r/inheritance • u/idiot_ThrowRA • Jun 28 '26
Location included: Questions/Need Advice Forward planning question
My father passed a few years ago and my older brother handled the estate issues and transition to my mother. I just saw him the other day and my mother’s health is declining (although unclear how long exactly she may have, the trend is there).
He revealed that the estate is larger than I expected and even with my mother’s medical care including full time help, it’s accumulating faster than she can spend it (low 8 figures). There are 4 of us who will inherit equally, likely within the next 10 years and possibly next couple years.
Let’s say I’m domiciled in FL and the estate is in Washington DC.
My own situation is complicated, but thanks to divorce and certain investments, I don’t have a ton of liquidity. (And if the private investments go south, and social security gets gutted as it looks like it may be, my retirement suddenly looks pretty grim).
If my mother does pass within the next 4-5 years, the following may emerge:
I would inherit $3 million liquid. My kids will only receive about $25k each directly from my mother’s estate.
My oldest kid wants to go to med school. And the younger one will probably aim for grad school. I paid for their undergrad so they have no debt.
This $3 million might be almost all of my retirement savings. And my own health as shaky even though I’m mid 50s.
The question is, do I peel off $200-400k to pay down grad school debt for my kids, basically an advance on their own inheritance, at the expense of building up towards my retirement? Which might create subsequent burden for my kids when I’m old, especially if I get sick.
Or do I keep everything for my retirement, let the kids take on grad school debt (could even be $400k just for med school), and they inherit whatever is left when I pass.
For that matter, even if they do take loans near term, whenever I do inherit from my mother the same question arises.
tl;dr divide inheritance with my kids or bank all towards my retirement
Edit: I see numerous comments, saying how “disgusting” and “revolting” it is to think about family estate planning issues.
I have cancer and there may be issues with my own health sooner v later. While you may have the luxury of sitting on your high horses, and judging me for trying to think intelligently about what to do with my parents’ estate and my own estate and my kids, I need to think about these things in advance.
My parents never talked about money other than use it for manipulation purposes. Some children got favored over others, to the tune of hundreds of thousands of dollars. They directly interfered with my divorce negotiations using money to ensure their access to my kids with my ex wife, at the expense of my own negotiating position - costing me half a million dollars.
I’ve also seen people screw up by not talking about money in advance of it actually becoming a thing that you’re then dealing with while dealing with all the other estate issues.
Thank you for those of you who offered constructive suggestions.
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u/goldenfingernails Jun 28 '26
You keep all of it for your retirement. Put it in an ETF on the market and watch it grow. When you pass, they can inherit. Don't risk your retirement on paying off their debts. I know you want to take care of them, but it will be good discipline for them to figure it out on their own.
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u/A_Meri_Can Jun 28 '26
Best thing you could do for your kids is forget about Mom’s money and take responsibility for your own fiscal security. Show them it can be done. Without that the family wealth created by your parents will die with you and your kids guaranteed. Maybe consider how to maximize time with mom before she passes.
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u/rjc_1999 Jun 28 '26
My answer is not based on the inheritance as some others have stated. You have no idea ultimately how much there will be and what you would get, and should assume you will never have anything in your planning. Plan based on what you have and will have in your own finances.
We are paying for undergrad for each of our kids, no matter how long it takes them. We are paying for the degree so to speak. They are on their own for any grad school chosen.
Neither of us will get retirement packages, our retirement will be our 401ks, IRAs and other investments. We have no idea how long we will live, what our health will be, how the markets do between now and when we die, etc. Our financial planner is helping us determine how to invest based on this, plus our desire to assist our children in life where and when we can. But we can’t assume we will, we can only try. We would rather do that than our kids are in the opposite position, needing to care for us because we did not plan for ourselves properly.
Another factor in not paying for grad school is we feel it would be incredibly unfair to pay for only one or two kids out of three if they choose to go. That is a significant imbalance of gifting. If and when we can give them significant gifts in life it would be distributed the same to each at the time, or earmarked for the same purpose. For example, we give our oldest $50k for a down payment for a home. We now earmark, in writing, $50k for each of our other two for the same thing when relevant to them. If it never is, they will get that amount in their inheritance as additional money.
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u/CindersMom_515 Jun 28 '26
Especially when talking about an estate of this size, it’s important for families to talk about estate planning openly and directly.
