Drs. Steven & Deborah Hendlin

Description

Boomers, don't count on a gift from Mom and Dad. Your parents may opt for performance-based inheritance. My grandmother, Mary Jane Billy, was hardly what you would call ahead of her time. In 1979 she bought a brand-new powder-blue Buick LeSabre with vinyl seats and whitewall tires and drove it, quite proudly, into the 1990s. She didn't trust modern contraptions like washing machines either, so she'd roll up her sleeves and dig right in as the machine agitated, scrubbing her clothes by hand to the rhythm of the Kenmore motor. But several years ago, before Alzheimer's silenced her memories and cancer stole her breath, she did something that put her among a growing cadre of aging parents who are redefining how they view, value, and distribute their inheritances. Mary Jane, headstrong as she was, decided not to disperse her assets equally among her four children. She chose to leave more to one child in particular—the one who took her to the bank every Friday, balanced her checkbook, and escorted her to doctor's appointments—my mother. My grandmother didn't explain why she had favored one child in her will. The very idea of it flies in the face of a basic tenet of parenting, namely that parents love and treat their children equally. Or so we thought. Recently the Allianz American Legacies Study, a groundbreaking look at attitudes toward inheritance, showed that 54% of elders believe in some form of "performance-based inheritance." In other words, they think a child deserves more if, for instance, he or she provides care for the parent. And one-third think children deserve less if they cause conflict or disrespect the family. In fact, 45% of high-net-worth and 23% of lower-net-worth elders do not feel that all children have the right to share equally in their inheritance, according to the survey. "Inheritance used to be a formula: The oldest son got the farm, and the oldest daughter got a dowry," says Ken Dychtwald, a gerontologist and CEO of Age Wave, a consulting firm in San Francisco that designed the Allianz study. "In the 20th century we moved to a more equal distribution as the accepted norm," he says. "Now there is no clear prescription." Estate planners say clauses stipulating that a child be a productive member of society are popping up more and more. Don Weigandt, a wealth advisor at J.P. Morgan Private Bank, calls them "incentive" provisions. Another increasingly popular clause is one that leaves a child an annual "match" equal to what he or she earns in employment—but not a penny more. "It's the make-a-dollar-get-a-dollar model," says Weigandt. "I don't believe in equality," says Jayne Buchanan, 72, a retired nurse and mother of two daughters, who lives in Canandaigua, N.Y. "I treat my children as individuals, not equals." Although she plans to split her assets between the two, she will distribute some prized personal items as she sees fit, not based on their actual monetary value. Parents who earned rather than inherited their wealth are more likely to adopt an I-earned-it-now-you-earn-it-too approach that bucks the sense of entitlement many children have, says Scott Farber, a wealth-management advisor in Natick, Mass.

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