Many baby boomers are counting on their parents to leave them an inheritance to pay off the mortgage, college bills or other finances. But with parents living longer, health care costs escalating and the market doing poorly, will the money be there?
The Wall Street Journal had some great tips this week when it comes to counting on an inheritance.
Here’s are a few of the tips from the June 11, 2012 edition:
1) Talk about finances with your parents. Many adult children are reluctant to have conversations about money with their parents. In my experience, it helps to bring up finances and ask about their plans. While this may create tension, not all parents have thought about long-term care plans. Having conversations regarding their wishes, plans and ways to pay for care is beneficial for everyone.
2) If your parents are running short of funds, consider these options: a) Pay their health premiums b) Purchase a long-term care policy c) Give your parents a monthly allowance to help cover costs. In the long run, this could provide for future care and save costs.
3) Talk with your siblings about expectations. Siblings may differ in terms of expectations for care, the way money will be divided and how assets will be handled. Talking it through now saves a lot of potential grief later.
4) Write it down. While your parents are alive, write down their wishes. A living trust is a good way to keep things up to date.
5) Remember, this is your parents’ money. You or your siblings did not work for this money so honor their decisions. You may not agree with everything they want to do, but respect their wishes.