7 ms·

I see this happening in the US now. For example with homes, when grandparents died in the 80s/90s a home was sold at a modest value and split among 3-5 heirs.

I see this happening in the US now. For example with homes, when grandparents died in the 80s/90s a home was sold at a modest value and split among 3-5 heirs. Which amounted to very little per family after taxes. Nowadays you have millennials set to inherit homes that are overvalued in the $1MM+ range and split among 1-2 heirs. Which can be a life changing sum of money. I personally know of people who feel little pressure in their lives because they know they stand to inherit a $1.5MM home plus whatever else their parents have at some point in their life.

mirimir 8y ago
> I personally know of people who feel little pressure in their lives because they know they stand to inherit a $1.5MM home plus whatever else their parents have at some point in their life. Unless said parent(s) get clever with reverse mortgaging, and spend all the cash on travel or whatever ;)
- ryandrake 8y ago
  Grossly generalizing a whole generation, but chances are, those Baby Boomer parents were in debt up past their eyeballs, and that $1.5MM home is going to get sold along with all their other assets in order to square everything up. This generation may be having fewer kids, but it's going to be leaving fewer net assets behind.
  - mirimir 8y ago
    I gotta say that one of my goals in life is to maximize my debt at death :) It's a delicate thing, of course, because dying with no cash or credit would suck. But hey.
    - deleted 8y ago
      [deleted]
    - ars 8y ago
      Be very careful. Elderly without children to check in on them are seen as ATM's. Extract as much money as possible and don't care about the person. Drug them so they don't complain, and schedule as many medical procedures as possible. Use providers that give you kickbacks, and charge very high rates for things like haircuts, or even drug delivery (why buy in advance, when you can deliver, and charge for it, that same day). All this changes when they have children who check in on them, ideally every day. > because dying with no cash or credit would suck. That all depends on if you retained your mental faculties until the end. If yes, you are going to want lots of cash! You will need to pay someone to do so many things you used to do yourself. If no, then any remaining cash will rapidly be taken from you anyway, so there's no point in holding on to it. My advice? Have children and love them. You will be much happier as an elderly person if you do that.
      - mirimir 8y ago
        Yes, those are all valid concerns. But I'm not the trusting sort. I have guns, and I know how to use them. And I'm planning to kill myself before I lose it completely. I have a cache of morphine and phenobarbitol. So maybe I'll die alone, but with luck, not exploited.
        ars 8y ago
        > And I'm planning to kill myself before I lose it completely. This is a common plan, but it doesn't work. When that moment arrives when you would want to, you no longer have the mental faculties to do it. Before then, you'll be feeling like everything is going just fine, so why end it? Assisted suicide or DNR's don't really work without family members to enforce them. Medical providers are incentivized to keep you alive: Both morally and financially (you can chose which counts for more depending on how cynical you are, but either way the two motives are in sync).
        mirimir 8y ago
        Time will tell, I guess. But re medical providers, why would they keep me alive if there's no money left? It's a pretty good bet that even AmEx would start declining charges, at some point.
  - taneq 8y ago
    Really? Because most Baby Boomer parents I know bought those $1.5MM houses for $26k back in 1977 and paid them off 20+ years ago.
- sandworm101 8y ago
  Or they give it to charity to spite thier kids. There is no reason to assume that elderly people plan on giving anything to thier children. The days of that societal norm are long over.
electriclove 8y ago
And with people living longer, much of this wealth won't be just parent to child but also grandparents to grandchildren in roughly a 1:1 ratio. 4 grandparents wealth going to 4 grandkids
alkonaut 8y ago
I thought ppl sold their homes at around the age where they can no longer clean and walk stairs, and spent the lot travelling or just paying for living in some home for the elderly. At least that's what my parents did :D
lotsofpulp 8y ago
I doubt there is a significant portion of Americans with parents who have $1M+ mortgage-free houses. Maybe a few in CA and the other hotspots in the west and around DC, but most people are not set to make any life changing amounts of money from their parents dying.
- Swizec 8y ago
  I bet you that if you asked those people they’d tell you inheriting $100k would be a life changing event. Life changiness scales with your environment.
  - jpindar 8y ago
    Here in the HN bubble, $100K is pocket change.
    - mrhappyunhappy 8y ago
      Can I be in the bubble please :)
- shados 8y ago
  It doesn't have to be a significant portion...just a visible one. Think of all the people who work in tech or other high paying professions and own places in NYC, Boston, SF, etc. A lot of them don't have kids, or have at most 1, maybe 2. These are homes that the kids may want to keep rather than sell, locking the "wealth" within a family.
  - nshelly 8y ago
    And in California, they (and their children) can also inherit the low tax basis from when their parents bought the property. Thank you Property 13.
    - icantdrive55 8y ago
      Again with the Prop 13? I'm about to give up, and let history repeat itself. Yes--if an child inherits a house, they can inherit the property tax their parents paid, if they fill out the paperwork within 120 days-- I believe. Multiple children usually inherit the family home, with the eventual angry sale. The home goes back on the market, and full property taxes are paid. Most kids aren't inheriting mansions. The're usually track houses in need of repairs. Most of the kids had blue collar parents, and never thought their bungalow would be worth a million dollars. It's really getting old. If the younger set had any idea how politicians wasted that Prop 13 money; we wouldn't be blaming our current problems on Prop 13. Blame your boss who who just has to live in the best neighborhood, with the best climate. I guarantee if Prop 13 was repealed REITS, rich foreigners, and Zuckerburg types would swoop in and buy up most of the stock, and rent it back to employees. Person who didn't see their dad crying at the dinner table, "But at least we would have more tax money?". Look at how your county spends your property taxes now; Not so good?
Someone 8y ago
If the population decreases, the values of many of these homes will decrease fairly rapidly.
- toomuchtodo 8y ago
  People will always want to immigrate, creating a demand floor.
  - Someone 8y ago
    Potentially a very low floor. If villages far away from major population centers die out, people may still want to immigrate, but those people may not be wealthy or willing to pay a decent sum. For example, one euro plus the commitment to renovate for $25,000 buys you a house on Sardinia https://edition.cnn.com/travel/article/ollolai-italy-one-euro-homes/index.html https://edition.cnn.com/travel/article/ollolai-italy-one-eur...
    - deleted 8y ago
      [deleted]