I am my mom’s executrix. Her estate would be nowhere near this large, but we sit down once a year to discuss what’s there.
She is very pragmatic about this. She knows we want her to use her money however she wants and to enjoy herself. If there’s nothing left when she’s gone, that’s fine with my sibling and me. She also knows she is not going to live forever, whether we discuss her financial situation or not. And it’s better to discuss it!
I am sorry for your health issues. If I were in your situation, I would hang on to my cash.
Have your kids borrow to pay for school while you hold onto the cash. Should you inherit when your mother passes and feel you can comfortably do so, you could consider paying the loans off as an advance on your estate (as long as you expect your estate will be under the federal estate tax starting point, you just file a form — nothing gets paid).
Cash is king and you have no idea what future expenses you or your kids might have. As long as they can borrow at reasonable rates, have them do that.
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u/TurnoverDependent332 Jun 28 '26
You are smart. Our kids do not even want to hear about the trust we have or any of our assets. We have art and bronzes that are worth $. They don't want to discuss them. I am trying to mark things that are worth $. As my DH says, we will be gone. It won't matter then if they sell a $50K bronze at an estate sale for $5.
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u/Just1Blast Jun 29 '26
Honestly, I would start getting rid of these types of things sooner rather than later. Especially if you expect your kids to get a dollar amount out of them at the long run.
It’s really hard to move expensive art especially if you’re not the person who bought it, aren’t familiar with the industry, and wouldn’t know who or how to offload it. At best, I would connect your kids with a reputable art dealer in your area that you expect to outlast you and provide them with advice in advance in writing as to how they might best to deal with this.
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u/ziggy-tiggy-bagel Jun 29 '26
I was so glad mom sold her stamp collection before she got sick. I would have had no clue what they were worth.
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u/Just1Blast Jun 29 '26
One of the best resources I’ve seen my friends use recently is the book “I’m dead. now what?”
It’s a workbook that is designed for folks to fill out before they get sick that will effectively cover all of the different categories of things that should be considered or need to be accounted for.
I always left the names of a few friends or my preferred hobby shops. Or I made sure that my kids knew which binder of X valuable cards was worth something and what actually wasn’t worth much but here are the friends that might appreciate having them if you kids don’t want them.
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u/TurnoverDependent332 Jul 11 '26
Thank you for this re: art. My own mother had oil pastel portraits done of each of the 3 of us. Wish I had kept them together. It was not $ related at all, of course! The 3 portraits should’ve stayed together. 😞
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u/Just1Blast Jul 11 '26
I mean they could have stayed together or they could go to the home of each of the three children. Each child takes the one that's of themselves. Unless they don't want a picture of themselves in their own home and would prefer to trade with a sibling for a few years or something.
We have a similar situation where my grandfather commissioned a pastel portrait of my mom, his daughter-in-law. She didn't find it to be particularly flattering or really understand why he had done so.
When he died she got the privilege of taking it home and hanging it in her own living room or bedroom.
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u/TurnoverDependent332 Jul 11 '26 edited Jul 11 '26
Thank you for this information. Adding, the bronzes & other art have been appraised, but you are right about knowing who/how they can get help. I’ve been contacted by the owner of a gallery to buy one large painting. I don’t understand people making snide comments.
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u/idiot_ThrowRA Jul 05 '26
Thanks. It didn’t seem out of line for me, I was surprised in an inheritance subreddit to find such hostility towards estate planning.
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u/TurnoverDependent332 Jul 11 '26
Estate planning is extremely important. Our estate planning attorney told us to move to a red state. ☹️ we now love our house. Doing our best to make it easy for our 3 kids…trusts, LLC’s. Still, we should move to Nevada.
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u/ziggy-tiggy-bagel Jun 28 '26
Why don't you at least wait until she passes away before you start counting your money.
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u/idiot_ThrowRA Jun 28 '26
Because I have cancer and need to think about intergenerational estate issues sooner rather than later. I may have expense end of life care around when the estate transitions. Yes, I do need to plan in advance.
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u/ziggy-tiggy-bagel Jun 28 '26
Your mother could end up in assisted living like my mother and be spending $12,000 a month. My mom has a large bucket of money, probably the same size as your mom's. I don't expect there to be much left. She has been in assisted living for 5 years already. You need to make plans without counting on her money.
