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HAVE YOU HEARD THE parable of the white elephant? In southeast Asia, possessing a white elephant was symbolic of power and prestige. It was a good omen to find one in the wild, signifying peace and prosperity for the kingdom. They were considered sacred and could not be used in war or for labor. To receive a white elephant from the king was a great honor. Who would turn down such a special and unique gift?
Problem is, a white elephant could be a great burden. Feeding and housing an elephant that doesn’t produce anything can be costly. Even though it was seen as a great honor to be rewarded with one, a white elephant was also an ongoing financial curse.
My family tried to give me a white elephant.
My extended family owns a property in Upstate New York, along the St. Lawrence River. It was bought by my great grandfather in 1910, and was the family’s vacation home when my mother was growing up. Now that she’s retired, my mother likes to spend most of her summers there. We call it the river house, it’s absolutely gorgeous and I love to visit once a year.
But because it’s been in the family for so long, the place needs constant repairs. The appliances are decades old, there’s no air conditioning and, in any case, I don’t think the electrical panel could handle it. The house needs painting, floor replacement, and linseed oil applications on the wood paneling. There are costs associated with maintaining the old boathouse and the crumbling wooden dock, which—thanks to climate change—now needs to be raised once again or, alternatively, torn down and rebuilt.
My extended family has a small boat, but only some of us use it. In fact, the family has grown so large that we can’t all fit in the boat, so now we often rent a larger one. During the winter, we pay to store the small boat and for someone to check on the house when the river freezes over. Every year, we make repairs and improvements. But what the place really needs is an expensive makeover that my parents, aunts and uncles can’t afford.
For years, my mother has asked if one day I wanted to take over my parents’ share of the river house. She’d nudge me to say “yes” with beautiful pictures of the river. But I kept telling her it would become my white elephant, more of a financial burden than a gift.
I live in Philadelphia, so it takes six-plus hours to drive there, and I only go once a year and stay for perhaps a week. Even if I decided to take ownership of the place, thus keeping the house in the family and preserving that part of our history, I wouldn’t use it more than I do now. There are many other things I’d rather be spending my money on. I don’t want to worry year after year about repairing something that broke 340 miles away and which I hardly ever use.
Even if I did use the river house more, that would be where most of my money would go. My wife and I wouldn’t have the wherewithal or time to vacation elsewhere, and we wouldn’t be able to do the things we currently love doing. Right now, my young daughters are more into visiting playgrounds, restaurants and theme parks than observing natural beauty.
I’m hardly the only one who’s faced this sort of dilemma. Other white elephants include family heirlooms, rental properties and complex financial accounts passed down to the next generation. It might sound better to have these things than not have them. But in the end, it’s best if the beneficiaries actually want and understand these things. If the only reason they decide to accept such gifts is to make their family happy, these items will steal part of their freedom, financially and otherwise.
My advice: Don’t foist white elephants onto future generations.
Let them decide what they want to keep, not what you want them to have. You may have very different goals and desires than they do. Let them guide your decisions, so you reduce the complexity in their life, rather than adding to it.
My mother has come to understand that my brothers and I couldn’t afford the amount of work that the river house needs. She understands we’d be making big sacrifices to maintain this old house—a house we don’t love as much as she does. It’s been hard for her to accept this, but it’s the truth.
The good news is, we plan to continue visiting the river, even after we eventually sell the house. But this time, we’ll do so because we want to, and not because there’s something to repair. And, yes, we’ll be renting.
Charlie Schafer is an aerospace engineer with an interest in personal finance and investing. His other hobbies include reading widely and homebrewing beer. Charlie lives with his wife and two children in South Philadelphia. Check out his earlier articles.
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Liked the article with some real good points about just moving on from possessions, rather than continuing to lug them along for generations. Though, the seemingly obligatory reference to climate change is pointless here, changing weather is going to take a toll on anything exposed outside.
Can we just take a moment to be grateful for the “problem” discussed here. Remember that there are many folks that cannot afford a house to live in… let alone one to vacation in/be burdened by! Especially in expensive real estate markets.
I think the house was an example as the discussion also talked about coins and stamps and just about anything left to others.
I was on the inheriting end and will be on the passing on side.
My parent owned a vacation home on a lake. It was their pride and joy, and they also bought the lot next door that held a “seasonal shack.” My mother, who was the surviving spouse, intended to leave both to my brother and myself. I told her I didn’t think that was a great idea. My sister-in-law are very different and “sharing” would never work. She left my brother the nice place (he sold it within months of settling the estate), and I got the shack plus my parents’ permanent house. My husband and I sold the house and used the proceeds to build a vacation home on the lake property that met the needs of our family. That was about 25 years ago, and the place has served us well — especially during the Covid years.
