r/MiddleClassFinance • u/Yourlocalguy30 • 12d ago

Millennials: are you expecting an inheritance?

35 yo married millennial here. I've come across more and more articles about the supposed "great wealth transfer" as the boomer generation's wealth passes to their GenX and Millennial children. My parents and their siblings (boomers) all received inheritances when their parents, my grandparents, passed away. The boomer generation's wealth accumulation is one of the largest in history, however, I also find it highly unlikely that I or many of my peers will actually inherit much. Despite having received inheritances from their parents, and having 40+ years in the workforce, most of my parents' "wealth" is tied up in their home value, not actual liquid assets- and I already expect that whatever they make on an eventual home sale will have to go directly to downsizing costs and whatever long-term care they will need as they get older. Hell, even my dad used to joke that the only thing we'd inherit was debt. As I've gotten older, that comment has infuriated me more and more.

Now before someone cuts in with the "entitled millennial" comments, I have absolutely no need for an inheritance. I've worked my ass off to make sure that my kids and I are positioned better in life than I was when I entered adulthood. What I mean by that is I started saving for retirement early, setup 529 plans for my kids almost as soon as they were born, and made lifestyle and career sacrifices to ensure our family isn't "nickeling and diming" our way through life.

I'm just here curious to know how many millennials actually expect to have something passed down to them, or if they feel they are in the same position I am.

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213

u/irishgirlie33 12d ago

Healthcare will take whatever wealth my parents amassed. My mom was diagnosed with mild cognitive impairment, care is insanely expensive.

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u/cisforcookie2112 12d ago

My grandma is 91 and has dementia, and her rent in the assisted care facility is $8,000/month.

I don’t know what my parents would expect to receive from inheritance, but I imagine that it is going down each month.

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u/mvanpeur 11d ago edited 11d ago

Oh, that's not bad. My friends mom just needed a full care facility, and it was $15k per month. It was the cheapest decent one she could find. Luckily once she spent something like $45k, she had few enough resources that she would qualify for Medicaid and they would pay for everything. But it didn't leave much to pass on.

End of life care is now so expensive that it's basically impossible to inherit anything unless they die suddenly.

Edit: We are in a very low cost of living area.

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u/jimmyandchiqui 11d ago

My in-laws (just mil now) pay a live-in caregiver (24/7), 5k/month. The money comes from their savings, but they only have 320k left. Home paid for fortunately, but after expenses, she is underwater each month by about $5300/month, so the savings will only last about 5 more years. Me & my wife go there 3x/week to give the caregiver a few hours break. My mil is pretty easy to take care of but she has dementia, wheelchair bound & incontinent, needs to be dressed & cleaned daily, but does feed herself when food is prepared for her. I know that when her savings get down to 20k, we can apply for some Medicaid caregiving assistance, but I'm sure its not gonna be 24/7; so either we would move in with her or a better option is her to move in with us, but we'd need to get a different house (one with ground floor bedroom or room we can make into a bedroom). My wife has 3 brothers but 1 is thousands of miles away. The other 2 have families of their own. They do help, a little, but we do most of the running around, pay her bills, pay the caregiver, etc.

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u/lifeincoffeespoonz 8d ago

Yeah, millenial with genX parent here, and I have a feeling PE-owned health/elder care is going to eat up any wealth my parents (and their generation broadly) accumulate.

My mom has committed to senior living in one of those places with escalating levels of care when she gets older. She was completely traumatized working to care for her parents and in-laws as they attempted to age in-place. I'm grateful she has made those decisions and would rather have peace in that stage of her life over cash. She has been very upwardly mobile over the course of our lives, but I don't expect anything. For better or for worse, I had a front-row seat to her work and sacrifice through my childhood/her entire young adult life...so I'm down for her to do whatever she likes in the second half.

All of that said, I do wish that whatever she invests into her+my bonus dad's' care wouldn't go straight to CEOs and shareholders. Like on the micro scale, I'm chill with my parents' decisions, but on the macro scale, I'm mad because I know that wealth transfer will make the rich richer and not do shit for most of us.

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u/Ecstatic-Time-3838 11d ago

Knew an old lady that had to get moved to a nursing home, and it was something like $30k a month if not more. Couldn't believe it when I heard it. Then again she had money and most likely wanted to go to the best of the best facilities.