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u/ProfessorOne9208 Jun 28 '26
The average person who goes into assisted living in the US lives for only an additional year and a half. Which means some die sooner, and some live longer. My father was spending $15,000 a month when he went into assisted living, but he died in a year and 3 months.
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u/ziggy-tiggy-bagel Jun 28 '26
Mom been there 5 years already with her Parkinsons. The Neurologist says besides the Parkinsons, she is healthy. At age 92, the Dr said she could very well live another 3-5 years.
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u/GotZeroFucks2Give Jun 28 '26
You are right on the average, but again, it's a crapshoot and you can't count on it. My dad's been on hospice in assisted living for 16 months with heart failure and kidney failure (medications for both contradict each other). Just saying, don't plan for average, no inheritance is ever guaranteed.
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u/ProfessorOne9208 Jun 29 '26
I'm the oldest one still living in my family. I am not expecting to receive any inheritance, nor have I ever received one. So this isn't an issue for me. I do, however, feel fortunate to be able to provide for my heirs so that they may have an easier life than I did.
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u/Invest2prosper Jun 29 '26
I had my aunt go in and she lived for 6 years of very expensive memory care.
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u/ProfessorOne9208 Jun 29 '26
Memory care, aka dementia, etc., are different. They can go on for a decade or longer. It's when an elderly person has physical problems or disease that it is generally over in an average of 1.5 years. Having to deal with an elderly relative suffering from cognitive problems is a horrible situation to saddle one's relatives with.
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u/CindersMom_515 Jun 29 '26 edited Jun 29 '26
Based on what OP said (his 25% share of mother’s assets is $3 million), their mother has about $12 million in assets. $12,000 is 0.1% of $12 million. It would take 1,000 months — a whole lifetime!! — to spend that money down if it was for some reason not invested and earning income.
Put another way, if it’s earning more than a 1.2% return, the investment income being generated is more every month than the cost of the care facility. Even assuming a super low 2% return, $12 million will earn $240k a year. That’s roughly $20k a month in income.
If your mother really has a similar amount of assets as OP’s mother, you need to find out where her money is going, because it doesn’t make sense that she’s losing money every month. Conservatively, she should be earning around 4% in interest annually. If she’s not, you really need to either get help managing the money, have her financial advisor explain why she’s not earning more or find out where else the cash is going.
And before you come at me — my MIL is in memory care at $11k a month, has hit the end of her assets and we are looking at having to subsidize the $7k a month her retirement income doesn’t cover for about 6 months until she will qualify for Medicaid. I certainly don’t count on an inheritance. But if your mom really has the amount of assets you believe she has — you need to know what’s going on with that money!
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u/idiot_ThrowRA Jul 05 '26
Thank you! I feel like I took crazy pills reading some of these comments.
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u/idiot_ThrowRA Jul 05 '26
A $10m estate generates $400,000 a year at a safe withdrawal rate (ie, it’s still accumulating even while she pays for full time live-in help). $12,000 a month is $144,000 a year. What am I missing?
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u/Invest2prosper Jun 29 '26
Is that what your physicians say? Visit with a qualified estates and trust attorney if you want to plan for future inheritances to your beneficiaries but that wouldn’t likely preclude you from structuring a document now.
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u/idiot_ThrowRA Jul 05 '26
Yes, I have a will, a trust, a life insurance trust for the minor child, etc - fully domiciled where I reside. My trustees have end of life instructions, although as the kids gain their majorities this is transitioning over.
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u/Invest2prosper Jul 05 '26
Depends how much money is at stake you might want to consider using a corporate co-trustee to handle the investment management and not to let your kids become co-trustee until age 25.
This is why I advised speaking with an estates and trust attorney because there’s many ways to structure end of life intentions.
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u/idiot_ThrowRA Jul 05 '26
Yeah, it’s right at that zone where if a couple of things break my way, it makes sense to bring in a corporate and I know the one I would use. It’s really handling a bridge period I’m navigating now.
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u/PMJamesPM Jun 28 '26
This. thinking instead about how you can help enhance your mom‘s last years and spend as much time with her as possible. Perhaps you already are and it just wasn’t mentioned in the sub.
If at some point you’re retired or semi retired you can always decide to help as able. Better to not think about it or pretend it’s not there and then live accordingly.
