Circumstances change, decisions are made and the best made plans don’t always work out the way you thought they might. When it comes to distributing your assets, communicating your intentions and discussing them well in advance may be the best gift you can give your loved ones.
The Washington Post’s article, “Think now about what you will leave behind,” notes that a study by Accenture estimates that more than $12 trillion in assets are being shifted from those born in the 1920s and 1930s to baby boomers. Then in the next several decades, about $30 trillion of wealth will be transferred by baby boomers to their heirs.
“At the peak, between 2031 and 2045, 10 percent of total wealth in the United States will be changing hands every five years,” the Accenture report said.
How that money is distributed will matter. Consider long-term care insurance, a significant expense. Some adult children don’t want to spend the money their parents saved because they might be criticized by other heirs about reducing their inheritance. In many cases it’s the adult daughter who holds a full-time job and would take care of her mother before work and after. But soon she needs some help. And even though mom has money to pay for long-term care, the daughter’s hesitant to spend it because her out-of-state siblings give her grief about the cost.
Frequently family members who are the caretakers are given little or no consideration for the time they spend providing care. The estate’s split up evenly, which can be a source of resentment. Try to avoid estate battles. An elder law attorney can draw up a family agreement in advance regarding who will be responsible for care and what they’ll be paid. They will be paid for their time and effort during their service, or if that’s not an option, they’ll receive compensation in the estate plan.
Inheritances don’t occur in a vacuum. If an adult child or children are completely left out of your will, your decision will hurt their feelings and lead to stress and conflict within the family. Yes, it’s your money, but it’s also your family. Do you want your legacy to be litigation and estrangement? Consider discussing these issues with an experienced estate planning attorney, who has seen and heard more than a few families with challenges. Their guidance and good communication with family members may go a long way in preventing an estate battle.
Reference: The Washington Post (October 8, 2016) “Think now about what you will leave behind”