This is the final part of an interesting article from the Wall Street Journal. Bottom line is that we all need to save and plan on getting no inheritance and then if we do, that’s a bonus. We also need to think of what will happen if our parents outlive their money and we need to pitch in. Some definite interesting ideas to consider. Read on and learn something.
Part 3
Measures to Take
If parents anticipate running short of money—and if they and adult children are able to start a dialogue—there are several steps families should consider, financial planners say. Among them: Have parents recalibrate their budgets, downsize to a smaller residence, buy an annuity or longevity insurance to lock in a life-long income, or take out a reverse mortgage.
In situations where children have adequate financial resources, some advisers recommend the children pay a parent’s health-insurance premiums, purchase a long-term-care insurance policy for him or her, give a set amount of money each month or purchase the parent’s home to generate cash for living expenses. (Before implementing a strategy, talk with your financial and tax advisers.)
The process can lead to conflict, although the tension typically remains beneath the surface, says Claudia Fine, and executive vice president at SeniorBridge, a New York-based company that provides care-management services.
Very often, she adds, she sees conflict arise over expenditures on caregiving. “Because feelings about inheritance are not expressed, families have a hard time sorting out their differences.”
Siblings Sort It Out
Linda Fodrini-Johnson, 67, suspects inheritance calculations play a role in differences she and her three brothers have over managing the finances of their mother, Bernice Bidwell, 90.
Ms. Fodrini-Johnson says she and one brother, 60-year-old Craig Bidwell, “don’t need to inherit” from their mother, who recently had a stroke and suffers from congestive heart failure. But disabilities have prevented the other brothers from working in recent years.
“There is tension,” says Ms. Fodrini-Johnson, who lives in Walnut Creek, Calif., and runs a company that provides care-management services. “You hear it and feel it, but nobody articulates it because it would be disrespectful to Mom.”
She points to a recent disagreement over her mother’s hair. She wanted to take her mother to a hairdresser instead of using the one at her mother’s assisted-living facility. But other siblings resisted.
No one came out and said it was about the cost, Ms. Fodrini-Johnson says, but that seemed to her to be the motivation. The siblings also debated whether to remodel and rent their mother’s San Francisco home—so it could bring in some money—or allow a grandchild to serve as temporary caretaker of the place.
To avoid conflict, Ms. Fodrini-Johnson says, she solicits her brothers’ opinions and explains the reasons for her decisions as well as the details of her mother’s finances. But as her mother’s power of attorney, she has the final say.
Her three brothers declined to comment on the hairstylist incident or said they didn’t know about it. Tow brother, Craig and 63-year-old Gary Bidwell of San Francisco say they discussed renting their mother’s house to bring in extra income to offset her expenses.
No Expectations
When it comes to the idea of inheritance, the three brothers are of similar minds.
Robin Bidwell, a 59-year-old in Colfax, Calif., says he sustained an injury at age 48 that has prevented him from working. While he receives a pension and Social Security, “I wasn’t able to put money away. I don’t live the life I want to live, but I don’t look to my mother’s inheritance to be on top of things,” he says. “I believe my mother’s care is first and foremost. That, to me, is more important than anything.”
“An inheritance would help, but I am not looking forward to it,” says his brother Gary, a 63-year-old who retired on a disability pension in 1998. “I don’t want an inheritance if I have to lose someone I love.”
Like many adult children, the third brother, Craig, says he hopes to receive an inheritance—in his case to help pay for a new home he and his wife plan to build. However, the retiree says he is grateful that his mother is able to afford the high-quality care she receives.
“Whatever my mother has is her,” he says. “It’s not my inheritance. I didn’t work for it. My brothers didn’t work for it. My parents worked for it.?
By Anne Tergesen in the Wall Street Journal