Baby Boomers: Learning Lessons in Estate Planning from Their Parents
While many baby boomers have made alarmingly few plans for retirement, others are immersed in a kind of geriatric boot camp as they help their parents navigate their final years. One adviser recommends using your parents’ experience as a training manual: Healthcare considerations, life insurance, Living Trusts and funerals are the building blocks of end-of-life planning.
Learning the hard way: A Living Trust means that your family will avoid Probate
The long-term implications of not having a Living Trust are significant. Without a Trust, your estate will need to go through the expensive and time-consuming Probate process. Baby boomers who have been left to Probate their parents’ estates have vowed to leave their own children better prepared.
Something to think about: Prepaid funerals or burial expenses
While the estate can be used to pay for funeral expenses, you will need liquid assets to pay for funeral expenses. If a parent has been in hospice, nursing care or assisted living for the last few months of his/her life, there likely will be bills from a wide range of healthcare providers that will need to be paid.
It’s not unusual that assets are tied up in Probate or otherwise inaccessible. Not all baby boomers can front the money needed to pay for their parent’s burial expenses and the inevitable healthcare bills that trickle in. As part of long-term planning, many families set aside money or prepay for at least a portion of these inevitable expenses.
Planning for health complications
Many seniors look forward to their retirement as time to pursue second careers, volunteer, travel and enjoy their friends and families. Unfortunately, unexpected health issues and their related costs can completely derail plans for a blissful retirement.
Boomers learn from their parents that health care is an important part of retirement planning
An estimated 70% of Americans can expect to use some form of long-term care at some time in their lives.
Statistics for 2018 show that 5.7 million Americans are living with some form of dementia.
More alarming, 200,000 people under the age 65 have early-onset Alzheimer’s. At this time, there is no treatment or cure for this insidious disease.
Escalating insurance costs
Today’s medical advances mean that we can make smarter decisions about our healthcare needs. We’re living longer, but depending on our health, that may not mean that we’re living better. If life or disability insurance is part of your plan, it’s important to know that rates increase as you get older. Many life insurance policies bundle long-term care into their plans. Researching family history for heart disease, diabetes, dementia, cancer or other hereditary illnesses may help you make informed healthcare decisions.
Learning from our parents: Plan for the worst and hope for the best
Don’t wait until there is a crisis; figure this out while you’re healthy and able to make thoughtful, informed decisions. Everyone who’s had to cope with the loss of a parent knows the importance of careful estate planning and the benefits to surviving family members. Baby boomers whose own parents have left them with a poorly planned estate are learning from this experience and leaving their own families better prepared.