What it's like to be an inheritor
In the latest installment of our anonymous interview series, we talk with inheritors, trust fund recipients, and the solemnly rich.
"Jeremy" is a publisher and event promoter from Manhattan who received a settlement and inheritance at 26.
"Cecilia" is a graduate student from Queens who was born into a trust fund.
"Ryan" is a musician and bartender from Brooklyn who inherited a large sum at 24.
The ins and outs of inheritance are an emotionally wrought and economically ambiguous phenomenon. From morally disagreeing with your benefactor to barely knowing them, from inheriting enough money that you can retire to making just enough to buy a nice suit for a funeral, the lives of inheritors are just as varied as anyone else's. Yet inheritors and trust fund recipients are, at times, treated like the black sheep of the working world and are seen as having a free ride when, in actuality, the cost is someone's life. In the latest installment of Hopes&Fears anonymous interview series, we talk with three recipients to look into the different shades inheriting.
JEREMY: Mine came from my father, with the majority of what was left going to my mom. When I was poor, both my parents worked and my father started working 20 hours of overtime a week. Growing up we were pretty much straight middle-middle class, which I feel I'm probably going to be one of the last people in this country's history to grow up in that class.
We never had to worry about money but we also couldn't forget about it and there were tons of times where my parents were not hesitant to straight up tell me that we couldn't afford things. They weren't the type of people who lived beyond their means and they were also very blunt about money. There would be times where I'd ask if I could go with my friends on some vacation or do something and my parents' answer was "no, we don't have the money for you to do that."
Not really having any sort of education or skillset, I would normally have one main part-time job that ensured me a few hundred dollars of income a week but couldn't pay for everything and I would make up for it by doing odd jobs or having shifts at anywhere between two to six different bars or venues. I just had a calendar and made sure that I worked six to seven days a week even if it was just a few hours moving boxes for this guy who sold juice close to New Jersey for like three hours from 6:00 to 9:00 every Wednesday. I knew that every day I needed to make some money and I just lived that life for years, constantly looking at my calendar and keeping my ear to the ground of where there were places I could get hired for a few hours at a time.
I worried about it in the sense that the months where I couldn't make enough money I'd just put it off on a credit card and I was filling up on credit card debt. I knew that it wasn't sustainable but I don't know, I just assumed that eventually I would just find the right job and I wouldn't have to worry. That was the plan. That it would fix itself, which it actually ended up doing although not the way I thought it would.
Ryan: I was basically struggling to make ends meet living in New York. I was actually about to leave because I couldn't afford to live here and was barely able to pay rent. I went to college for four years and acquired thirty grand worth of student loan debt. I got offered a position delivering cocaine and I was going to do that right before this all happened.
RYAN: My grandfather was the president of a big railroad in the '80s in the Midwest. My Grandma's money, or his money, was invested in a variety of ways. She had this one fund for her grandchildren, specifically, not for her kids, her seven kids, but for her grandchildren. It was something like $500,000 total divided by 30. I have thirty first cousins, there are a lot of us. Some of my cousins had a hard life and they had already accessed their share of it. We got all this information when we got the money, we got this packet which explains the disbursements of the trust, who's taking money out and when. Some of them had actually already taken theirs out because they had kids or whatever. I got like $22,000 in July.
Cecilia: My grandfather passed away really young. He was an attorney and in his 40s when he died. I never met him, my dad was only 5 years old when he died so my dad didn't even really know him. His wealth stemmed from his job. As the story goes, one of his clients was very grateful after his help in a legal situation, but instead of payment he gave him a share in a company, which essentially meant a gigantic plot of land, like a big mountain, that the client thought was completely worthless at the time. This was probably in the '30s or '40s, and I think he probably just thought, I own this, I don't know what to do with it. My grandfatherm along with two other attorneys, got parts of this company. It became very lucrative eventually. I don't even know if it did in his lifetime but after he passed away, my grandmother inherited his share and then it all became very profitable. I'm from a very poor, small town in the Appalachian Mountains in southwest Virginia. All of the money from the town comes from coal. That's a huge part of how people are employed there, working in the mines.
Jeremy: The reason why there ended up being a lot of money is a combination of a very good life insurance payout and my father finding a really good money manager. My father was by no means smart, but one of the things he was really good at was being able to recognize when he didn't know about something and being able to find somebody who did. One of the things he would do is whenever he had money, instead of spending it he would just give it to somebody to invest or save which is probably a lot of why our spending growing up was so restricted, because my father was just throwing it all at somebody to save or invest and there ended up being way more than I thought there would be. When he died, I got $50,000. To put that in perspective, I was expecting maybe $2,000. I was expecting to take the money left over from my dad and maybe buy a nice suit for his funeral. It went from that expectation to realizing that I was now a person that didn't necessarily have to think about money every day which took a while to get used to.
Spending a life
Ryan: Basically, they're like, "Be really responsible with it. Don't go buy a car, don't do anything stupid," but I did do stupid shit. I quit my job and was like, "I'm going to focus on music only." I paid off some debt, like credit card debt that I had amassed from traveling and stint living in Turkey for awhile. I paid off $3,000 of credit card debt, then paid rent and didn't really work for two or three months. It basically allowed me to spend all my time working on art. Not working and just living off of money that you've been given doesn't feel good at all. I felt really guilty for spending the money on shit like drinks and cigarettes. It's like, "This is not what my grandmother intended for me to do with this money."
