Dealing with inheritance guilt

Dealing with the death of a loved one or even someone you had a fraught relationship with is an inevitable and challenging part of life. Coping with that grief can be overwhelming, especially when you need to address all the practical matters that come with their passing.

This often involves accepting an inheritance, which can trigger feelings of guilt (i.e. inheritance guilt) and resentment. When financial gain comes from death, it’s not always easy to feel hopeful or excited about all the opportunities it can afford. It’s one of those bittersweet scenarios where you’re awarded something of value but at the great cost of a life.

As a wealth manager, this is a process I am familiar with. Aside from processing estate plans and legacy wishes, I’m also there to witness the emotions felt by surviving friends and family members. Death still has its stigmas, and sadly, the end-of-life process is not always spoken about enough, especially when there’s money involved.

If you’re thinking about bequeathing your assets or are currently processing your own inheritance guilt, here are several insights that may help you gain clarity.

Grief and inheritance guilt

Learning to be comfortable with inherited wealth is a process of varying emotional stages. Everyone is different, but it’s important to understand that you are likely to move through feelings ranging from disbelief, anger, euphoria, unworthiness, guilt, anxiety and even fear.

From my experience, some people may tend to catastrophise those ‘what if’ scenarios – losing the money or making a bad decision regarding it. Others may even second guess whether living friends or family members will approve. Another common barrier is still thinking of inheritance as their loved one’s money instead of their own.

What’s important is allowing yourself time to feel and explore your emotions after receiving an inheritance. It’s also important to talk about it. I’m no therapist, but I know that creating a healthy acceptance of the situation is one of the only ways to find inner peace and help you move forward. There’s also no need to rush.

I tend to help clients process their inheritance guilt by focusing on the tangible and intangible opportunities an inheritance sum or property can provide. I further afford them space to grieve while I take care of all the heavy lifting that comes with administering the estate of their benefactor. If you’re currently on the receiving end of an estate, some questions that may prove helpful to ask yourself include:

• What fear tied to your inheritance do you need to overcome or let go of?

• If you could do anything with the money, without fear or guilt, what would you do?

• What would be a healthy perspective of this wealth for you to create or adopt?

• How has the inheritance made you realise about yourself and what is important to you?

Give while you live

Although a wonderful gesture to pass down generational wealth and assets in your estate after death, we all need to understand that those we leave behind will likely struggle with some degree of inheritance guilt.

To help mitigate this, I’m a firm believer in giving while you are still alive. Doing so can help remove that sense of inheritance guilt your dependents may feel, further allowing you to experience the joy of giving it. Be it to your spouse, kids, grandkids, a community project or a local charity close to your heart, distributing a living inheritance before you pass means you get to witness how others appreciate your generosity. There is an element of accountability. If you’d like absolute peace of mind that your dependents will use it wisely, best give it to them when you’re still here.

Here’s another point worth considering: allocating living inheritance further assists those who might need the funds now rather than later in life when they are more self-sufficient. This is especially true if you have young children or grandchildren you’d like to include in your will.
Releasing a part of property or assets before death is not easy, but there are experts who can guide you. I will often simulate a mock death with my clients, showing them exactly what can happen after they die. This is my way of stress testing your will and ensuring all the elements of proper estate planning have been considered. It can also spark several less-explored considerations regarding your own death.

Another advantage of bequeathing assets while you’re still alive is that you can ease some of the associated costs of winding up your estate. If you provide living inheritance while you’re alive, estate duty, executor fees, and other relevant taxes will be lower after you pass.
Just be aware that giving while you’re alive could trigger a donations tax. This is calculated at a flat rate of 20% for sums of R100 000 and below. A rate of 25% is issued on donations that exceed R30 million.

Moving forward

Ultimately, every adult needs an estate plan, but most importantly, to keep it updated because things change constantly, even during the best times. If you’ve recently received a lump inheritance, you’ll also likely need to update your own estate plan or reevaluate your portfolio.

Each year, billions of rands go unclaimed because family members were unaware of specific policies and investments of a deceased relative or because the will was invalid. Remember, without a will, the courts decide.
There’s no one-size-fits-all approach when it comes to estate planning – it really all depends on the individual and their personal situation. If you need help receiving generational wealth or leaving behind a legacy that endures, please get in touch with me.

I’m Giles Maynard. I provide individual investment and wealth management services for private clients and companies. I have been trusted by clients, large and small to manage, protect, and preserve their wealth. How can I help you with yours?