Do clients feel guilty about inheritances?

Receiving a large, unexpected, sum of money has its advantages, but clients often have mixed feelings when that money comes in the form of an inheritance.

The report Guilty Money: The Guilt of Inherited Wealth by Amy Zehnder, managing director at Ascent Private Capital Management, indicates that when clients inherit money they go through a wide array of emotional states that parallel the stages of grief, such as anger, guilt and paralysis.

Read: Leaving money to an unborn heir

Advisors need to help clients through the emotions of inheriting money before discussing plans on how to use it. She suggests bringing up the following scenarios to determine where the guilt’s coming from.

Read: Help clients keep windfalls

Are you feeling guilty because…

• Someone passed away for you to get it
• You want to fit into society or with your friends
• You fear the potential of losing the money
• You feel a sense of entitlement and entitlement is perceived as a bad thing
• You fear you might lose control of something
• It doesn’t feel right
• You fear you might do something wrong with the money
• You fear you might do something with the money that the grantor wouldn’t have approved of
• You fear you might do something with the money that other living family members won’t approve of

Then, Zehnder says, tell clients to consider what they could do with the money if they didn’t feel guilty about it. “Look at wealth from the perspective of opportunities,” she says. “What opportunities has it provided that would not have been there otherwise?”

Read: Avoiding estate litigation

Hat tip to Sydney LeBlanc of the Financial Times; click here for her story.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.