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You’ve got $50 million dollars – as the title implies. What do you do with it? Before you go blowing it all on a fancy cruise vacation, new house, BMW, new car, or yes, avocado toast, take some time to collect your thoughts and let the fact that you’ve inherited a fortune sink in. That’s what Ken from Sacramento did. After inheriting $50 million dollars from his parents, he called into the Dave Ramsey show to gain some perspective on how to manage his money. You can learn from Ken on what to do if you ever wind up in the same situation. Here are a few tips on managing inheritance that we’d like to share:

Stay calm and don’t be in a rush to spend your money

See professional advice

Set clear financial goals

Pay off debts and pad your emergency fund

Invest your money wisely

Don’t blow it all

Giving back

1. Take a Breath and Don’t Rush

This one should be obvious: don’t rush to blow it all. When Ken reached out to the Dave Ramsey show about how to spend his $50 million dollar inheritance, Ramsey offered the following advice: spend some, save some, invest some, give some of the money to charity, etc. The news of an unexpected inheritance can be overwhelming, triggering a flurry of emotions. Try to adjust to your new financial reality before making any rash decisions.

2. Seek Professional Advice

One of the first things you may want to do is to seek out professional advice from a financial advisor. While Ken Consider consulting with a financial advisor, accountant, or lawyer who specializes in inheritance matters. That is why the caller called into the Dave Ramsey show: to receive advice from a professional on what to do with his inheritance. A financial advisor can help you grasp the full picture of dealing with taxes, investments, any fees, bills to pay off, debts, etc. An advisor can offer the best strategies for managing or investing your assets. A financial advisor may also help you tackle paying for everything in this era of high inflation. You may want to consult with an advisor you are really comfortable with, and who you have a good relationship with. You don’t want to stick with the SAME advisor just because that particular person is someone who your parents used (IF your parents had one).

3. Set Clear Goals

Once you’ve gathered the necessary information, it’s time to set clear goals for what you want to achieve with your inheritance. You may want to look at paying everything off you owe before deciding to (wisely) use the money to invest, renovate your house, travel, etc. Specific goals are the key: whether it be diversifying your portfolio, or planning your estate.

4. Pay Off Debts and Build Emergency Fund

This one goes without saying: If you have any outstanding debts (student loans, credit card debt, etc.), consider using a portion of your inheritance to pay them off. Even if you comb through your finances with a financial advisor, you still shouldn’t touch that money and just brazenly spend it all. When you pay off your all of your debts, you can relax and focus on investing for the future. It’s a practical way to secure your financial future and relieve the burden of debt. It’s also good to prioritize an building up an emergency fund to cover unexpected expenses. You don’t have to have a specific amount between three to six months of savings, but if you have an inheritance and are looking to save for the future, it’s always wise to do following: pay off debt and have an emergency fund. It sounds obvious, but when you actually have access to the money, it’s tempting to simply blow it all. You might also underestimate how much money you really need to live on and invest for your future.

5. Invest Wisely

Consider diversifying your inheritance into investments to mitigate risks and maximize returns. Consult with a financial advisor to develop an investment strategy. Whether you invest in stocks, bonds, real estate, or put money into mutual funds, TFSAs, or RRSPs, make informed decisions.

6. Plan for the Future

Once you have used that money to plan for YOUR future and invest wisely, you may also want to spread the wealth (to your family members and loved ones, that is). You may want to use some of that inheritance to fund your children’s education. You may not have a million to your name, but estate planning is always valuable. Take the time to create or update your estate plan, including Wills, trusts, and beneficiaries. Planning ahead ensures that your assets are distributed.

7. Enjoy Responsibly

It sounds like a beer slogan, but it’s true: enjoy your money responsibly. Treat yourself to something special, but avoid overspending or making impulsive decisions that could deplete your inheritance. Stories abound about lottery winners who blow through their money within a decade and wind up broke. If you’re not careful, the same could happen to you, regardless of how you come across your windfall (i.e. lottery or inheritance).

8. Give Back

Lastly, many people who have their Wills drawn up often consider leaving something for charity. Many people do this in their Wills, but if you ever come across a significant windfall, you may want to consider donating the money right away. That money you donate will surely have a meaningful impact on others around you.