Now, we face passing the lake house on. The most recent iteration of our wills leave the place equally to our kids. They are professionals with good incomes, but they live 600 and 800 miles from the property. The house has been well-maintained (I just wrote a sizeable check to the local contractor yesterday.) But what happens in the future? Like much else these days, I don’t have a clue!
What do your kids say about this, in discussions with them?
My wife and I are in a slightly different situation, but close-enough to it, to where we have ongoing talks with each of them. Now in our 70s, with them from mid-30s to early 40s, the talks are ongoing, still hypothetical, and yet it seems clear to each of them that the situation may become non-hypothetical at any moment, This makes the issue worth their individual and collective views of it.
Fingers are crossed, of course.
Regards,
(($; -)}™
Gozo
I’m the person at my library responsible for responding to offers to donate books and dealing with gift books dropped off at desk. I decline most offers, because we have limited shelf space and even more limited staffing to sort through gifts. We also have statistics showing that in most subjects, older books are rarely used. But if you have any Southwest Asian literature, in English, Arabic, Punjabi, Farsi, etc, I’d be happy to take it.
I keep my personal book collection to four bookcases. I take an armload of books to our local senior center every month, because they are always delighted to have recent books for their swap shelf.
I had a formerly valuable, large collection of technical books related to my occupation. A friend who retired 2 years before me, complained that he couldn’t find anyone who wanted his technical books. Darn that internet lol.
I donated mine to the local library. I hope they found a use for them, but I admit I may have put the burden of disposal on them.
As for fictional books, I gift them to friends and family (the readers amongst them) as soon as I finish them. In turn they gift me with their books. It saves all of us a little money and it frees up storage space.
I do keep a few special books, to death do us part. But my next of kin will only have a small collection to deal with.
Old family pictures that are framed seem to fall in the bucket of “white elephants”. We don’t have the space to hang them and don’t want to look at them all of the time anyway. We have inherited many of these and I finally decided to take then out of their frames and put them in a few binders.
It does not cost much to store the framed photographs but what is the point of having boxes of pictures that no one ever looks at. Also, we are starting to downsize and these pictures are a big part of our excessive stuff!
Second homes, like boats RV’s and horses, are notorius time and money pits. The idea is seductive, but the reality is inevitably grimmer. Unless you are lucky enough to have enough wealth and “people” who can do the work for you, I’d take a hard pass. As I have told my wife for years, I’d rather stay in a nice hotel where I am likely to find a mint on my pillow each evening!
When we had visitors come to our vacation home from Europe, I put a mint on their pillows. 😃
Most white elephants are bequeathed to people all by themselves. As an example, I nearly bought a beautiful cabin on a nearby lake (complete with gravel beach and cherry orchard).
but then I started to notice that co-workers who had cabins ‘on the lake’ would return to work on Monday grumbling about spending a weekend at the lake fixing docks, roofs, plumbing, water heaters, electrical damage from squirrels, etc. etc.
I’m forever thankful I passed on the opportunity and didn’t tie myself down to that self-endowed white elephant. Instead we went wherever we wanted on weekends, occasionally renting and then walking away from a lake cabin.
I think the same might apply to many shiny objects – RVs, boats, second homes and so on.
An acquaintance purchased a huge RV and was looking forward to ‘the good life’ on the road. I summed up the cost of purchase, gas, storage, maintenance (also dozens of items to maintain like AC, refrigeration, water heater, generators), insurance and stress and decided that the total cost of RV ownership would pay for multiple flights a year to a 5-star resort including 5-star dining and car rental for years and years. Maybe a lifetime. Just being a grumpy old guy, I guess. No regrets!
Unless a person enjoys that work around the house stuff or can pay for it to be done inside and out, a second property is just a burden.
I wouldn’t describe our vacation home as a white elephant as it has been maintained and upgraded over the years and has significant value. However, the same issue exists, which of our children, if any, will want to keep it.
The house means a great deal to me, but not as much to our children as it is 5 hours away from all of us.
We put the house in a trust with the stipulation that if one or more want to keep it they will buy the others out at 1/4 of the current value. The payment will be taken from the cash portion of their inheritance so no extra money required for the transaction.
In addition, we set aside $100,000 adjusted each year for inflation, to be used for taxes, maintenance etc. by those or the one who decide to keep the house.
Just to be sure all goes well, I think I will have my ashes scattered on the property to keep an eye on things. Perhaps a grand child will want it.😎
Thanks Rich you’ve done what you can. I have some rentals in trust with me as executor. My two sons will be co executors after me and can figure it out for themselves. I think they’re smart enough and if not, they will have to learn about working together.
Of course real estate isn’t for everybody as there certainly are challenges. I’ve learned that having a good manager is very rewarding in the satisfaction department!
My sons know I want any organs of mine to be donated, if someone can use them! HA. The rest of me is to go to science, med schools or what ever, I won’t even know it and may help out folks.
Another downside of white elephants is the harm they can generate between family members. One wants to keep it, another does not, wants to sell, etc.