mirimir 8y ago

> I personally know of people who feel little pressure in their lives because they know they stand to inherit a $1.5MM home plus whatever else their parents have at some point in their life. Unless said parent(s) get clever with reverse mortgaging, and spend all the cash on travel or whatever ;)

ryandrake 8y ago
Grossly generalizing a whole generation, but chances are, those Baby Boomer parents were in debt up past their eyeballs, and that $1.5MM home is going to get sold along with all their other assets in order to square everything up. This generation may be having fewer kids, but it's going to be leaving fewer net assets behind.
- mirimir 8y ago
  I gotta say that one of my goals in life is to maximize my debt at death :) It's a delicate thing, of course, because dying with no cash or credit would suck. But hey.
  - deleted 8y ago
    [deleted]
  - ars 8y ago
    Be very careful. Elderly without children to check in on them are seen as ATM's. Extract as much money as possible and don't care about the person. Drug them so they don't complain, and schedule as many medical procedures as possible. Use providers that give you kickbacks, and charge very high rates for things like haircuts, or even drug delivery (why buy in advance, when you can deliver, and charge for it, that same day). All this changes when they have children who check in on them, ideally every day. > because dying with no cash or credit would suck. That all depends on if you retained your mental faculties until the end. If yes, you are going to want lots of cash! You will need to pay someone to do so many things you used to do yourself. If no, then any remaining cash will rapidly be taken from you anyway, so there's no point in holding on to it. My advice? Have children and love them. You will be much happier as an elderly person if you do that.
    - mirimir 8y ago
      Yes, those are all valid concerns. But I'm not the trusting sort. I have guns, and I know how to use them. And I'm planning to kill myself before I lose it completely. I have a cache of morphine and phenobarbitol. So maybe I'll die alone, but with luck, not exploited.
      - ars 8y ago
        > And I'm planning to kill myself before I lose it completely. This is a common plan, but it doesn't work. When that moment arrives when you would want to, you no longer have the mental faculties to do it. Before then, you'll be feeling like everything is going just fine, so why end it? Assisted suicide or DNR's don't really work without family members to enforce them. Medical providers are incentivized to keep you alive: Both morally and financially (you can chose which counts for more depending on how cynical you are, but either way the two motives are in sync).
        mirimir 8y ago
        Time will tell, I guess. But re medical providers, why would they keep me alive if there's no money left? It's a pretty good bet that even AmEx would start declining charges, at some point.
- taneq 8y ago
  Really? Because most Baby Boomer parents I know bought those $1.5MM houses for $26k back in 1977 and paid them off 20+ years ago.
sandworm101 8y ago
Or they give it to charity to spite thier kids. There is no reason to assume that elderly people plan on giving anything to thier children. The days of that societal norm are long over.

