Planning for retirement and creating an estate plan are two important things for older adults to take care of. Some people in New Jersey are uncomfortable talking to a third-party professional about their retirement and inheritance plans. However, most people have even more trouble speaking to their children about these subject matters. Lack of communication about estate planning between parents and children can cause some future complications.
A recent survey illustrated the communication gap between the older and younger generation regarding estate planning. Approximately 97 percent of the 1,000 individuals surveyed disagreed on whether the younger generation will care for their parents in the case of debilitating sickness. The survey also showed that children were uninformed regarding the size of the parents' estate. On average, children estimated about a $100,000 short on the value of their parents' estates.
Of the parents surveyed 97 percent stated they would not require financial help after retirement. However, 24 percent of their children believed their parents would need their help financially. Although 95 percent of parents and adult children stated they have discussed estate planning, only approximately 10 percent of the children described their discussions as detailed.
Nowadays, it is more important than ever for parents to discuss estate planning and inheritance issues with their children, since parents are living longer in New Jersey and elsewhere. This means parents will be using a larger portion of their savings on themselves, which could shrink the size of inheritance left to children. Not having these important conversations can leave surviving children surprised about making decisions regarding tax implications of an inheritance.
Source: Los Angeles Times, "Family retirement, inheritance conversations lost in translation," Tiffany Hsu, Nov. 14, 2012