Whether you inherit a million, or a small windfall, just be sure to manage it carefully.

Be sure to seek out advice, like Ken from Sacramento.

Are you lucky enough to get some of this woman’s inheritance?

Updated: June 2024

Inheritance: everyone dreams of inheriting oodles of money from a rich aunt or uncle. But what happens when you actually get the money? It might not be everything you wish for.

Marlene Engelhorn is exactly in that position: she inherited a whopping $36.6 million dollar (in Canadian dollars) from her rich grandmother. She should be set for life, right?

Instead, the wealthy heiress is quite unhappy with the princely sum of money.

Inheriting the money was bittersweet for Engelhorn; it’s enough to live on for the rest of her life, but it left the heiress with a nagging feeling in the back of her mind. Engelhorn felt conflicted: “I am only wealthy because I was born in a rich family. And I think in a democratic society of the 21st century, birth should not be the one thing that determines whether or not you’re gonna get to lead a very good life,” Engelhorn was reported as saying.

She’s not alone: many wealthy Austrians have made their fortunes in finance, real estate, manufacturing, and the (burgeoning) tech field. The rich often reside in cities like Vienna and Salzburg. Austria, a country known for it’s profound musical legacy, being the birthplace of classical music legends like Mozart, Haydn, and Strauss, is a cultural hub for many who visitors.

Engelhorn began a campaign for heavier taxes on the wealthy in Austria; this included campaigning for an inheritance tax. Her pleas to the Austrian government fell on deaf ears; the tax inheritance laws that Engelhorn was hoping for didn’t come to fruition. She has therefore decided to spearhead a grass-roots campaign for heavier taxes to be levied against the wealthy in Austria.

Partnering with the Foresight Institute in Austria, Engelhorn is looking to have a committee of Austrian residents tackle economy inequality by redistributing the €25 million ($36.6 million Cdn) she is generously giving the committee to play with.

How does this work?

Engelhorn and the Foresight Institute invited 10,000 Austrian residents over the age of 16. The number will be whittled down to a lucky 50 residents, who will be randomly selected to form the “Good Council.” These members will decide (over a period of six weekends) as to how the money will be spent.

Engelhorn also continues to work with charitable groups, like Millionaires for Humanity and Tax Me Now.

She continues to lament that “the Austrian system shouldn’t allow her to accumulate so much wealth.” But without any inheritances taxes in sight, Engelhorn is left to her own devices to distribute her own wealth.

Until that changes, Engelhorn plans to give away most of her inheritance.

You can read more, here.

Pet Care: “The Dog gets everything when I die.”

Pet care: our furbabys are spoiled. It’s not uncommon for people to spoil their furbabys; Instagram and other social media is littered with videos and pictures of people playing with their beloved Fidos and felines, pampering them, feeding them, and just enjoying their presence. (In fact, pets sometimes get receive better care than other humans.)

Is it any surprise that people want their pets to be taken care of when they die?

There are some people who love their dogs, cat (and by extension, birds and rabbits) more than anything in the world, and have a closer relationship with them over their human counterparts (we’ll get to some real-life examples later.) It’s an increasingly popular trend: leaving behind money and assets for the care of their non-human loved ones. It’s not so far fetched when you consider how much people pamper their dogs and cats already – in fact, it’s a testament to the deep bond people share with their furry companions.

The History of Pet Inheritances

Reasons for this increasing trend

Legal Considerations

Challenges

History of Pet Inheritances

The concept of leaving money or assets to pets isn’t entirely new. In fact, it dates back centuries. Roman Emperor Gaius Caligula, for instance, left behind a substantial inheritance for his beloved horse, Incitatus. His horse was gifted with a complete with a marble stable, fine fodder, and a staff of servants (no word on how long the horse lived after his passing.) Then, there are the myriad of modern day stories: Leona Helmsley, for instance. And the late Karl Lagerfeld has a cat worth over $3 million dollars. The trend has gained momentum in recent years, with many pet owners treating their pets better than their human family members.

