The first wave of the Baby Boomer generation has only recently reached the traditional retirement age of 65. Their parents, the generation that was steeled by the Great Depression and fought in World War II and Korea, are in their 80s and 90s. Each generation has faced its particular obstacles, but they are united in the challenge they currently confront: how to create an effective estate plan.
Parents of Boomers have benefitted from remarkable advances in medical technology. They are living longer than any prior generation. In fact, there has been a 30 percent rise in the number of people aged 85 to 94 during the past 10 years. But longevity does not come free. Many elderly people owe their additional years to new treatments, medicines and surgeries. Healthcare costs are steep, and some seniors are finding that they have little wealth to pass on to the next generation.
Boomers potentially stand to inherit less, but they have additional problems. Divorce and remarriage rates are high, and a number of Boomers have children and stepchildren from multiple marriages, which can significantly complicate wills. According to the Pew Research Center, the number of adults who have one or more stepbrothers or stepsisters exceeds 40 percent.
These issues can create difficult decisions when it comes time to draft an estate plan. While seniors are confronting how to protect their assets, Boomers must tackle how they want to divide assets among their potential heirs. Some parents may want to provide only for their natural children in their wills. One remarried man in particular expressed concern that if he died without tailoring his will to benefit his biological children, his property could bypass them and end up entirely in the hands of his wife and his stepchildren.
Sitting down with your family and discussing how you want to distribute your estate can be uncomfortable in such situations. But a well-crafted estate plan can ensure that your property is parceled out according to your wishes.
Source: USA Today, "With more blended families, estate planning gets ugly," Haya El Nasser, Mar. 14, 2012.