Posted on April 16, 2024 by Katherine Fox.

Understanding Wealth and Guilt

If you inherited $100,000, do you think that you would feel guilty about it? 

What if you inherited a million dollars or $10 million?

I'm Katherine, I'm a CERTIFIED FINANCIAL PLANNER™ and I'm the founder of Sunnybranch Wealth, a fee only investment advisory firm dedicated to serving multi -generational families and millennial and Gen Z inheritors as they manage their wealth and build a plan to create positive impact with their money.

Why do people feel guilty about having wealth?

On today's episode of Planning for Inheritance, we're going to talk about why it is that some people feel so guilty after they inherit money, so guilty that they can't even do anything with the wealth that they have inherited. 

They are literally paralyzed because of the guilt that they feel at inheriting money.

You might hear this and think that it sounds uncommon or weird. 

Wouldn't you just be happy if you inherited money? 

It's like you run the lottery, right? 

But that's not actually what inheriting money is. 

Inheriting money isn't like winning the lottery. 

Inheriting money is like winning the lottery when someone that you loved died the day before. 

That doesn't make it a good thing. Most people would give some or all of that money back to have their loved ones still be with us.

So you have to separate not only the feelings you have about getting more money and now maybe even being in a different position within society, also with the feelings of grief that your loved one passed and with the feelings of guilt that you didn't do anything to earn this money.

Let’s dive in to my experience of how all of those feelings interplay with guilt over inheriting money.

The first thing that we need to look at when we talk about wealth and guilt is separate from the fact of any inheritance. 

A lot of people who have more wealth than the average person feel guilty about it. 

They feel guilty because it doesn't seem fair that they have that money. They might not have done anything to earn that money if it was inherited wealth. 

They know, rationally and logically, that there are people for whom the amount of money that they have would be life changing. And there's a sense, especially among progressive individuals, well, if it would change their life, why do I deserve it?

How can wealthy individuals address their money-related guilt?

The most important thing for people who are asking these kinds of questions to realize is good and bad things happen to people and the vast majority of people don't deserve those things. 

People get cancer. It doesn't mean that they deserve cancer. 

People inherit wealth. It doesn't mean that they deserve to inherit that wealth. 

The question that you should be asking is what can I do with this experience? How can I create something positive with this experience?

And that for me is really the first step that most people who feel guilt about wealth, whether it's inherited wealth or any other kind of wealth in their lives, need to take. 

They need to start thinking about ways that they can take this association with money, a guilt or a negative association with money, and start turning that into something positive. And in most cases, what I find when the negative association with money is guilt, a really easy straightforward way to start changing that association and turning it into something positive is through philanthropy, through giving money away. 

It doesn't have to be giving money away to nonprofits. It could be giving away money to individuals, to political candidates, or to political causes that you support.

How can philanthropy reduce guilt at having wealth?

If you have an overwhelming sense of guilt because you have money, guilt that you don't deserve this money, the best way that you can start creating positive impact with that wealth instead of just feeling guilty is by giving it to people who can use it and by giving it away in places where you feel like you are truly creating positive impact.

A great example of this is I actually know many people who feel very guilty that their parents were able to pay for their college education when a lot of their friends didn't have that luxury and we're forced to work multiple jobs or take on a ton of student debt in order to pay their way through college.

A lot of people that I know have this overwhelming sense of guilt and really feel overwhelmed by the fact that they didn't deserve it. So instead of saying, I didn't deserve it and beating yourself up.

Think about what good can you do with that education? Because of that education, doors are open for you that aren't open for other people. You know how to navigate a social structure and a social class that many people with fewer resources don't know how to navigate. What good can you do with the resources that your wealth or that family wealth have given you?

LEARN MORE ABOUT MANAGING AN INHERITANCE

Why do inheritors feel guilty about inheriting wealth?

The next piece I want to talk about about guilt and money is actually the guilt that surrounds inheriting money. 

This can be wrapped up in everything that I've already talked about, but more specifically, now you're also getting into grief emotions. So this guilt is not just however you feel about money and having money. This guilt is also about grief. 

And where I see this come into play a lot is with people who have had loved ones die too soon. So loved ones who maybe spent their whole career saving for retirement, they're retired for a few years, or maybe they don't even get to retire, and they die young, and they leave significant amounts of money behind to their heirs. 

Their heirs are obviously grateful to have that money, but it doesn't erase the fact that a loved one died way too young, and that a loved one worked their whole life to save up this money to prepare for their own retirement and to give themselves freedom in their later years, and then they didn't get that freedom.

