Palo Alto, CA (Law Firm Newswire) March 28, 2013 – Average life expectancies in the U.S. rose in 2011, according to the National Center for Health Statistics.
Women’s life expectancy is now 81.1 years, and men’s expectancy is 76.3. That is a shift from 1975, when women had a life expectancy of 76.6 years and men had an expectancy of 68.8 years.
While most people are happy to know they will potentially live longer, their savings may not be prepared. Financial experts are concerned that there is a growing cohort of elderly people without enough money to support their needs. What will happen when their savings run out?
“We are seeing more clients who are concerned that their parents will need substantial financial support for some time,” commented Palo Alto estate planning attorney Michael Gilfix. “They need to put a structure into place now for when it is needed.”
A survey run in September 2012 by Merrill Lynch found that 47 percent of 35 to 50-year-olds admit that they have a high level of concern that they will soon be caring for an elderly parent, up from 32 percent in April 2010.
For individuals who have the funds to do so, “paying up” or transferring wealth to aging parents can be a way to help out. The most common ways to pay up include annual gifts; an annual gift of as much as $14,000 can be given tax-exempt to an individual. A couple can pool resources and make a joint gift of as much as $28,000 to each of their parents. The annual gift can be helpful for elders who need funds but want to retain some independence about where that cash goes.
However, that annual gift may make the parents ineligible for some government benefits, such as Medicaid and Supplemental Security Income. An individual can have no more than $2,000 in assets to qualify for those programs. If someone is gifted with $14,000, they will need to spend $12,000 of it before applying for government aid.
Adults who are concerned that they may be caring for elderly relatives soon, or who are already caring for them, may wish to speak with an elder law or estate planning attorney to explore what structures work best for them.
To learn more, visit Gilfix & La Poll Associates LLP at http://www.gilfix.com/.
Gilfix & La Poll Associates LLP
2300 Geng Rd., Suite 200
Palo Alto, CA 94303
Telephone: (650) 493-8070
Facebook: Like Us!