Should I leave an inheritance for my children or spend it?

Monday, 25 August 2025

Should parents just enjoy what they saved? Is the 'quarter acre' dream inheritance still a reality? And how do we have these conversations?

Getting an early inheritance has left 52-year-old Aucklander Jane McCarroll “weak with appreciation” for her parents. After six redundancies, a divorce, raising two children as a single mum, she figured it was time for a meaningful career switch to early childhood education.

But without the financial capacity, she was stuck.

“I was thinking ‘God, how am I going to get this over the line?’ My mum is there going, ‘yeah, let's do it, you've always loved kids’.” Part of their funds are also going to her 18-year-old daughter’s university degree, so she doesn’t fall into student loan debt.

An early inheritance can be a life-changing experience for people. In Lynda Moore’s case, it has meant the 60-year-old is able to be beside her mother in a separate dwelling on the same plot of land in Motueka.

On the other hand, investing or paying such a large sum can be a problem if parents don’t discuss what it means for the future, Moore - a financial coach of Money Mentalist – says.

Should we leave an inheritance or enjoy the money?

McCarroll is mindful of how lucky she has been, but she’s a believer in parents choosing how to enjoy their hard-earned money.

But Moore says that decision can become muddled thanks to the plethora of advice - online and from friends - which don’t necessarily cater to a person’s values.

Even her mother's friends questioned her for sharing the inheritance early, but the duo saw it as a 'win-win', Moore says. So, her answer is to consider your family values, circumstances and relationships.

'A little bit of the not-quite-so-nice side is where the parents are actually giving the inheritance and putting their own retirement and wellbeing at risk because they are helping too much. So, they haven't got that boundary around themselves, and sometimes that's them, sometimes it's guilt put on them by the children.'

Dr Pushpa Wood, director of Massey University's Financial Education and Research Centre, says the question around whether to leave an inheritance is common at her workshops.

Some people tell her their children have access to their bank accounts and can see how much is being spent from their 'expected' inheritance. But children should not expect their parents to sacrifice their life savings for them, she says.

I believe that [parents] also deserve just as much comfort and enjoyment in their later years because they have worked very, very hard to get where they are and our young people keep forgetting that.'

Is inheritance still a reality for us?

Surveys in recent years show Kiwis are concerned about even being able to afford to leave a legacy and that Gen Z and millennials are receiving parental support to get on the home ownership ladder.

McCarroll’s addition to the team at Auckland-based fintech startup Money Sweet Spot, which helps individuals in debt, has opened her eyes to how big the debt crisis is in New Zealand.

Economic crises like these pose new challenges that aren’t common to previous generations, she says, and ultimately influence matters like inheritance.

“I don't think I'll be able to provide my children what my parents have provided me, but I don't know. I might, you know, it's also a different world.

“When I grew up with my family, my dad never lost his job… They haven't experienced separation - halving everything, starting again.

“I did that same kind of questioning around when I got a mortgage for my home I'm in now; mortgage was six times my income and I think when it was my parents go, their mortgage was maybe four times their income.”

McCarroll says she has been paying a mortgage since she was 20 but had to start a whole new mortgage at the age of 44. With prices rapidly increasing, it means she’d be nearly 70 before paying off that debt – just to own one home.

“I thought, God, I'm a bit of a failure, but my story is not uncommon and that's why [I’ve been] wanting to help women particularly but all people make the most of the money they've got,” she says.

“I want to leave my children with respect for money and knowledge about money, and I don't want to leave owing any money and I don't want them to rack up credit debt.”

Instead of just thinking about property or an estate, we need to be open minded about the various ways of leaving a legacy behind, she says.

How do I talk about inheritance plans or not affording it?

Parents are often surprised when Moore asks if they've even had a conversation about what their children want from them.

'There are far too many poor solicitors who sit down with their clients to redo wills and all of this sort of thing and discover it's never been talked about.

'We don't talk about money anywhere near enough or as potentially openly, and that sometimes is because of fear, you know, 'if my kids know I've got all this money, they're going to want it'.'

Dr Wood says managing expectations is key in these conversations.

She had the tough job of breaking the news to one of her older brothers that he's had more than his fair share of an inheritance when she calculated all the financial support he had received from their father as an adult.

• 'Someone's got to raise it and it can be at defining points where something's happened like the parents need care or one of them suddenly has got ill,' Moore says.

• Show you're coming from a place of love and care to manage emotional tensions, she says.

• Get your children into the habit of talking about money as they mature so it's not a shock when they hear about your inheritance plans. For example, when they head into university, speak to them about their loans.

• Lead with questions, don't just tell children what you want them to do with an inheritance they might receive. 'It's their story, not yours … We assume that our money story is the same as our children's. Our expectations are their expectations, and they might be, but they might not be so,' Moore says.

• Get advice from a professional. Moore suggests, if you're giving away an early inheritance, make sure to save some money for yourself. 'You might go, 'oh, I'll give you that now and I can come and live with you later'. Well, what happens if that relationship breaks up?'