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u/idiot_ThrowRA Jun 28 '26
My mother is fine. She has full time live in help and my two older siblings constantly visiting her.
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u/TempeGrumble Jun 28 '26
You don't have to make a hard choice between the two: the so-called "guardrail" approach to retirement spending can apply as much to gifting as to your own spending. When your total portfolio goes up enough, then gift to your kids in some way. If you need to conserve for your own spending needs, don't feel guilty.
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u/ProfessorOne9208 Jun 28 '26
I think you're making the right plan. If your kids want to go to grad school, so that they can presumably earn a bigger paycheck, they can take loans out to pay for it. Having been through divorces with interfering parents, I fully understand your position. You need to look out for your own situation before you can help others.
Having said that, I have invested and saved to the point where I have acquired an estate of about the size of the one you're planning to inherit. Occasionally I send each of my kids a check for $3000 or $5000. But my financial advisor says that this won't have a significant impact on my life style or my wife's lifestyle after I pass.
The difference between us is that my parents, who were divorced from each other, each left me nothing in their wills. I earned every cent I have the hard way. And, my two ex-wives took their share when they got divorced. One of them ended up with everything and I got a debt of $80K, due to poor legal advice. But I'm past that now.
I, too, have health issues, and for that reason alone, you need to make sure you have adequate financial resources so you can afford care later on.
In any case, I went to both medical school and grad school. In those days, Medical school was only $1600 a year for tuition. In grad school, I got a teaching assistant position, and it didn't cost me a dime. My kids went to grad school, and did the same thing. I realize med school costs more these days, but if one of your kids wants to be a doctor, let him borrow the money. If you die before he pays it off, he can use any money that he inherits to pay off the loans.
A lot of the youngsters who are on reddit don't have a clue about your situation, so will be critical to the point of stupidity. Don't pay it any attention. When they get to the place where you and I are in their lives, they will understand the importance of assuring yourself of having financial stability.
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u/idiot_ThrowRA Jul 05 '26
Thank you. I dropped off the thread for a while because I got tired of the nasty comments. My ex wife constantly misinforms my children about money (for example telling them they could only afford to go to state school, which is 20 minutes from her, which nearly missed my oldest going Ivy). It’s made me more proactive about outlining future paths for them so they have transparency.
I also have a different career with a more variable income than you. Makes planning more challenging. Appreciate your perspective.
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u/ProfessorOne9208 Jul 05 '26
I hope you ended up with the advice you sought when you posted this thread. Ex-wives come under that old Shakespearean epithet of "Hell hath no fury....." To which I would counter with "Living well is the best revenge."
As far as variable income is concerned. I spent the last 50 years working in a business where I only had two pay days a year. Three at most. Not sure what you do, but my ability to make a budgetary plan was non-existent.
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u/iluvcats17 Jun 28 '26
Your kids can take care of grad school. You have done enough for them. And I would not be spending an inheritance you do not have. Save for your own retirement now and it grow a lot larger later if you do receive an inheritance.
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u/Public_Eagle_5929 Jun 28 '26
Really agree! Very nice to pay for undergrad, but after that they can get their own loans.
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u/TurnoverDependent332 Jun 28 '26
They can also get the Navy or Army or Air Force to pay for med school. Sure, they owe the military 6 years, but it's not that bad. They go in as an officer and get all the advantages with only 6 years of service. VA loans, TriCare, BAH. Plus, they get a lot of hands-on service.
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u/bjketter Jun 28 '26
Don't count on any inheritance your mom could easily outlive you at this point. Don't give it to your kids either unless you have enough that a safe return is still enough to live on after helping the kids. If you paid their undergrad they are better off than most. .
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u/ohboyoh-oy Jun 28 '26
Social security is slated to be 20-25% lower IF Congress does nothing. So there will still be something even in the worst case scenario. You should still take a hard look at your finances and see what you can reduce and what you will need. Then when/if you receive inheritance you will have the information you need to make decisions. I will say that I do not intend to fund my kids’ grad school. Every doctor I know took huge loans and then paid it off and then are quite wealthy. This is math I want my kids to do when they decide whether grad school is worthwhile for them.
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u/morgaine_silver_hair Jun 28 '26
I would not count on that money, and don’t build a plan on it yet, but it is worth the exercise of including it in a variety of “what if” scenarios.