And instead of them getting that freedom, they died and you got all their money.

You can imagine how guilty that would make you feel, to know that you now have money that was supposed to support your parents for 10, 20, 30 years into the future. So that they could travel, so that they could do all of the things they pushed off doing when they were working because they were saving for the retirement. 

And now they don't even get to enjoy any of those things. And so if you're in that position and you feel that guilt, it can paralyze you and prevent you from doing anything with the wealth that you inherited. 

It's sort of a sense of guilt and imposter syndrome and grief all rolled up into one ball where all you can think of when you see that money is this isn't mine. Why doesn't my parent have this money? It's not fair. And again, it isn't fair. None of this is fair.

It it normal to struggle with guilt over inherited wealth?

If you're struggling with this, if you're feeling that sense of guilt, what I want to say most to you is that it is, it's okay.

It is totally normal for you to feel this. And if you're feeling this sense of guilt and it's paralyzing you, you don't need to make decisions right now about what to do with that inherited wealth. It's okay to put it someplace safe. It's like ideally a high-yield savings account right now, but if it's just a checking account, if that's all you can deal with, that's fine. Just put it someplace safe, you know where it is, and give yourself time to work through these feelings. 

If you feel like you need to see a therapist to deal with grief or a therapist to deal with the guilt your feelings around the inheritance, that can be a great idea as well. Because when you're talking about an inheritance, the guilt that you have isn’t just wrapped up in money like I've talked about, it's also wrapped up in grief.

Why do many inheritors in multi-generational wealthy families feel guilty about receiving an inheritance?

Another common reason inheritors feel a lot of guilt around inherited wealth is if they have a moral opposition to how their family made its money. 

You can see this a lot of times with multi-generational families. You could consider the case of a family who maybe they made a lot of money investing in Coca -Cola, which younger generations of the family who don't like what Coca -Cola has done as a company and what Coca -Cola stands for as a business. 

Who think that promoting sugary soft drinks is a public health threat and you don't want money that's associated with something that you see as a societal il.. 

This is very common because in a lot of families, especially families with multi-generational wealth, have made money in ways that now many people in society see as morally unacceptable. 

So if you are an heir in a family that has a huge amount of wealth and you hate how your family made that wealth,what are you supposed to do? 

How are you supposed to justify that? 

And how do you justify the fact that maybe your parents don't have the same feelings about how that wealth was generated? 

And so you disagree with them. You have a moral disagreement with them because they're spending money when you feel like the source of that money is ill-gotten, even if it was all perfectly legal. 

This is maybe the most complicated situation to work through because you have guilt about having the money itself, and then you have guilt about all of the harm that that money created. 

And that guilt is a lot more difficult to deal with than if it's just individual guilt. If it's guilt, I don't deserve this, then it can be easier in my experience to start ameliorating that guilt, as I mentioned, through giving, through philanthropy, through personal giving, through political

if your feeling is that the wealth that your family has shouldn't exist because it was created by exploiting other people or by exploiting natural resources or in some other way that is unjust in your mind, how do you deal with that?

A lot of times the way inheritors deal with that is by giving their money away and by figuring out what is enough for them, which generally is a lot less than what enough would be for other people and their other family members.

And then giving away all the money they get that's above that enough number. 

That is a totally reasonable and justified thing to do. 

For people in that situation, I generally recommend that they work with a financial advisor or a philanthropic advisor who will support them in that effort and who will help them identify how they want to give their money away, what kind of impact they want to create, and help them find opportunities that are in line with their values to give away a chunk of money that might be millions or tens or in some cases, even hundreds of millions of dollars.

There are so many reasons why people feel guilt because of having money and because of inheriting money.

If any of this resonated with you, I'm going to leave some links in the show notes about more resources where you can look to start understanding your feelings of wealth and guilt. Please reach out to me, katherine@sunnybranchwealth.com if you have any questions or schedule a meeting with me if you want to talk more about your personal situation. 

I'll catch you next time on the podcast.

Let’s take the next step together

Learning how to overcome guilt about inherited wealth is not easy. Investors can encounter a wide variety of different situations requiring knowledge and finesse to manage. If you need more help, you can reach out to Katherine Fox, CFP® and CAP®, a financial planner for inheritors to learn how Sunnybranch can help you build a plan to manage your guilt by creating positive impact with your new wealth.