands of a single family down through the generations.

That is not now the case in the same way. Yes, people still own land, but for most people what is being talked about is a house and the property it sits on. And that house is seen as a source of cash rather than something to be passed on from generation to generation. When parents die their homes are mostly sold to get the money out.

Sometimes inheriting wealth can mean getting money, not just land. Parents with savings obviously can't take those savings with them when they die. In addition to land and money there are items of worth that may be left when parents die, items like jewelry and silver and other valuable items.

An awful lot of people aren't just anticipating that they will get a yerusha from their parents when those parents die--they are counting on it. Frankly I find that more than a little macabre.

Yes, as a parent I want to leave something to my children. But my priorities may be a bit different than others. The first and most important thing I want to leave them with is a passel of great memories, memories of time spent together as a family. I want to leave them with a clear idea of where they came from and how they got here.

Next on my list are the sentimental items that spell family time to me and to them. Yes, I want to leave them my mother's first lachter, purchased in Europe when she first got married. And I want to leave them the various other "precious" items that are tied in to our holiday and Shabbos and family observances. And yes, there is jewelry that I want to pass on. I wear my grandmother's engagement ring on my right hand, a grandmother I never was privileged to meet. It is my hope that one of my kids will, after I'm gone, also wear that ring as a connection to the past and in honor of that grandmother of long ago.

Leave them a house? Well, maybe. Maybe, unless I sell it and move elsewhere. Maybe, unless I'm no longer able to live in it and need to sell it to meet my own needs at some point in the future. And money? Hmmm, maybe. It certainly is a nice dream to think that I could leave my kids much better off by leaving them a pile of money. It's a nice dream to think that I could be guaranteeing them a secure retirement through my efforts. But it's a dream, not necessarily a reality, because here is what I know in the here and now: I do not, while living, want to become a financial burden on my children. Given spending my own money to provide for myself while I'm living and leaving over money when I'm not, spending while living wins.

And then there is this. What constitutes living? There is an attitude that is far too prevalent that once you've passed your 60s you've done and seen and bought all that you really need to sustain you or make you happy. 70-year-olds are supposed to live a sedate lifestyle. Certainly 80-year-olds should be doing so. What is there left for people in their 70s and 80s to "need" to spend on, other than a bit of food, a few pieces of clothing and plenty of gifts to the kids and grand kids and great grand kids?

The widowed mother of a friend here in the neighborhood answered that question in her own way. All the years of raising her children she was frugal while still providing everything she could for her family. Yes, she and her husband indulged occasionally in something just for themselves, but mostly after the kids were married and not too often. A few years ago she talked to her accountant, they went over what she had available in funds, and she went on a buying spree. She furnished her home with all the things she didn't "fargin" herself when she was younger. She bought an incredibly beautiful (and yes, expensive) Persian carpet for her living room, and every morning walked barefoot over that carpet for the lovely feeling it gave her. She bought pictures for her walls based on how beautiful she thought they were, not on how cheaply she could get them for. She treated herself to a magnificent set of expensive china dishes, and how thrilled she was when family came over and she could serve them on those pieces of fine china. And yes, she exchanged her 40-year-old dining room set that she had hated from day one for one she loved. Her feet had always given her trouble and she indulged herself in pairs of handmade, custom made shoes. She liked to do needlework, and she indulged herself in buying pure cashmere to knit with. Yes, in about two years she seriously spent down a lot of money. And she only had those two years to enjoy the rewards of her spending. So? Who was better entitled to enjoy that money than she was?

One of her kids was not awfully happy with the mother's indulgences (and yes, a few others in the neighborhood thought she was "going batty"). She thought of those purchases as being squandered money and was seriously doubting that her mother had all her mental faculties working. Her other children applauded their mom's actions. Who better deserved to reap the fruit of decades of labor than their mother? If this made her happy then who were they to be nay sayers? And yes, money--expectations of inheriting money--caused a sibling divide.

I like to think of that old saying as applying here: "It ain't over 'til it's over." This woman clearly understood that.

For children to not only assume that a windfall yerusha is coming down the road but to expect that it will be there is not being realistic, and certainly not altruistic. Assuming that parental largess will be forthcoming, thereby obviating the need for these children to prepare themselves, by themselves, for their own expenses, is a recipe for disaster.

And yes, I'm being cynical enough today to wonder just how this idea of "mandatory" yerusha effects decisions that some children will need to make about medical care for an elderly, sick parent.

NOTE: I am not forgetting that parents may have special needs children who, even as adults, may require special facilities and services that the children may not be able to provide for themselves because their situation prevents them from working and supporting themselves. Obviously such a situation requires long-term planning on the part of parents and yes, on the part of siblings as well. Such a situation, however, is outside of the norm and does not usually enter into the discussion of parental yerusha.


Anonymous said...

Fact of life--people are living longer today. More years=more money needed not less. For most people yerusha is going to be a word in the dictionary not money in the bank. Just another economic fact the younger generations are going to have to face.