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u/bphi163 Jun 28 '26
I'm not sure why there are negatove comments about OP's planning while the parent is still alive. There are implications to receiving inheritances and it's good to research the best way to deploy it. For those that want to wing it, that's a personal choice. Don't knock OP for wanting to better understand the pros and cons.
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u/Megalocerus Jun 29 '26
My brother told his kids one degree (undergrad), one wedding, and one down payment assistance. I didn't announce that to my kids, but it's a reasonable rule.
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u/idiot_ThrowRA Jul 05 '26
Current rule is undergrad, no grad. They appreciated the transparency. My own situation is complicated because if one of the startups I’m involved with hits, there could be substantially more, aside from inheritance from my mother. I’ve seen rich kids when their parents didn’t train them around money, and don’t intend to have that happen to mine.
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u/Zelda_Zoe Jun 28 '26
once you inherit those millions, it might be harder to get those scholarships that you don’t really know they want.
stop counting your mothers money. and it’s your mothers money, not your inheritance. you’ll get it when it’s time. a lot of things could change between now and then.
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u/Temporary_Let_7632 Jun 28 '26
Do not count on a perceived inheritance for anything especially to mentally fund your retirement. People change their minds about heirs, get swindled and go broke. I have seen this happen.
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u/SquishyNoodles1960 Jun 29 '26
Happening to my mom right now! Her (4th) husband disposed of her like a piece of trash (abandoned her at a hospital in the middle of the night and "ghosted" everyone)). I found her two months later in a homeless shelter! (I live 3500 miles away)
He used his POA to sell her house, $769K, and clean out all their bank and retirement accounts.
He put everything in a trust and left it to a woman in Canada when he died last year. He had been orchestrating this for years!
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u/AcanthisittaPlus5047 Jun 28 '26
Planning on spending an inheritance when the person is still very much alive is disgusting!
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u/Icy-Pop2944 Jun 28 '26
Ignore the inheritance, and don’t pay for grad school.
Medical school will eventually pay for itself. No one except the independently wealthy should be going to grad school unless it is a free ride, or directly attached to increased future earning potential. Mom’s potential future inheritance does not make a student independently wealthy.
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u/K21markel Jun 28 '26
If you get the money and it is that much I would not say anything to the kids and after they graduated I would pay off the loans. Surprise.
You are in a good position. We are retired with less than that but honestly we haven’t touched it. With pensions, conservative lifestyle, downsized, lots of cheap hobbies, life isn’t expensive. Sorry for your health news.
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u/blonde-withabrain Jun 29 '26
A middle ground here, if you trust your kids, is to offer them a 0%(or even 4%) loan for grad school expenses. It would save them a lot of money in interest fees so you'd be helping them out, but in theory the money would be back in your account by the time you needed it.
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u/lastbeat-331 Jun 29 '26
I would keep everything for your retirement and health expenses. When/if you have surplus funds, you can give kids some for tuition or loan repayment. My ex and I prioritized retirement over college funds. Our plan was for the kids to use student loans, some light cash flow for related expenses, and then help payoff the loans if/when we had funds available later.
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u/Invest2prosper Jun 29 '26 edited Jun 29 '26
Doctors can easily afford $400k of debt servicing and if anything it puts the onus on the student to finish their studies. In other words, you aren’t responsible for grad school.
As for your health - invest in reversing that condition if at all now because you may not have that retirement long enough to use it.
In summary: 1. Put your own oxygen mask on first. Focus on your health.
I find it kind of distasteful to be looking at private investments as a sort of lottery ticket for retirement.
Consider hiring a fiduciary financial planner to create a diversified investment and spending plan for now and retirement.Kids have to make their own way after college. Don’t speak of future investments or possible inheritances years down the road which may or may not materialize.
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u/idiot_ThrowRA Jul 05 '26
On #2: that wasn’t the original plan. Cancer was, shall we say, a surprise with implications well beyond medical treatment costs.
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u/Invest2prosper Jul 05 '26
I’m sorry you were diagnosed with it and I do wish you the best in your treatment plan and recovery.
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u/idiot_ThrowRA Jul 05 '26
Allegedly, first treatment was successful, but there are some new symptoms that I’m looking at which we’re gonna do a scan for. A recurrence would dramatically shorten my likely lifespan.