Even your generous offer “We put the house in a trust with the stipulation that if one or more want to keep it they will buy the others out at 1/4 of the current value.” has the seeds of disagreement. What if two want to own the house outright? People get weird when it comes to money and assets. A side of them you never new existed suddenly appears (and/or their spouses). Many well meaning parents have sowed the seeds of discontent that will last for decades by not dealing with inheritance issues up front, explaining to family their intentions. They may still be unhappy, but at least they will be unhappy with you and not their siblings.
I believe that your skeptical view is shared by just about everybody! In my wife’s and my case, we just figure we’re doing the best that we can, with as much ongoing consult with the future victims (AKA our adult kids), and as with anything else related to parenting, you can only do so much.
Fingers crossed, for all of us older persons!
Regards,
(($; -)}™
Gozo
Say the house is worth $1,000,000 and two want it and two don’t. Each gives up $250,000 of inheritance and the other two get that as payment for their share of the house.
You do have good points though. You never know and indeed spouses are a factor.
Charlie, thanks for an interesting and informative article. It’s good to get the viewpoint of one who stands to inherit a vacation property. The same goes with rental properties. These may be valuable, but not hold the same allure or value to successive generations.
I have friends and acquaintances with “second” or sometimes even “third” homes.
Occasionally they do the “rent it out” but mostly they let family and friends (that’s us) use the property.
Personally, we downsized from a house where we were responsible for all the outdoor maintenance. And bought a condominium where the Homeowners Association is the responsible party.
For which we pay a monthly assessment.
As far as I’m concerned It’s been agreat deal. All it costs us is money. We get to spend the extra time and effort we have on things that are much more enjoyable.
Like spoiling our Grandchildren.
Every year around Christmas, there are “white elephant” gift exchanges at Christmas parties we go to where joke gifts are wrapped nicely and then there is some procedure to pick (or steal) gifts until everyone has one and opens it. I am not sure if this is the same usage of the term “white elephant” or not since these are usually joke gifts but it seems similar. (Something on the face of it that might be treasured but is in actuality a boondoggle.)
This is such a familiar story, Charlie. And thanks for your good advice about not burdening the next generation. On a much smaller scale, I inherited a coin collection assembled by my father-in-law. No one in my family collects coins. One of my kids suggested I make an inventory, then get estimates of its value and sell it. That’s at the top of my to-do list and it will be a relief to carry it out of the house one last time (it’s been lugged along with me on five moves since my father-in-law passed over 20 years ago).
Your kid is a smart one. When we downsized we sold off my portion of my Dad’s coin collection. It was worth considerably more than I had imagined.
Years ago, I liquidated my wife’s grandfather’s coin collection for grandma. As a coin collector from back in the day, I had a ball. Too bad no one in your family is a numismatist. There are a lot of potential pitfalls when selling coins.
The same goes with stamps. Have a collection to sell? Don’t expect even to get the face value of uncancelled stamps unless you have something really valuable. And every stamp that is not a “forever” stamp keeps going down in relative value. You are better off figuring out which particular stamps have sentimental or emotional value to you and yours, and then distributing the rest of the stamps to relatives to use on their mail, the sooner the better.
I have my paternal grandfather’s extensive but not especially valuable stamp collection. It’s been my burden since his death in 1988….
See my note just above to Nuke Ken. It took a while to realize the unfortunate reality of an inherited collection. But I’ve found people like to get mail with old or unusual stamps (if they even notice it…)
… and I have my father’s extensive (and not valuable) stamp collection from 2009 as well. Sigh.
My first wife’s mom and aunt inherited an idyllic but high maintenance cabin from their father. Their issues were much like yours with the additional challenge of multiple family ownership. Mom and Aunt Jane wisely sold the cabin before their deaths. The happy ending is that it was sold to the best friend of one of the cousins who allows the family to use it at will.
Ah, now I really get the term “white elephant sale,” thanks.
I am currently sharing costs on a small logging cabin my grandfather bought in the 1940s, on a northern lake far from where I live. Maintenance and taxes go up every year. The families of the five kids of my long-gone grandparents have divided the summer visits into three weeks each. After my father died, I realized that I’m basically paying for a timeshare that I rarely visit.
My brother loves and uses the cabin frequently, and I have tried to get him to buy out my share, but he rightly says he doesn’t need another share of something he already owns with no group plans to sell. We four siblings finally instituted an Airbnb “pay for stay”-type system, dividing each year’s costs over 21 nights, which helps a bit (we carry one of my sisters since she can’t afford to pay). But hanging over us is the knowledge that we will always need to cover our family’s share of growing costs whether or not my siblings use all three weeks.
My grandfather and father bequeathed a gift, but for me it’s a white elephant.
A nice reminder that it is okay to be practical about things and make decisions based on reality, not just emotion!