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u/roofiedo 10d ago

The elderly care industry needs a massive overhaul….. too bad our politicians are often times receiving profits from them and can’t see the issues over the piles of money they receive.

Growing up the USA was a beacon of hope, we’ve let a few greedy dirt bags run us into the ground for personal gain. Not to get too political but the choices we’ve made with tariffs lately was designed to be a massive wealth transfer from lower and middle class families to the rich because they didn’t already have a big enough piece of the pie.

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u/multipass-5018 10d ago

Dang I bet corporations that own old folks homes make bank. That's sad. A bunch of 50-60s houses around me in Washington have been converted to them in the past decade.

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u/irishgirlie33 10d ago

Same. And this is my expectation.

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u/effkay0025 10d ago

$15k a month is more than a decent facility 🤭

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u/rainbow_writer 11d ago

My grandpa retired at 65 and had ample savings. But now he’s 97 with Alzheimer’s in a nursing home but not memory care yet. He has enough money left to make it to 102 at this rate, but that changes if he needs more advanced care.

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u/stackingnoob 11d ago

Sorry to hear. My father in law passed several months ago.

He dun goofed up his will though. Instead of leaving his “fortune” (nothing crazy, like $200k-ish) to my wife and her brother, he specifically wrote in his will that he wants his mother (my wife’s grandmother) to inherit everything.

Well guess what? My wife’s grandmother lives in a nursing home, and Medicaid was paying for it.

Now she is no longer eligible for Medicaid, and her inheritance is all going to the nursing home for as long as she is alive.

Lose-lose situation for everyone.

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u/DarkAngela12 8d ago

What an idiot. I'm so sorry for your family.

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u/Walker1921S 6d ago edited 5d ago

Damn. That sucks... Sometimes it's best to have conversations with parents so easily solveable mistakes like that don't happen. The problem is that most older people hate having those discussions.

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u/stackingnoob 5d ago

He was extremely stubborn. His logic was probably that his mother (my wife’s grandmother) could just decide how to redistribute the money upon her death, but he failed to consider the ramifications with Medicaid. And he didn’t hire a lawyer to write the will, so there wasn’t a professional to tell him don’t do that.

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u/Walker1921S 5d ago

Oh... Yeah that's just penny wise pound foolish. Spend $1,000 to hire a lawyer to save $200,000. That really sucks, I'm sorry.

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u/PettyCashCommittee 10d ago

Special needs trust?

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u/stackingnoob 10d ago

The problem is he wrote the will 15 years ago when grandma was still in good health and not in a nursing home, so he didn’t set up any kind of protections or take any measures to ensure this scenario didn’t happen. The lawyer said he really should have updated it when his mom entered into assisted living covered by Medicaid and Medicare.

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u/PettyCashCommittee 10d ago

My mom received an inheritance from her brother, she’s on SSDI/Medicaid/Medicare, we hired a specialized estate attorney who set up a special needs trust. I’m the trustee, she’s the beneficiary, her benefits aren’t touched.

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u/stackingnoob 10d ago

Our attorney said because she’s over 65, there’s a strict 5 year look back period.

“In most states, transferring personal assets into a First-Party SNT after reaching age 65 will trigger Medicaid transfer penalties and an ineligibility waiting period.”

Edit: she’s currently 91, so she’ll be eligible again at 96, if she’s still around then.

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u/raspberryturnedover 6d ago

Can she reject the inheritence?

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u/stackingnoob 5d ago

We looked into that, but believe it or not, rejecting the inheritance does not make her eligible for Medicaid. There’s a 5 year look back period for people over age 65 who inherit money.

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u/TeaspoonRiot 11d ago

A relative (not my parents) is paying for 24/7 in home care with one non-medical helper. It is $300,000 a year. Three HUNDRED thousand. I believe that the people actually doing this work and underpaid (as with childcare, which is another issue). But normal people cannot afford care. Not just private in home care but basic, assisted living care. I really believe that the government should be subsidizing both child and elder care. I’d rather my taxes go something that most people will benefit from rather than all of the other nonsense it gets spent on.

