As recent article in the Star Tribune put it, all but the wealthiest of us have moved from an "inheritance" society to "let's make sure Mom and Dad have enough to live out their lives scenario."
Ten years ago Americans expected more inheritance from their parents than they do now. Longevity has generated the need for more retirement money which in turn has led to a decrease in the total assets left to others. In addition, our New York estate planning attorneys know that the recent economic crisis has exacerbated the situion, trimming nest eggs and making it hard for many to cover their elevated health care costs and other financial obligations.
All of these issues were recently touched on in the StarTribune article. It noted that for those who reach age 65, 40% of the men and 53% of the women will live to at least 85. Since most of their income derives from Social Security, it creates a situation where they seek support from their children instead of living off a nest egg to pass on to those children.
Estate planning obviously takes these challenges into account.
On the one hand, it is hard for the older generation to discuss such financial matters with their families; they may be afraid to disappoint their children and want to take care of themselves. On the other hand, younger generation might also find it hard to express their concerns about their parents' financial situation.
But there are subtle ways to discuss the issue, such as asking whether parents have a living will or how they would like things to be handled if they get sick, rather than abruptly asking how much money they have. However tough it might be, for those willing and able to support their parents, raising the issue always eases up the state of things.
This also opens the door for discussion of other elder law estate planning questions, like insurance options. For the past generations, long-term care insurance was relatively unused, but for the Boomers it is a different story. Figuring out how one will receive long-term care is critical for those whose life expectancies continues to increase. In addition, most people today marry at an older age and have children when they are older.
Now more than ever it is important for people to have a retirement plan and to begin their estate planning as early as possible.
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