Inheritance can increase a family's fortune by 40%, on average; however, this money is not guaranteed to the benefactor's relatives.
When NYC copper heiress Huguette M. Clark died in 2011 at 104 years of age, she left about $300 million behind. Her will, written in April 2005, left instructions as to how to distribute the largess. It would seem all was well.
But, there was a problem. Clark had an earlier will written in March 2005 just 6 weeks before her second will. In it, Clark left her money to relatives. However, the heiress had second thoughts about this generous gift to people she apparently rarely or never saw. In the later will, Clark cut out her blood family altogether. What is not only thought provoking, but even jolting is her reason. In a September 13, 2013, New York Times article, she was quoted as saying:
“I intentionally make no provision in this my Last Will Testament for any members of my family, whether on my paternal or maternal side, having had minimal contacts with them over the years. The persons and institution named herein as beneficiaries of my Estate are the true objects of my bounty.”
One way to interpret this is “out of sight, out of mind.” Also, it is possible that even when Clark’s relatives saw her, they may not have been as solicitous as she would have liked. Whatever the reason, Clark did not see her family as interactive with her; it may have been their mistake.
According to a study by Edward N. Wolff and Maury Gittleman published as a Bureau of Labor Statistics working paper, 30% of households are the recipients of an inheritance over a lifetime. For these families, this newfound money accounts to 40% of their wealth at the time of the recipient’s death. The rich do even better. According to the same study, the top 1% of households inherited, on average, $2.7 million. This “easy money” scenario is one a lot of folks would welcome.
Although no one has identified with certainty how often a projected or desired transfer of money does not happen as anticipated, we know that it does occur. And, it is sufficiently common so that legal articles are devoted to it. One such paper entitled, “The Riddle of Inheritance: Connecting Continuity and Property,” states that “disinheritance is often explained as a response to bad behavior.”
This thinking would be in line with Clark. She evidently deemed absent relatives an indication of their poor behavior toward her and decided to ditch them.
Now, of course, the relatives may have wished they had paid more attention to the heiress. They have to fight her will in court to get what they must think is theirs. This stressful situation is not only harmful to their emotional health, but also, perhaps, their physical.
It is equally or even more sad that Clark could not enjoy her relatives when she was alive. Apparently, she must have wished this as well judging from her earlier quote that included, “minimal contacts with them over the years,” as a reason for disinheriting them.
In a nutshell:
• About one-third of households are the recipients of an inheritance over a lifetime.
• When the benefactor in the household dies, the inherited money accounts for about 40% of that family’s wealth.
• However, disinheritance can erase this scenario. It is often explained as a response to bad behavior on the part of the potential recipient of the inheritance.
• Those who are motivated to lessen the chance of disinheritance might consider regular and successful interactions with their parents and other older relatives. This could enrich the lives of the parties on both sides: the children’s and the parents or the young and the old.