Time has no mercy.
But sometimes age brings some unexpected wisdom. Even if it is later than it should have been. For a few years now I have been trying to get my wife and her sister to talk to their parents about providing power of attorney rights for them, but they "haven't been ready" to have the discussion. However today, their mother called and said that they want to have a discussion about it.
Seismic move.
The two children don't really know how much their parents have stashed away, but even though they were working class most of their lives, they are also from a generation that saved, and didn't take on exorbitant debt levels. They have largely lived modestly their entire lives, splurging occasionally on a car, or perhaps a holiday back in the days when they were comfortable to travel. However, they have also not been the most savvy of investors from what I understand, so they haven't been investing heavily into generative investment options either.
This shift must be scary for the parents though, as they have spent their whole lives controlling and being careful with their money, only to get to the point that they have to give up control. This is not only a loss of freedom, but also a loss of something that they have spent the last sixty years of their lives being concerned with. Now that they are reaching close to eighty though, it has to be done.
Getting old sucks.
But they are also old school, where if something happens to the father, the mother won't be able to pay bills or probably even go to the shop. And if something happens to the mother, the father won't be able to prepare a meal, other than a barbecue. I suspect that once one goes, the other won't be far behind.
They have been together since their early teens.
For my wife and her sister however, there are now a lot of things that they are going to have to organize and consider, because whatever they might get from their parents, is going to be subject to some pretty significant taxing and there are many extra costs. The inheritance tax in Finland is high and complicated, and it also seems to depend on what form the value comes in as there are different rates depending on whether it is cash, a residence, an investment property or investments like stocks. This means that they have to also consider what to do before their parents pass away.
Neither of them are the investor type.
And, they don't really have a good picture of the landscape of their parent's value as it is, which means they are going to have to sit down with them and work out what is where and why. This is planned for tomorrow apparently, and I suspect that once the discussion starts, the father is going to start getting that feeling of loss and become quite defensive.
Have fun girls.
Getting old sucks at the best of times, but it sucks even more when having to watch all those decades of hard work of a lifetime, get chopped up and turned into assets and resources. Of course, that is what they are, but for the person who earned them through the blood, sweat and tears of labor and sacrifice, there is also the emotional attachment to the idea of it, not just the opportunity of it. It is because of this that people who earn the money, tend to be more protective of it and more sensible in their spending of it, than those who get the money cheaply or for free.
While I didn't get an inheritance of any kind, I think that if my wife does get something, she would be pretty sensible with it and perhaps "too sensible" even. I suspect that if it was cash, she would want to put it onto the house mortgage rather than invest it, which will of course be her decision at that time. However, I suspect that this is still some years away and if things go well, our mortgage won't be that great by that point anyway, so perhaps she would be more open to investing some of it instead.
Whatever the kids decide to do with it, it is up to them, but for the sake of my future self, I hope they at least do something useful with it rather than waste it. Inheritance might feel like it is free, but it is not when you consider what parents had to go through in order to build that amount, whatever that amount might be. I hope that when the time comes for Smallsteps to have to go through this, I would have already sorted out all the details so that all she will have to do, is benefit from the investments themselves and perhaps be able to offer her kids some additional opportunities.
At least, I hope there is more for her than my parents left me.
Taraz
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