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In the opening scenes of the film Rain Man fast-living Charlie, played by Tom Cruise, finds out that all he inherits from his father is a car. The bulk of the estate goes to an autistic older brother Raymond (Dustin Hoffman).
It was the classic tale of a son spending a bequest before he'd received it and being shocked or outraged when left out of the will.
One of the world's richest men, Warren Buffett once said: "The perfect inheritance is enough money so that they feel they can do anything, but not so much that they could do nothing."
The word inheritance opens a can of worms and can cause huge family rifts, result in the younger generation not fulfilling their potential, or even in elder abuse.
Our desire to leave inheritances is buried deeply in our prehistoric brain. It's about looking after our own genes and ensuring that offspring can survive and breed. The need to give to the next generation is literally bred into us.
But inheritances aren't just about money. Parents leave both a material and psychological legacy says Rhonda Pritchard, a psychologist and author of How Money Comes Between Us.
Pritchard sees two general approaches by parents to their estate. One is: "It's my money so it is my choice who I leave it to." And the other: "My estate is family community property and I need to let my family know what my intentions are and take into account the views of the family members."
The law in New Zealand, unlike some European countries, does not stipulate exactly who people must leave an inheritance to in what proportions. The Family Protection Act, does, however allow parents, children, grandchildren, great grandchildren, and adopted children to make claims against an estate through the Family Court or High Court if they believe they have not been "properly provided for".
"When [parents] are making decisions about what they are going to bequeath to their beneficiaries it is important they understand what effect it might have," says Pritchard.
"If, for example, they choose to leave more to one family member they need to think what that might do to the relationship with the others."
It's not as simple as it seems to leave equal shares to each family member. "Everybody has a different idea about what is fair," says Pritchard. Five examples of what people see as "fair shares" are:
We all get the same.
We are awarded different amounts depending on the contribution we have made to the parents.
I want to be treated differently because I have special needs.
I want the bequest to be distributed unequally because of what you have already given to some members of the family.
It is fair because that is what I was promised.
The waters can be muddied by loans and gifts given during a person's lifetime to his or her children. The children that received the help will never remember and the siblings will never forget, says Joan Baker, author and wealth coach.
It's important to document all gifts and loans during your lifetime. Some people will even include this information in their wills.
Children in our society often think it is their entitlement to inherit. "When we were children we depended on our parents to provide for us," says Pritchard. Some adult children never grow out of that idea.
Yet familial obligations can shift back and forth. And in some cases, even today, older people can lose their money and become financially dependent on their children. Just ask some of the older people who lost their life savings in finance companies.
There have been generational shifts in the way we think about inheritances over the past century. The depression generation were, and still are, very much rooted in the idea of leaving a legacy for their children.
Although it's hard to generalise, Baby Boomers have retired with more money and also see their children are better off financially than they were at the same age and may not see the need.
It's not surprising that the idea of "spending the kids' inheritance" is taking off .
Spending up large in early retirement can be dangerous, however, in case you live longer than expected and are left living on Government superannuation alone. And if you die earlier than expected you might leave an inheritance by default.
In some cases people prefer the idea of helping their children out instead of leaving a bequest.
Baker says there is a tendency in New Zealand for families not to communicate and this can lead to problems. This is especially a problem where farms or small businesses are involved where realistically they couldn't be split among three or four children.
It's important for families to get together and discuss how one member, for example, may have benefited from the farm capital by being put through law school and perhaps another given a leg up in business, says Baker, who has just published Your Last Fencepost, Succession and retirement planning for New Zealand farmers.
Baker has been a facilitator in such discussions and recommends getting the family lawyer involved.
One area that adult children often feel aggrieved about is their parents having to spend their capital on retirement homes. They feel bitterness that their "inheritance" is eaten up by the government.
But as Barry Shea, general manager senior services of the Ministry of Social Development points out, an inheritance only becomes an inheritance when the parent has passed away. Until that time the assets belong to the parent.
In some ways, says Jeff Matthews senior financial adviser at Spicers Wealth Management, older people got better healthcare and free education for their children from their taxes.
"When did it ever say if you went into full-time care the state would pick up the tab?" says Matthews.
Yet it can be galling for younger people who see their parents' capital disappearing in rest homes while the person in the next room who has saved nothing has it paid for by the state.
"I have a friend whose mother and father went into care then the rules changed. What might have been a $600,000 inheritance has been whittled down to $15,000," says Matthews.
There is also the question of whether a will is the best solution for inheritances. Baker says all too often people use wills to state their intentions, when a testamentary trust would do a better job. That way the trustees can have discretion about handing the money out after your death. This can work well for beneficiaries who are in their teens or 20s and might otherwise blow the money or waste their lives if they get large sums of money too early. "That
is often the ruination of them."
While it might be a good idea for a 25-year-old to get the money needed to do a Harvard postgraduate degree, giving the same sum to a sibling for a sports car mightn't be such a smart idea.
Living in Queenstown, Baker sees too many "trustafarians" living a life of leisure on their parents' hard earned legacy.
Matthews, who is a trustee himself, found himself in a similar situation, turning down one beneficiary who came to him for the cash to go on an overseas trip - infuriating her. She wanted her "inheritance" before her mother died. But Matthews felt his obligation was to ensure her mother had sufficient funds in her final years.
