Long-term care and out-of-pocket healthcare costs, combined with financial support for extended family have emerged as the new risk to family wealth, according to a recent survey of 711 high net worth adults in the U.S.
The 2013 Insights on Wealth and Worth survey by private bank U.S. Trust found that:
- Forty-seven percent of all respondents have created a financial plan to address long-term care needs that they and their spouse or partner might need, but only 18% have a financial plan that accounts for parents’ long-term care costs.
- Only one-quarter (27 %) of baby boomers and 16% of those who are over age 68 say they ever expected their parents might turn to them for financial assistance. Yet, one-third of Generation X and nearly half (46%) of Generation Y expect their parents or in-laws to rely on them for financial assistance at some point in their lives.
- Sixty-three percent of wealthy people feel responsible for financially supporting their parents or in-laws if needed, even if it jeopardises their own financial security, and 55% feel a responsibility to provide financial assistance for less financially fortunate siblings if they were to need it. Fifty-six percent of wealthy parents say they provide financial support to their adult children.
When it comes to estate planning, the survey found that, while the basics, such as a written will, are in place, comprehensive planning is incomplete. Survey respondents cited the top three goals of estate planning as:
(1) ensuring the needs of a spouse are met;
(2) minimising estate taxes; and
(3) minimising the administrative burden of settling one’s estate.
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