According to experts, longevity and other changes that the modern world has brought to families are causing an increase in feuds among family members when it comes time to engage in estate planning. With changes in family dynamics and loved ones living longer, some potential heirs expecting an inheritance are in for a rude awakening.
Longevity’s Deleterious Effect on Life Savings
Due to medical care advances, Americans who are 65 years of age and over now represent 13 percent of the population-40 million-and are living longer than ever. According to the 2010 census, the fastest growing group is seniors aged between 85 and 94. By 2050, it is estimated that this age group will make up 20 percent of the population.
As seniors age, most of their savings are used to pay for retirement living expenses and health care. Adult children often mistakenly believe that government benefits such as Medicare will cover most medical bills. Because of this, few people today have enough money to leave an inheritance to the next generation.
Changes to Family Structure
In today’s world, more than half of first marriages end in divorce and 75 percent of divorced people remarry. This has led to an increase in blended families, with 65 percent of families including children from a prior marriage.
As new family members are added, tensions can increase when it is time to do estate planning. While putting together the estate plan, family members must struggle with difficult questions such as to what extent step relatives should be provided for in the will. This can cause resentment among blood relatives, as they may feel entitled to receive a greater share of the estate than their recently added step relatives.
Unfortunately, there are no easy solutions to resolve the family disputes. However, experts strongly recommend that parents talk with their heirs about the estate plan when the parents are still living and address any conflicts between potential heirs.
Parents should encourage their heirs to work out any disputes among themselves, but offer a solution only when the heirs cannot resolve the dispute. By letting their heirs know of their wishes and reasoning behind the estate plan, parents can address hurt feelings and resentment before they die and make any changes to their plan to correct any unforeseen problems or issues.
Source: “With more blended families, estate planning gets ugly,” USA Today, 3/14/12