Friday, March 16, 2012
As medical advances are keeping older loved ones alive longer, they are using more money on care and have less to pass on. Children are sometimes stuck paying for parent’s medical care too, draining their money as well. As people are living longer and families are becoming more complex, more communication is needed about estate planning. These complications with inheritance can cause family fights. Despite these concerns, over $20 trillion is set to be transferred to heirs in the next 50 years as boomers pass away.
The number of centenarians is growing, but half of those who live beyond 85 end up with Alzheimer’s disease, which is costly to care for and erodes assets. Proper planning is necessary to prevent running out of money. More complications arise as well because children who take care of their parents expect that they would inherit more than siblings who didn’t care for the parents. Most parents distribute assets evenly amongst children despite who cares for them more.
The complex families that result from the high rate of divorces and new marriages complicates planning because some people don’t want to share or help blended family. This makes planning more important so that people can clearly dictate what they would like to be done with their assets.
Some people are left with inheritances that are more trouble than they’re worth, but they still feel obligated to carry out the wishes of the deceased. It is best to discuss what will be done with your assts while you’re still living because it is not a matter of if you will die, it is a matter of when.
Early planning, good communication, and being mindful of the fact that many are receiving the fruits of their older relatives’ labor while they are still living are the main things that can be done to help avoid the complications discussed above.
See Haya El Nasser, With More Blended Families, Estate Planning Gets Ugly, USAToday, Mar. 15, 2012.