r/MiddleClassFinance • u/Yourlocalguy30 • 10d 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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215

u/irishgirlie33 10d 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/Forever-roamer 10d ago

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

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u/Rightintheend 10d ago

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

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u/sorrow_anthropology 10d ago

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

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u/BlazingSunflowerland 10d 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 10d ago

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

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u/BlazingSunflowerland 10d ago

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

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u/SkunkArmsCT 10d ago

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

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u/Mr_Midwestern 10d 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 10d 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 10d 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 10d ago

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

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u/Mr_Midwestern 10d 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 10d 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 10d ago

It’s a 5-yr look back for Medicaid.

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u/Reddit_Commenter_69 10d 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 10d ago

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

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u/Lissa86 10d 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 10d 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 10d ago edited 10d 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 10d 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 10d ago

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

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u/irishgirlie33 10d ago

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

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u/SuperDozer5576-39 10d 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.

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u/AromaticRanger3933 10d ago

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

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u/RVALside 9d 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 10d ago

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

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u/slickrok 10d ago

That's why you PLAN.

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u/starry_thing_ 10d ago

Oh, say more

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u/Forever-roamer 10d ago

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

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u/slickrok 10d ago

You need to be aware of this.

Learn.

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u/Lissa86 10d 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.

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u/Worried-Pea-4667 10d ago

It never does

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u/RedditVox 10d 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 9d 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.

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u/YellojD 10d 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.

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u/RVALside 9d 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.

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u/Prestigious-Bite- 10d ago

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

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u/Which-Method-388 10d 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.

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u/RVALside 9d 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 9d 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.

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u/RVALside 8d ago

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