Even though America is a land of economic prosperity, our aging population lags behind elders in other countries when it comes to inheritances. Most Americans intend to leave behind about $177,000 for beneficiaries and others who would inherit property; compared to several other nations, that is a pittance. In fact, Floridians might marvel at the idea that most Australians plan to leave $502,000 to their heirs. So, what is the difference between us and them? Experts say that a variety of social factors could be leading to lower inheritances. Those factors include estate tax and the growing cost of medical care in the United States.
Residents of five countries were more likely to leave high inheritances for their beneficiaries. Those included France, Australia, Singapore, the U.K. and Taiwan. The commonality among these: a national health care system. Many experts say that increased spending on health care in old age may actually be limiting our ability to leave money to our children or heirs. Shockingly, 25 percent of Medicare recipients spend more than their total assets on medical costs alone during the last five years of their lives. Medicare does not pay for end-of-life care, such as nursing home residency or home-care services.
Further, the older generation of Americans has suffered serious financial setbacks in recent years, losing an average of $117,000 due to stock market declines and family money issues. In many cases, these older workers are expected to support a child or grandchild, which can drain the family coffers even faster. Sadly, younger generations are relying on the financial windfalls expected at their parents’ passing to plan for their own retirements, but it is not clear whether much of that inheritance money will ever materialize.
Older Americans who are concerned about the effect of estate tax and other factors on their estate planning decisions can benefit from the advice given by a qualified probate attorney. These professionals can help Florida clients learn more about the impact of tax liability and health care costs on their estates, which can lead to a more favorable outcome for benefactors and beneficiaries alike.