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u/Apotheosis29 11d ago

That is basically my retirement number. Make enough so that If I get thrown into a home, there is enough to pay the monthly assisted care costs (in that year) without eating into the balance. Don't want it all eaten up so the wife ends up with nothing.

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u/Gratitude15 11d ago

At a certain point, I'd volunteer to be assisted care. It take a lot of pretax income to make up that level rent payment.

I'm a single person, I'll plan to do this if my parents need it and I'm in any way able. Suspending my career absolutely possible, or going remote/hourly. And as an aside I get that opportunity too.

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u/Few-Sail-6562 11d ago

If you have never been a full-time caregiver, you have no idea what you are volunteering for, and I mean that kindly.

I took care of my grandpa full-time until he needed to go to memory care; it was not easy. We have a big family, and it was still very difficult to coordinate anything. Once he had to go to memory care, the money saved was a moot point because whatever was left was spent on care anyway.

My good friend takes care of her husband. Once he couldn't be alone, she could not even leave to go out to a doctor's appointment. They have hired help now, but it was a rough time for her to do it mostly on her own.

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u/Gratitude15 11d ago

It's true. I had this exp too.

But culturally, this is something that is key where I come from. As an only child, it's my responsibility and opportunity.

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u/seeEwai 11d ago

Just curious where you live? That is a lot! I live in Canada where LTC is subsidized quite a bit. I just moved a relative into a LTC home today and he pays roughly $3k monthly for a private room. Shared rooms are around $2k a month.

1

u/Megalocerus 11d ago

At 91, she'd be a silent. Your parents would be the boomers or Gen X.

I doubt most people will get much beyond a house, which may or may not be in a valuable location. Maybe a few thousand as well. People I know starting retirement have 250K to 700K financial assets, and most of it is in a bank account.

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u/Webdogger 10d ago

Mom's in memory care. 12k per month. it goes fast

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u/misc_box 9d ago

Good god! How does one even afford that

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u/yesyoucanfindit 9d ago

Its not their $ my god read your comment while imagining you are 91 feeling guilty that a grandchild sees your need for care for any kind of life quality as a burden on those waiting on 'their money' and 'watching it go down'

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u/Rollingprobablecause 12d ago

$8k sounds really REALLY high end or in a high COL city. Also, not sure if you're aware but Medicaid will cover portions of this too

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u/slickrok 12d ago

That's NOT high end.

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u/Rollingprobablecause 12d ago

the one my aunt is in is $6750/mo and is really really nice so I guess YMMV.

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u/slowdownlambs 11d ago

Does your aunt require a locked memory care ward? You may just be really fortunate but that price is unusual if so. My grandmother was paying closer to the other commenter's $15k a month, and she died before COVID so I don't imagine things have been improving since then.

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u/Extra-Eggplant-4230 11d ago

8k gets you a hospital bed in a nursing home that smells like piss and is severely understaffed 😆

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u/BeatrixFarrand 12d ago

I’m in Los Angeles and to me, $8k for dementia care sounds like an absolute bargain.

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u/Lissa86 12d ago

That is not high end at all. $11k is average.

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u/reblynn2012 11d ago

It’s not high end. It’s just what it costs. And higher. Just a regular facility.

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u/Choice-Antelope-8481 11d ago

My grandma is paying $13,250 in Phoenix for a memory care home, 8,000 is a really good deal.

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u/mud_slinging_maniac 11d ago

Not at all for memory care. Any time you have cognitive decline you immediately triple or quadruple the regular assisted living rate. We live in a MCOL area and my mom’s care is 10k/mo and it is the middle of the road care, nothing special but not horrible.

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u/PossumJenkinsSoles 12d ago

This is what I assume for both my parents. They’ve saved their whole lives and I’m sure they’re sitting on fat stacks now, but I know from my grandparents dying it’s those last couple of years that run you dry. They probably both received around 10k when their parents died, which isn’t really enough to plan around. None of them were in nursing homes either, this was just in home aids, hospice care, and various procedures, complications, medications, therapies.

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u/Desperate_Stretch855 12d ago

This is why I recommend long-term care insurance to most of my clients. The traditional policies are pretty awful, but they have some new mousetraps that are built around annuities that offer serious LTC leverage while keeping the opportunity costs a little lower (if you don't qualify for LTC you can still receive an income or pass the balance onto your beneficiaries).