Jeremy: I took the money from my father and invested in a company that I now run where I'm publishing stuff and I'm in a very fortunate position where I don't really need to worry about my rent or my income. The hardest part about it is coming to terms with the fact that I can now think about my life in the long term because I have the privilege of making long term decisions with my life. For example, I can invest in starting a company that isn't going to make me any money because I don't have to worry about money for two years, so when I'm deciding what I want and don't want published I don't have to make decisions on things that will turn around immediately. I can make long term investments.
One of the privileges that you can get given in life, that you can be rewarded with, is developing a privilege that you weren't born with. I was definitely already born with tons of privilege but it was really hard for me to admit to myself that I was somebody who didn't have to hustle every day, and I definitely get why certain people are ashamed of having money or feel embarrassed by it, but ultimately those people are wrong because there are so many people who would love to have money, who would love to be in the position you're in, and to be ashamed of it is really disrespectful to all the people who would love to be in that position. I just embrace it. Getting all this money is definitely better than if my father had to die and I got no money but it's not as good as if he didn't die at all, but I don't get to make that decision. I might as well enjoy the little part that came about it which is that I don't need to bus tables and I can do what I want to do.
Cecilia: My inheritance enabled me to do a lot of things that I might not have otherwise been able to do; like going to graduate school and not having to take out loans and have that burden. But I don't think that I would have not done what I did because I didn't have the money. I think I still would have pursued everything that I did because it's me, these are my goals. I don't think it would have stopped me but it's definitely made it more doable and easier.
Easy come, easy go
Ryan: I had like $22,000, now I have $11,000, which sucks. I guess I spent most of it on rent and debt. It came at a really crucial time for me. I definitely mishandled it a bit, I'm pretty bad with money. It was a pretty huge thing and I'm really appreciative of it, but it's one finite amount of money. It's not like I'm receiving trust payments every month. It's a one time thing.
Also, not working can make your life pretty unstructured. You lose a little motivation. I had this total complex about the whole thing, spending this money that I didn't earn, frivolously. It doesn't feel good so I started working again, a lot. I don't ever want to go below the amount that I have right now because it just doesn't feel good. It sucks to watch it just go down. You need income.
Jeremy: Worst case scenario, if the money I've invested is something that I never make back, I just flush it all down the drain, then I go back to working six jobs. I'm not worried about that. Not having money is the terms most people live under. If I have to do that again, I don't think that's shameful. It would definitely be a disappointment and it would be indicative that I had money that I wasted, that somebody else probably could have done a lot more with.
RYAN: One of my cousins lives in Tennessee and has kids. He's had a rough life, for whatever reason, and needed money to help support his kids. I don't what the other reasons were that people had taken out money in the past, before we all received our inheritance.
One of my cousins, my cousin who is around the same age as me, who's a shithead, he can't have his because his dad's the one who's managing it all. His dad's like, "We've given you so much fucking money." My cousin's pretty spoiled. They refuse to give him the money. They said, "You owe us so much money, we're paying for your apartment," all this shit.
My oldest brother is a lawyer and has three kids, he'll probably put it into their college fund. My sister is a fashion designer, she'll just... I don't know what. They're very financially responsible and will put it away and invest it. I don't know what the little kids are doing.
Jeremy: When I talk about long term, well, I don't have to worry about my mother which was a big concern that I used to have. My mother is pretty much set until she dies and that's exacerbated by the fact that my mother is the type of person who would never retire from her job. I'm convinced she's going to work until the day she dies. The fact that her house is now paid for and that she, even though I got a trust fund, she got most of the money.
A trust fund is something that holds and administers assets for the benefit of a beneficiary.
of of Americans receive trust funds,
according to a 2010 study by the Survey of Consumer Finances
While not indefinite, inheritance works in a similar way, but the person leaving the inheritance must have died.
average American inheritance in 2013
Person to checking account
Cecilia: I don't have any relationship with my grandfather but in my mind I've kind of glorified him. He died on a camping trip in Canada in the woods. He had a heart attack. They couldn't get him anywhere to save him.
My grandmother never remarried, she never even dated anybody else. She was really devoted to her two sons; raising them and honoring that bond that she had with them. All of the stories I hear about him through different family members make him seem like a really brilliant person who has provided so much for his family.
Jeremy: One of the hardest parts about inheriting a lot of money is that the things that are really valuable that I inherited through my father aren't things that I can monetize. It's him raising me to be a practical person who understands what things are worth and it's him loving me and being able to support me emotionally and financially as a child. It's all the connections to my family and his friends that I've made. These are the actual things you inherit from people, those and the memories. You can't monetize that, but the moment you get a check for $50,000 that becomes symbolic of what this person has given you and it embodies them in a lot of ways. There's a lot of transference of your relationship with that person into this money and how you spend it. Regardless of how much money it is, the actual value of inheriting that money is that you're putting a number on a relationship that is over.
How you divide those numbers up and what you do with them has a lot of emotional weight and symbolism that I don't know if I have totally worked through. It's a totally unresolved conflict that I have; thinking about what my father would have wanted me to do with this money and if he would've approved of it. I think about how as much stuff as I do involving art, he just wanted me to go to college and get a job. It's a thing I think about every time I look at my checking account.
of American households at a given point of time received a wealth transfer and these accounted for 23 percent of their net worth, On average over the period from 1989 to 2007.
more money than households with wealth below $25,000, on average, the wealthiest 1 percent of households have inherited.
of American wealth are owned by the top 1 percent of households
Was Americans' total household wealth at the end of 2012