Elder Law

Will You Receive a Negative Inheritance?

By Harry Margolis

A recent column in the Conde Nast's Portfolio.com explored what economist call "negative inheritance." People who don't prepare to care for sick and aging parents could fall victim to such "negative inheritance." The term (which was likely first used in the study of economics by Boston University Professor Laurence Kotlikoff) describes the situation when the costs to children of caring for aging relatives outstrip any gifts or bequests they might receive in return.

Those costs may be financial, physical and emotional, as children and other relatives give up jobs and homes to care for family members.  The following posting to the ElderLawAnswers.com Discussion Forum is not unusual:

My parents are in their mid-eighties and continue to live at home. We sold our large home 2 years ago and moved in temporarily with my parents while awaiting the purchase of our new home. Alas I discovered how much they needed more care than just each other during our stay. My husband and I now stay at my parents home and we do not even visit our own home. I quit my job last summer to increase the level of care necessary for them. We pay all their bills except for food as well as our own bills. I am taking CNA classes so that I may continue to take care of them at home as opposed to the option of nursing home care. We are now dipping into our personal retirement savings to continue to care for them.

While a supermajority -- 91% -- of boomers report being "generally pleased to be helping their parents," according to a survey by Putnam Investments, it doesn't relive the negative effects it may have on a caregivers own life.  Planning by purchasing long-term care insurance or making use of available public benefits can help eliminate these costs, decrease the stress on all concerned, and thus preserve and enhance the care family members can provide their parents. 

Full post as published by Elder Law Answers on March 04, 2008 (boomark / email).