Anonymous said...

Not only should people not count on an inheritance, they should be saving some money to help take care of their parents if necessary.

JS said...

You could turn this post into a whole series of posts given the numerous interesting topics discussed.

Money in general causes lots of fighting and jealousy and ill will - how much more so, when it's someone else's money you stand in line to inherit!

It seems almost unavoidable to cause fights. The grandmother's ring? What if there are two daughters? Who gets it? The beautiful kiddush cup? Which son does it go to? Do you divide assets evenly amongst children? What if one is far better off than the rest? What if one child takes care of the elderly parents exclusively? There are so many points of contention.

The real issue is that so much money is flowing down to the younger generations to pay for necessities and luxuries. Categorize it however you want, but parents and grandparents routinely help with down payments for houses, yeshiva tuition, pesach hotels, trips to visit, baby furniture, simchas, support for learning, etc. That doesn't leave much money for the elderly and soon to be elderly. With people living longer and being less ready for retirement (this is true in the general populace, how much more so in frum society where some view retirement savings as treif even if they have left over to save), it's going to be a big problem.

Add on that many of these younger generations are expecting some kind of yerusha to get them out of some financial pickle. They see all the financial support they get now and they think they're gonna hit the lottery when bubbe dies. Aside from being macabre and twisted, I think it will be less and less true moving forward due to depleting the wealth of the elderly on the young.

It's an interesting point though - some elderly people want to give their money over to their children and grandchildren while alive to see them use it and enjoy it. In that sense, this isn't bad, but if these people have nothing left to care for themselves, it's a real problem.

Miami Al said...

A friend is a financial advisor, he said when working with clients, he describes retirement as three phases:

1. The go-go years
2. The slow-go years
3. The no-go years

In the Go-Go years, the 65 year olds in good health are enjoying their free time to travel, do the things they couldn't before, etc., enjoying their golden years.

As age sets in, there is less traveling because rigorous travel sets in.

As old age sets in, the no-go years watch wealth destroyed as declining health and mounting health care costs can wipe out the most frugal investors.

His thoughts on that, divide your wealth to cover those years. Let yourself take some money to spend in early retirement, while you can enjoy it. Get a long-term care policy so the no-go years don't wipe you out, and use a whole life policy to cover cash needs (if necessary) along the way while also leaving assets to heirs. There are far more details than that, but the point is, you scrimped and saved, you should enjoy. The window when you have the time to travel, resources to travel or whatever it is you want to do, and physical stamina to travel is pretty small, you should take advantage of it.

Whether that is a Persian rug to walk on or a trip to the mountains of Tibet, enjoy it.

And if you do inherit money, it's tempting to bail yourself out of financial pickles and treat yourself... however, if you weren't putting money away before the inheritance, you are unlikely to do so now, so just fixing the balance sheet as a one time thing is NOT helpful.

And the most important rule of family wealth, that people don't know if they don't have any: NEVER, NEVER, EVER touch the principal.

Eva said...

Even where there will be some money that older parents will still have when they die, kids need to realize that the parents may have committed some of that money away from the kids. A lot of people leave bequests in their wills to charities, either as a direct donation or to establish a memorial fund in their name. They may also leave bequests to other family members besides the kids.

My grandparents arranged things this way, but our parents knew about it before hand and weren't counting on all the money coming to them.

Anonymous said...

The best thing parents can do for their children is to let them know up front that there will be no inheretance, apart from some family heirlooms/jewelry/ritual items. Then, if there is something left, there can be a pleasant surprise and in the interim the children aren't counting their chickens before they hatch. I think that in some families the parents inadvertently lead their children to believe there is more money than there really is, such as by showering gifts on the grandchildren and helping with expenses.

The Rebbetzin's Husband said...

It's not for nothing that the gemara (Eruvin 54a) advises parents to avoid leaving their children large inheritances. The child described above illustrates one of the various pitfalls involved in large bequests.

Chana said...

Expecting a yerushah from parents can cause warfare between siblings when parents die.

My aunt and uncle suffered all kinds of illnesses for the last 15-20 years they lived. While all the kids called often enough to speak to their parents only one daughter became the hard work caretaker. She was the one that was constantly with her parents and doing for them. Towards the end her mom moved into her house. She couldn't work the last years because she was with her parents all the time.

When her parents died they left some items to the other siblings and also a bit of money but the bulk of whatever was left, and that was mostly the money gotten from their house when it was sold, went to this daughter. The war that broke out was really ugly. At least her parents took care of things with a lawyer. One brother wanted to take this sister to a din Torah for stealing what was rightfully his as he put it.

Relations are still so bad after 6 years that no one in the family can invite all the siblings to one simcha because they won't sit down in the same place with each other.

Orthonomics said...

Count me in as one person who hopes her parents will enjoy their money. They helped give me a good start in life, and I would like to see them reap the rewards of their own discipline.