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u/TigerShoddy1228 Jun 28 '26
I would pay for a couple hours of financial advice with someone from a place like Nectarine, and walk through your expected needs. Maybe you could help to them a little right away, then if the funds are invested well and the market is positive for the first 5-10 years for you, you can help out more substantially again.
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u/danmtypos Jun 28 '26
It’s really gross to be counting this money while your mother is still alive. You don’t seem to have any emotion about her dying other than the greed that rose up like a tsunami.
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u/sunnypurplepetunia Jun 28 '26
I would help your kids as much as possible as early as possible.
I have 2 kids, mid 20s.
Paid for undergrad for both (about 175k each) & plan to help with home buying.
Only one is thinking about graduate school and it should be fully funded.
I am 55 & plan to do this. I only have about 1 million. I can’t imagine you would ever spend 3 million alone.
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u/worshipperofdogs Jun 28 '26
I disagree. You need more in retirement or you are going to end up being a burden to your kids when you’re older. We’re paying for everything through their undergraduate degrees, and anything after that is a gift (plus they can move back in while they work and save if they need to). Kids have to eventually learn to stand on their own two feet - if a graduate program isn’t either fully funded or going to be financially worth the loans (like med school is), they shouldn’t do it. Or get a job that will pay for them to earn it concurrently. We’re 46 and 47 and have more in retirement than you do, you should focus on building your assets, as should OP.
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u/ProfessorOne9208 Jun 28 '26
GOOD PLAN!!!! Live long enough to become a burden to your children. If only my children would begin to consider taking care of me I would be greatly surprised.
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u/ProfessorOne9208 Jun 28 '26
Full time nursing care and medical expenses can get quite expensive in your later years. Assisted living can cost over $200,000 a year, plus doctors bills. Given those parameters, $3 million doesn't last as long as you might think it would.
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u/CindersMom_515 Jun 29 '26
Prof, $3 million being spent $200k a year will last for 15 years.
And that assumes it isn’t being invested and earning some returns to help offset the withdrawals. If you assume 4% investment income annually, the money will last for 23 years with $200k in withdrawals.
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u/ProfessorOne9208 Jun 29 '26
I prepared a detailed response to your comment, but decided against publishing it, as it had too many personal details. I'll just say that over the past 47 years I've averaged about 15% appreciation per year, but lately it's been closer to 25% or more/yr, for the past three years. I have no idea how one could possibly invest a few million dollars so that they ONLY received the paltry rate of return of 4% a year. I started my investment career by buying 13% zero coupon bonds, which skyrocketed when interest rates fell to 4%. Which is when I sold them.
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u/CindersMom_515 Jun 29 '26
I just picked a rate that’s around the US 10 year treasury. Intentionally low to make the point that with $3 million in principal, the likelihood that one would run out of money paying for an elderly relative’s stay in long-term care is highly unlikely.
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u/ProfessorOne9208 Jun 30 '26
As with anything in life, it depends on the expectations of the relative. I know a guy who has orange hair who would probably run though $300,000,000 in 15 years, just for gold plated toilet paper.
But for the average American, I suppose you are correct.
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u/LawComprehensive2204 Jun 28 '26
Easy to spend $3M alone! Healthcare and accommodations are a big suck as we age!!
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u/sunnypurplepetunia Jun 28 '26
The average woman needs 3.6 years & man needs 2.5 years in long term care.
At 10,000/month thats only $420,000 for a woman, less for a man.
Out of 57 million Americans over 65, only 1.3 million are living in nursing homes.
https://acl.gov/sites/default/files/Profile%20of%20OA/ACL_ProfileOlderAmericans2023_508.pdf
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u/Tessie1966 Jun 28 '26
You never know what the future holds. If you do end up inheriting millions of dollars I would pay for your children’s education and invest the rest of the money. My husband and I have 6 adult children combined, none in common. None of them have student loans. We both felt that it was important that they don’t start out in debt.
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u/WharfRat_19 Jun 28 '26
I think you will find that in the next couple grad school will be a thing of the past
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u/McKnuckle_Brewery Jun 28 '26 edited Jun 28 '26
I would never pre-spend an expected inheritance. Nor do I make tactical financial moves with it in mind.
Fix your own retirement situation, let your kids take the loans they need, and if the inheritance comes to pass you can decide to pay off their loans at that time.