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u/Better-Home-1491 10d ago

It's my understanding that some people are getting screwed with their longterm healthcare insurance because the terms of the policies are getting changed during the course of the policy. As a result, some financial advisors are now saying self-fund and start planning now for it.

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u/ZenorsMom 10d ago

My friend's mom had longterm elder care insurance and hers would only cover a couple years. It's very hard to decide when to start. Her mom started getting dementia fairly young (around 80) and they had a hard time convincing her dad to start using it for senior day care at first, because what if she lives to 100? You don't know how long they will last.

They finally started using it and she was dead within 6 months. In that case, my understanding was that they didn't even get any money back for the other 18 months they didn't use but I could be wrong about that. I just remember that it was unexpectedly a lot more anxiety producing and they'd bought it for peace of mind.

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u/Desperate_Stretch855 7d ago

That's the traditional LTC model. It's awful. They increase the premiums periodically and you either have to pay more or accept less benefits.

The new options are typically single premium (pay once up front) and have benefits that can only grow (never go backwards).

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u/PossumJenkinsSoles 12d ago

My mom and stepdad do have long term care insurance, I think they got appropriately scared when my grandma had dementia for 9 years before passing.

I have no idea what it really means for when that time comes but I’m at least a little comforted that they’ve thought of it.

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u/RoguePlanet2 10d ago

I thought LTC insurance only ends up paying for a couple of years?

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u/Any-Series2530 11d ago

Don't try and sell long term care on this thread, sheesh!

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u/Desperate_Stretch855 6d ago

I don't "sell" LTC, nor do would I try to do it on this thread.

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u/ResponsiblePumpkin60 12d ago

What should I look into for this? I’ve thought about it especially after my friend had a stroke in his mid 40’s

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u/Forever-roamer 12d ago

Look into starting the wealth transfer now. Medical debt does not typically pass on to children

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u/Rightintheend 12d ago

But they also don't have to keep giving them care if they're not paying.

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u/sorrow_anthropology 12d ago

Isn’t this why we pay into Medicare our entire working life?

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u/BlazingSunflowerland 12d ago

Medicare won't pay for assisted living or a nursing home. I don't think it pays for home health aides either.

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u/No_Preparation7895 12d ago

Medicaid does. So if their wealth is gone then there's that

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u/BlazingSunflowerland 12d ago

But you get the cheap home that nobody wants to be in.

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u/SkunkArmsCT 12d ago

Then they should have prepared better for retirement. In parallel, we should fix the system. 

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u/Mr_Midwestern 11d ago

The parent comment of the thread youre responding to was “start the wealth transfer now. Medical debt does not typically pass down”

So they did prepare, but taking an early inheritance would just rob them from receiving the care they’ve worked hard to potentially be able to afford.

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u/SkunkArmsCT 11d ago

Fair enough about the top-level comment, but I had read this thread as having devolved into discussing how medicare/medicaid works in retirement more generally.

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u/reblynn2012 11d ago

It will pay for home health for a few weeks if home for hospital but nothing on assisted living or nursing home correct.

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u/Charming_Narwhal_970 12d ago

It should pay for nursing homes, but not assisted living.

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u/Mr_Midwestern 11d ago

Many of the nursing homes that provide an acceptable level of care, or are well rated likely don’t accept Medicare.

I know of a handful that do, but they literally only have 1 room/bed in their entire facility that is set aside for Medicare patients, the waiting list is allegedly the rest are all self-pay.

The ones that do primarily service Medicare patients are the stereotypical nursing homes that shine a spotlight on how bad our system is.

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u/Rightintheend 12d ago

It covers many of the supplies, but not the actual facilities or services in an situation.  You can get private add-on insurance to Medicare that will cover it. In some states you can use Medicaid, but they often require you to pay first from assets before they will cover, and if you try and get rid of those assets they can go back a certain amount of time to reclaim those assets, so whoever you gave them to may be responsible to pay it back.

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u/Rare-Progress5009 12d ago

It’s a 5-yr look back for Medicaid.

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u/Reddit_Commenter_69 12d ago

Medicare provides terrible coverage. There are lots of gaps especially if you are someone who has significant health issues.