Reasons for the Trend

Several factors contribute to the rising popularity of leaving inheritances to pets:

1. Pets are like family (and are treated as such): Pets are often cherished as family members rather than animals (at least for dogs and cats, anyway.) This gives pets a status deserving of consideration in planning for their estate.

2. Concern for Their Well-being: Leaving a financial legacy to their pets ensures that they receive the care and attention they deserve, even in their owner’s absence.

3. No Heirs: People who are either childless or don’t have family members, people keep dogs or cats for company. They become as close to their owners as family. Leaving behind something to take care of their pets is a natural choice.

4. The Growth of Pet-Related Services: The pet industry has exploded in recent years, from pet spas, gourmet pet food, to pet therapists and luxury accommodations. With these services readily available, leaving an inheritance to pets becomes more feasible and practical. It really shows how much people love their pets and would do anything to take care of them.

Legal and Practical Considerations

While the idea of leaving inheritances to pets may be heartwarming, there are legal and practical aspects of these types of arrangements. In many provinces/territories, pets are legally regarded as property rather than as beneficiaries, which can make direct bequests challenging. To be fair, how would you directly pass on wealth to a pet? You would need someone else to look after the pet in question for you. Instead of inserting your wishes into a Will, you might want to look into a Pet Will, which allows you to comprehensively provide details for pet care after your passing.

A Pet Will allows you to legally set aside funds specifically for their pets’ care and designate a trustee responsible for managing the assets on behalf of the pets. Caregivers ensure that the pets receive the necessary care, and detailed instructions cover everything from food to medicine. It also includes any special instructions the pets might require for care.

Challenges and Controversies

Leaving inheritances to a dog or a cat is well-intentioned, but this process has it’s obvious challenges: some family members may dispute these arrangements in court, arguing that the funds should be allocated for human beneficiaries (this was the case for Leona Helmsley), rather than to pet care. There is also the sobering concern people have for their pets: will caregivers maintain care for the pets in question, or just run off with the money they were provided with for the pet’s care? Make sure ALL of your loved ones are taken care, with the right estate planning!

How much is the house from Home Alone worth?

A rendition of the house from Home Alone

Remember the “Home Alone” movie? Of course you do! You probably watched it several times as a kid. You probably watched the movie every Christmas, and have all of the lines memorized. At the very least, you know the name of hero in the movie: Kevin McCallister. The beloved Christmas comedy was released in 1990, and tells the story of Kevin McCallister, the 8-year-old boy who is the black sheep of his family. He’s left behind at home when his family rushes off to Paris for Christmas. If this movie took place in 2023, the mother would be frantically texting her son at home, or searching for him via social media. In any case, Kevin is initially excited to be left alone in a house that looks like a gigantic mansion. Hijinx ensue when two burglars try to rob the place when Kevin is left home alone. The ingenious eight-year-old arms the house with a series of booby traps, turning the house into a formidable fortress.

The biggest question that movie leaves unanswered however, is how did the Kevin’s father afford that giant mansion in the movie? (If you haven’t seen the movie, checkout clips on YouTube to see how massive the “home” is.) The Federal Reserves an answer: Kevin McCallister’s family is part of the one percent of Chicago’s residents (or perhaps mobsters, as some have speculated.)

The New York Times now has an answer to as the Federal Reserves has determined Kevin MCallister’s family is in the one percent of Chicago residents based on the value of their home.

According to the New York Times: “In 1990, the house was affordable only for the top 1 percent of Chicago household incomes, and that would still be the case today.” For a house as massive as the one in “Home Alone,” The Federal Reserve Bank of Chicago estimates that the home would have likely have been affordable with an income of $305,000 in 1990. In today’s terms, that’s roughly about $665,000 as of 2022. ($300k is likely considered chump change for a home today, in certain places.)

Peter and his wife, Kate McCallister would have had to have been earning at least $305,000 annually in 1990 to afford the massive mansion, which sits on the North shore of Chicago.

It is also not cheap to take fifteen family members for a Christmas vacation to Paris. No wonder fans of the beloved movie Fans have constantly speculated on how rich the McCallister family is. The movie, of course, never reveals what his father does for a living (hence the speculation that his father was a mobster in the movie.)

You can read more about the McCallister family here.

Updated: June 2024

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