The Takeaway: Inheritance Wake-up Call for Boomers (That Windfall Isn’t Coming)

Whither boomer’s inheritances? Not coming, perhaps. “The post-war generation is living longer and increasingly using their savings to live out their retirement,” the Wall Street Journal notes. Which could mean many boomers are in for an unpleasant wake-up call soon.

There are way too many adult children I see who are looking at mom and dad’s estate as their ticket to a secure retirement,” M. Holly Isdale, an estate planner in Bryn Mawr, Pa., told WSJ. “But with people living longer, much of the money is likely to be spent.”

A few inheritance stats:

  • From 2006 to 2010, falling asset values reduced projected inheritances for boomers an estimated 13 percent, according to Boston College’s Center for Retirement Research Stock.
  • Affluent families are also scaling back on inheritances. Among those with $250,000 or more in investable assets, only 41 percent said preserving inheritances was a top concern, according to a recent Merrill Lynch survey. That’s down from 54 percent in 2009.
  • Boomers and their kids could still inherit $27 trillion over the next four decades, according to the Center on Wealth and Philanthropy at Boston College. But much of this will be transferred between the already wealthy.

So: Expected inheritances may vanish. Boomers could also end up spending their own savings to help pay for elderly parents’ care.

Nancy Becker, profiled in the journal article, said her parents were diligent savers and owned a house a Vermont. “But they didn’t imagine living well into their 90s,” 63-year-old Becker said. Though she and siblings inherited a house in Vermont, they spent more than the property is worth to help pay for their mom’s care in her final years (she died at 97 last year).

Now, as Becker’s in-laws enter their 90s, she worries that “their money is running out, too.”

Although many adult children are hesitant to bring up the subject with parents, financial advisers say it is important for families to talk about financial matters, to at least establish realistic expectations.

Thursday Quick Hits: 

  • Are Medicaid fraud audits worth it? A government program to fight Medicaid fraud cost at least $102 million in auditing fees since 2008, while recovering less than $20 million in fraudulent payments, investigators found.

Photo:  Imagewerks/Getty Images

gs36103857 5pts

Yes, inheritances are lower and lower... year after year, it is true.  For all the reasons Miss Brown presents -- and also because frequently  the liquid assets in our parents' estate has been spent on medical issues/bills, or simply on living to a ripe old age.  Less and less people our age (Boomer age) are lucky enough to be inheriting a decent sized liquid estate or trust, and often only inherit a house, usually free & clear.... Many heirs our age find themselves needing cash if there are no liquid assets in their inheritance, which is indeed often the case these days.  I inherited some property in upstate New York, but needed cash right away for a variety of reasons.  Since probate can take 10, 15, 18 months or longer, I went back and forth with my wife about calling one of the niche financial firms that loan advance funds on an inheritance... either a probate loan or a trust cash advance. We looked at plenty, and I would only recommend a few with conviction -- such as, or or -- we needed to settle on a reliable, trustworthy firm that specializes in inheritance loans, or probate advances. These firms were in biz for 20+ years;  had no upfront fees, had to be paid back only when probate closed.  We made darn sure they had no hidden fees or monthly payments at high interest.  Technically, these inheritance loans are non-interest inheritance advance "assignments", not credit based loans.  Sometimes it's better to pay a reasonable fee and get a large portion of your inheritance right away, in 2 or 3 days, than wait maybe for a year for inheritance funding when probate finally closes.  Hopefully you won't need it as we did, but an inheritance loan, or probate loan to be exact, came in real handy.  Passing it along should any of you ever need an inheritance advance such as we did,  for whatever reasons.