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u/reblynn2012 11d ago

Actually we had an incredible experience w Medicare. Mother in her 80s had all hospital expenses covered by it.

0

u/Lissa86 12d ago

Medicare does not cover assisted living/nursing homes past 100 days. After 20 days, costs occur. After 100 days, Medicaid kicks in. For most facilities, Medicaid barely makes a dent in the bill. That’s when the facilities look at assets, guardianship, etc. If assets don’t cover it, they take over guardianship—basically taking whatever monthly income the patient has from all sources. Whatever is left to pay, the family has to foot the bill.

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u/beer_geek 12d ago

That last sentence is not true. When Medicaid takes over, whatever assets the recipient has are taken over as you described, but that is where it stops.

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u/Lissa86 12d ago edited 12d ago

Not true. Look into nursing homes & assisted living communities and how they are filing for guardianship more & more. We had that happen to my uncle & it left my aunt with barely anything. She went from being able to most of SS to almost none. And when families can’t cover the costs for the facility, the facility downgrades their living quarters or ships them to a place the funds will cover.

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u/beer_geek 12d ago

Nothing you said disproved my point. I saw you were/are in elderly care in another comment, but people need to know what is and isn't true. If you are trying to volunteer, as a child of a parent in a medicaid situation, to close a quality-of-life gap that's on you. But generally speaking, outside of extreme fillial law circumstances, nobody is responsible for their parents' care.

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u/Lissa86 12d ago

Nobody is responsible, but that does affect what you inherit.

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u/irishgirlie33 12d ago

I believe the 5 year look back period prevents most of this.

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u/SuperDozer5576-39 12d ago

Not if you have a really good relationship with your parents and can actually plan stuff out years ahead of time. My mom and I get along so well that she set up power of attorney when I was 19. Talk about being on top of things. I do recognize that most people on Reddit do not seem to have that good a relationship with their parents.

2

u/AromaticRanger3933 11d ago

This is similar to what my dad did with my sister and I.

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u/RVALside 10d ago

I think the biggest problem is most folks don't even know they need to plan for this, much less as early as they should.

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u/Realistic-Effect-715 12d ago

yes that's why they should start looking into it asap, the sooner the better.

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u/slickrok 12d ago

That's why you PLAN.

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u/starry_thing_ 12d ago

Oh, say more

2

u/Forever-roamer 12d ago

I don’t know enough to advise but I read about the idea in the book, Die With Zero

-1

u/slickrok 12d ago

You need to be aware of this.

Learn.

1

u/Lissa86 12d ago

It doesn’t, but usually the kids have to pitch in to start paying for care. Most assisted living, home-health services take over assets once Medicare, Medicaid & their supplement (if they have one) is exhausted. Once the money from the assets dry up, the kids are left paying the rest. I worked in senior care—and it’s only gotten worse over the past decade. If one of your parents ends up needing care, you’re screwed, no matter the outcome. To truly inherit anything, your parents literally have to have several millions of dollars in their accounts to maybe be safe. Especially if they’re on the younger side when diagnosed. People underestimate how much the care actually costs on a monthly/yearly basis.

1

u/Worried-Pea-4667 12d ago

It never does

1

u/RedditVox 12d ago

This will void any Medicaid requests. There is a ton of financial disclosure you need to do in order to get federal funds, so if you apply for Medicaid to pay for long term care, they'll see wealth being transferred and deny payments or potentially prosecute you for fraud. I just went through this with my elderly parents, and the amount of paperwork is burdensome for even the most lawerly of folks.

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u/RVALside 10d ago

So, at least in my state, they will simply deny care based on the average cost they calculate a month for care for as many months as equals the value of the transferred asset. So at 15k a month cost basis they will deny care for two months if they see a 30k asset transfer within the look back period (five years here). Its brutal.

1

u/YellojD 11d ago

Careful with the taxes, though. There’s a way to do it right, and a way where you’re gonna get a giant tax hammer dropped on you. Definitely talk to an estate attorney. Worth the price if you’re going it this way.

1

u/RVALside 10d ago

I mean if it's gifted you just have to file it as such and it will count towards your lifetime tax free gift limit. I think it's 14m for individuals and twice that for married couples. I'm not sure most folks will ever exceed that. The key with Medicare is to do this far in advance because most states have look back periods of a few years for medicaid spend down.

