Thanks for your thoughts, @1214mom and @HImom. I’m of similar thinking. I have a rough idea of my parent’s net worth/financial picture but we’ve never discussed details.
The chance my kids would have to worry about supporting us is very, very slim. We hope to/should be able to leave something to them but anything could happen plus I don’t want them to factor that into their life and career decisions.
I think the best financial gift we as parents can give our kids is the assurance that we have sufficient assets that they don’t have to worry about providing financial support for us as we age. Allowing the kids to graduate with little or no debt is also a very thoughtful gift that will hopefully allow kids to pay it forward so their kids will similarly graduate with little or no debt.
Our kids seem amused that we are traveling more than they expected, as well as a lot more dining out that they expected (or recall, since funds were much tighter when we were spending money raising them).
When my mom was in her late 70’s, she discussed things with me and independently, with my sister. She wanted an annuity for my sister and wanted to know if I wanted the same. She discussed other matters with my sister. She also wrote a goodbye letter and mentioned who was to receive various items of jewelry. She never discussed any actual figures. Since I was local, she showed me where the important papers were. The only thing she didn’t get to do was change me to be exclusive POA, not shared. She had an appointment with her lawyer, but already went into the hospital. She died too young.
Agree @HImom. My parents have given us those two gifts - no college debt/no worries about providing them with financial support. We have definitely been paying that forward. It is a gift and a privilege that is very much appreciated.
Yes, I feel very fortunate that we were able to pay it forward and provide these gifts for our kids. If possible, we MAY help contribute toward any grandkids’ educational expenses. I think these gifts cannot be underestimated and were worth the many years of eating simply and spending little so we could save and help fund these. Neither H nor I begrudge the many years of scrimping.
Agreed that it’s a true gift to pay for college for kids and also let them know that they will not need to support us in our old age We are very fortunate. I love the idea that maybe we would be able to fund future grandkids’ educational expenses.
Kids do not know our net worth; just that we are “comfortable” and able to do, within reason, whatever it is we wish to do. My mother has shared her net worth with me and, fortunately, will never need to turn to me or my siblings. DH’s parents seem self-sufficient at ages 87 and 88 but MIL fell (first true sign of a problem for either of them) and will be released from the hospital this week. They live in a retirement community where she’ll need to go to the Care Unit which will cost an additional $700/day. I’m sure this won’t be a problem in the near term but, should this last for months or longer, I’m not so sure.
This is the key nuance here:
“from their own assets”
So if you have $10K in credit card debt when you die, and you leave your brokerage account and your bank accounts to your heirs in TOD accounts, then those assets don’t go through probate, which is how creditors normally get paid. But the creditors can still go after the TOD recipients for the debt. Most of them won’t, because it is a lot of trouble and they have to do the legwork to track everything down since nothing went through probate, but they could. Say if it were $100K instead of $10K they might think it was worth it.
If you die with $100K of debt and no assets heirs are not responsible for the debt. If you die with $100K of debt and $1M in life insurance, the insurance beneficiaries cannot be required to pay the debt from the insurance proceeds.
The reason I excluded funeral costs from the above is that in my experience the funeral home will demand payment up front, they won’t agree to go after the estate for the bills. A living person has to agree to pay.
Not sure myself but I’m not a lawyer
From https://www.ftc.gov/news-events/press-releases/2011/07/ftc-issues-final-policy-statement-collecting-debts-deceased, emphasis mine:
Be aware that in some states, many assets in the estate are available to the government if the deceased person had received Medicaid benefits.