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March 28, 2006
Baby Boomers Fear Small Inheritances
In Empty Nest Eggs: Inherit the Wind; There's Little Else Left, NY Times, March 26, 2006, Eduardo Porter reports that:
As the baby boomers deal with the final days of their aged parents, a question often lurks, sometimes unspoken, in the pragmatic discussions about nursing homes, retirement savings, the future of the family house: After all the living is done, will anything be left over for an inheritance?
After all, the evidence shows that baby boomers are going to need it: working Americans are unprepared for their own retirement, economists say. They have little savings of their own, and are facing the possible erosion of Social Security and the limits of company pensions.
Parents often rely on their children for assistance in making a wide variety of financial and health care decisions. Parents seem to have a "special trust" for advice from their children. The reality is, however, that many children will "lead" their parents to make decisions which they think will increase the likelihood of a larger windfall upon the death of the parents.
Attorneys and others involved in the estate planning field needs to recognize that a child's self-interest may play a significant part in the advice he or she provides a parent.
March 28, 2006 in Estate Planning - Generally | Permalink
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Comments
More junk sociology from the NYT. It is true that most elderly people do not have very much. It is also true that a trip to the nursing home will break them if they weren't broke before. But those facts do not mean that wealth will not be transfered to the next generation. often informally, or even in the dark of the moon.
Medicare regulations are a trap for many middle class Americans. They will avoid the trap by transferring property outside the lookback period. Houses will be titled in children's names, while the seniors still live there.
Tangible property will be transfered willy nilly outside probate. I have given my children cars, although not title. We have a basement full of furniture inherited from our parents. They are not antiques, and their market value is minimal compared with their use value, but they are serviceable and will relieve the financial pressure on a young couple starting out.
Parents can also pay for things from family vacations to graduate school tuition to a weeks worth of groceries.
There will be an interesting study when someone can figure out how to measure all of those factors and the one's not mentioned.
Posted by: Robert Schwartz | Mar 29, 2006 12:27:50 AM