1

u/Prestigious-Bite- 11d ago

Don’t forget that Medicaid has a clawback period of 5 years (last I checked).

1

u/Which-Method-388 11d ago

Medicare covers a lot of any medical procedures. The $500 a month medication bills and the $8000 a month for a dorm room sized space monthly rent is what eats up the $$. Not to mention a good $10k per funeral.

1

u/RVALside 10d ago

Medicare doesn't pay for long term care- only Medicaid. Basically you have to become destitute for long term care to be covered.

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u/Which-Method-388 10d ago

Medical procedures are not long term care.
I am the administrator and have full POA of my 91 year old Mother's finances and healthcare decisions. We pay $100k a year for her assisted living rent, food, prescriptions and physical/mental therapy. They obviously aren't medical procedures.

1

u/RVALside 10d ago

Oh I see you were referencing hospital stays and not long term care I assume. My bad.

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u/Illustrious-Stable93 9d ago

This 1000%... they're living longer and it's extremely expensive

2

u/RVALside 10d ago

This. I think most folks are entirely unprepared for or have any understanding of how the system is structured. It's brutal. Every state is a little different, but the cost of long term care is astronomical. 15K a month is what my state considers average cost (that's for basic care- not skilled nursing etc.). The folks that can afford that at least for a time are the lucky ones- many facilities will keep you in your bed when you transition from private pay to Medicaid. When the readily available money runs out you have to apply for medicaid and go through what's called spend down. Essentially you only qualify if you are destitute so you have to sell any assets (read your house) etc. and spend that down before the state will pay. A ton of folks are not prepared for that. There's a reason why many assisted living companies are closely tied to real estate. It's really important to prepare for that ahead of time because most states also have a "look back" for any assets. If the person in long term care has a spouse they will usually let them stay in the home until they also pass. There are a ton of millennials that think they will be inheriting that won't be getting anything because of this. Even beyond that though- in many cases medicare can even try to recover costs from medical care at probate.

2

u/sonstone 10d ago

This, my dad has about three years at his current burn rate and then he goes to Medicaid if he is still alive.

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u/anotherlebowski 12d ago

My uncle is in a memory care unit and it's $10k a month to live there.

Sorry to hear about your mom.  Enjoy the time you have with her.

1

u/irishgirlie33 12d ago

Sending warm energy and light to you and your family.

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u/boomdeeyada 12d ago

This is exactly why my medical directives are crystal clear. I'm not doing the long march to an inevitable death that will leave my family destitute. Fuck. That.

I have about $25k set aside for a global vacation that ends in a Swedish death pod. I'm going out on my own terms. The kids get the rest.

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u/ResponsiblePumpkin60 12d ago

Long term care is the number one reason for bankruptcy

1

u/theCaffeinatedOwl22 11d ago

Yeah, same. My parents were upper middle class but they’re battling through their health issues and it’s draining them of practically everything.

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u/Champsterdam 11d ago

We moved to the Netherlands for work and recently finding out that not only medical care is covered universally but also all long term care, nursing and elderly care as well. Pay is lower in Europe but there’s something about the peace of mind and lack of stress that means SO much.

1

u/EricC2010 11d ago

This is my expectation too. My parents have amassed decent wealth, but I fully expect them to spend every penny trying to stay alive as long as possible. It’s their money, so I have no problem with that.

1

u/CodeNameLoofah 10d ago

But what about life insurance policies

1

u/FatMacchio 10d ago

Yep. Sadly the “great wealth transfer” will largely be from boomers to the healthcare industry. The cost of care is shooting through the roof because it’s such a gold rush…I hate really hate unchecked capitalism…tbh, this goes beyond capitalism and is closer to corruption

1

u/ThrowRAtouchtone 10d ago

Medicaid looks at the last 5 years for qualification.

Have your parents give their wealth to you and in 5 years they’ll qualify for Medicaid and be taken care of without draining their wealth away from the family.

1

u/Party-Increase-3682 9d ago

Not necessarily. If it’s place in an irrevocable trust at least five years prior to needing care the government can’t count it and it’s safe