Thinking About Giving Money to your Adult Children? Think Again

[FinancialDad.org]

Interesting NYTimes article on wealth transfer between generations:

https://www.nytimes.com/2019/11/06/your-money/parents-children-money-advice.html

I wondering if anyone has heard of anything like this before:

<<About 90 percent of liquid assets are spent during the last 10 percent to 20 percent of a person’s life, largely because of medical expenses, Mr. Condon estimated. He recommends that parents never give away more than 10 percent of their liquid assets.>>

Aside from the poor writing, (90% of what? all available liquid assets? all liquid assets spent over a lifetime? or???), I'm confused.

[AMandM]

I agree, it doesn't make much sense. Surely people spend most of their liquid assets at the end of their life because they are retired, so they're spending assets to replace part of their income?

If I'm 50, but my life expectancy is 85, then is it safe to give assets to my kids now, before I reach 80% of my life span? At age 68 I'll start spending 90% of whatever's left. ;-)

[Cassie]

I think the fear is if you give too much away you may not have as much as you need for the end of your life.

[waltworks]

The fear is you don't have enough for your 3rd hip replacement at 95, and then you don't have enough to pay for the hospitalization for the complications after you die 3 times on the operating table.

It's really about how we can't handle the concept of dying with a modicum of dignity.

-W

[FinancialDad.org]

I agree, it doesn't make much sense. Surely people spend most of their liquid assets at the end of their life because they are retired, so they're spending assets to replace part of their income?

Unfortunately, more of the shoddy writing/research/reporting that I feel like the Times is doing these days..oh well.

From what I can tell (for planning purposes), the waters on last-year-of-life-medical-spending are very muddy indeed.  For instance, this Forbes article: https://www.forbes.com/sites/howardgleckman/2018/10/11/medicare-may-be-spending-far-less-on-end-of-life-patients-than-we-think/#5251edf538ff

If I'm 50, but my life expectancy is 85, then is it safe to give assets to my kids now, before I reach 80% of my life span? At age 68 I'll start spending 90% of whatever's left. ;-)

Excellent plan! :)

[Cranky]

I think a lot of families want to give away assets *before* medical costs and long term care eat them up.

[Dicey]

I agree, it doesn't make much sense. Surely people spend most of their liquid assets at the end of their life because they are retired, so they're spending assets to replace part of their income?

Unfortunately, more of the shoddy writing/research/reporting that I feel like the Times is doing these days..oh well.

From what I can tell (for planning purposes), the waters on last-year-of-life-medical-spending are very muddy indeed.  For instance, this Forbes article: https://www.forbes.com/sites/howardgleckman/2018/10/11/medicare-may-be-spending-far-less-on-end-of-life-patients-than-we-think/#5251edf538ff

If I'm 50, but my life expectancy is 85, then is it safe to give assets to my kids now, before I reach 80% of my life span? At age 68 I'll start spending 90% of whatever's left. ;-)

Excellent plan! :)

That Forbes article makes a lot of sense. I wonder if the "facts" in the NYT article, which I've heard many times before, are perpetrated by the Long Term Care Insurance industry. It seems like a classic "Scare 'em and sell 'em" tactic. Sure, a lot of people spend a ton of money on end-of-life healthcare, but a lot of people don't.

[mm1970]

I think a lot of families want to give away assets *before* medical costs and long term care eat them up.

Yep. I've seen it.  It's pretty ridiculous.

If you have the assets, spend them on your health.  Why the fuck should all of society be burdened to house you in a crappy, depressing, convalescent home when you have significant assets?  It makes no sense to me.

Do I want my kids to inherit some day?  Yeah sure.  If I'm 90 and end up in a home for 5 years, would I rather use my $$ to make sure it's not a depressing piece of crap?  Yes.  That money is going right back into the economy, after all, paying for cleaners, cooks, electricians, nurses, etc. 

[BTDretire]

I've always wondered about these things, the idea that people must have money to the end.
But millions live on a meager SS for all of their retired life.
Does the SS category just died earlier for lack of money vs those with money?

[Awesomeness]

I've always wondered about these things, the idea that people must have money to the end.
But millions live on a meager SS for all of their retired life.
Does the SS category just died earlier for lack of money vs those with money?

They just qualify for Medicaid and if they’re lucky enough they’ll be in a nice facility and have relatives to check on them.  Probably a shared room but the care could be the same as others w private rooms paying thousands a month.

Such a stressful depressing topic. I’ve lost both my parents the last couple years and my dad last summer.  I was literally visiting him at his place and ran numbers sitting there trying to figure out if I could afford something like this someday and I’m 48.  It sucks.  His place was 4300 w month plus meds and he still sat in his dirty diapers for an hour before they got to him, even w me there trying k to find help.  It’s horrible.  My mom was on Medicaid and shared a room but the place was nice. Even then she still fell out of bed and her wheelchair. I guess the rich can have 24 hour attendants so nothing like this happens to them.