electriclove 8y ago

And with people living longer, much of this wealth won't be just parent to child but also grandparents to grandchildren in roughly a 1:1 ratio. 4 grandparents wealth going to 4 grandkids

alkonaut 8y ago

I thought ppl sold their homes at around the age where they can no longer clean and walk stairs, and spent the lot travelling or just paying for living in some home for the elderly. At least that's what my parents did :D

lotsofpulp 8y ago

I doubt there is a significant portion of Americans with parents who have $1M+ mortgage-free houses. Maybe a few in CA and the other hotspots in the west and around DC, but most people are not set to make any life changing amounts of money from their parents dying.

Swizec 8y ago
I bet you that if you asked those people they’d tell you inheriting $100k would be a life changing event. Life changiness scales with your environment.
- jpindar 8y ago
  Here in the HN bubble, $100K is pocket change.
  - mrhappyunhappy 8y ago
    Can I be in the bubble please :)
shados 8y ago
It doesn't have to be a significant portion...just a visible one. Think of all the people who work in tech or other high paying professions and own places in NYC, Boston, SF, etc. A lot of them don't have kids, or have at most 1, maybe 2. These are homes that the kids may want to keep rather than sell, locking the "wealth" within a family.
- nshelly 8y ago
  And in California, they (and their children) can also inherit the low tax basis from when their parents bought the property. Thank you Property 13.
  - icantdrive55 8y ago
    Again with the Prop 13? I'm about to give up, and let history repeat itself. Yes--if an child inherits a house, they can inherit the property tax their parents paid, if they fill out the paperwork within 120 days-- I believe. Multiple children usually inherit the family home, with the eventual angry sale. The home goes back on the market, and full property taxes are paid. Most kids aren't inheriting mansions. The're usually track houses in need of repairs. Most of the kids had blue collar parents, and never thought their bungalow would be worth a million dollars. It's really getting old. If the younger set had any idea how politicians wasted that Prop 13 money; we wouldn't be blaming our current problems on Prop 13. Blame your boss who who just has to live in the best neighborhood, with the best climate. I guarantee if Prop 13 was repealed REITS, rich foreigners, and Zuckerburg types would swoop in and buy up most of the stock, and rent it back to employees. Person who didn't see their dad crying at the dinner table, "But at least we would have more tax money?". Look at how your county spends your property taxes now; Not so good?

Someone 8y ago

If the population decreases, the values of many of these homes will decrease fairly rapidly.

toomuchtodo 8y ago
People will always want to immigrate, creating a demand floor.
- Someone 8y ago
  Potentially a very low floor. If villages far away from major population centers die out, people may still want to immigrate, but those people may not be wealthy or willing to pay a decent sum. For example, one euro plus the commitment to renovate for $25,000 buys you a house on Sardinia https://edition.cnn.com/travel/article/ollolai-italy-one-euro-homes/index.html https://edition.cnn.com/travel/article/ollolai-italy-one-eur...
  - deleted 8y ago
    [deleted]