masterwordsmith-unplugged

 According to Catey Hill:

1. “Paws off, Junior. This cash is mine.”

Children of boomer parents shouldn’t expect a big inheritance, even if their parents are rich. Only about half of high-net-worth baby boomers — those with more than $3 million in investible assets — say they consider leaving money to their kids a priority, according to a 2012 U.S. Trust Survey. In contrast, nearly three-quarters of people older than boomers say it’s important to them.

Even boomers — typically defined by demographers as those born between 1946 and 1964 — who do plan to leave an inheritance may do so with strings attached. Indeed, nearly seven in 10 high-net-worth boomers surveyed by U.S. Trust said they were not fully confident that their children could handle an inheritance.

“More often than not, clients leave inheritances in trusts,” says John Olivieri, a partner at New York law firm White & Case who works with a lot of boomer clients. With a trust, a third party manages the money and doles it out at intervals that the parent has specified. “Some parents have concerns about how their kids would invest and spend the money,” Olivieri says.

2. “Make room, kids. We’ll be living with you when we’re old…”

Boomers are expected to live longer than any previous generation. At the same time, many haven’t saved nearly enough for retirement. More than 44% of early boomers (whom the Employee Benefit Research Institute defines as those born between 1948 and 1954) and 43% of late boomers (born between 1955 and 1964) may not be able to afford basic living expenses in retirement, according to a 2012 analysis by EBRI. The result? Kids could be supporting mom and dad well into their 80s and 90s.

One of the biggest drains on boomer retirement savings will be health-care expenses. Medicare pays for only about 60% of the cost of health services the typical retiree will face, estimates EBRI. A couple that is 65 today might need nearly $300,000 to cover health costs. “People who haven’t saved enough for health-care costs may deplete their assets,” says Michael Markiewicz, a partner at New York-based Fogel Neale Partners. “A lot of them may have to live with their kids or depend on them for money and care.”

If parents do move in, their kids should expect to spend an extra $6,000 to $10,000 annually on food, clothing and other basics, says Andy Cohen, CEO of Caring.com, a website that provides resources for caregivers. Add thousands more for big-ticket items like wheelchair ramps or home health-care aids. Expensive as that sounds, it’s still often less than what it would cost to move a parent into an assisted living community, about $42,600 per year, on average, according to 2012 data from the MetLife Mature Market Institute.

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