January 2016

Demographics and Estate Planning

We read about, and see in our own practice, certain trends that you will want to keep in mind as you implement your estate plan and work to keep it current. The 5 listed below are some of the most important.

1. America is Aging and Life Expectancies are longer. By 2020, 54.6 million Americans will be over age 65. A man who reaches age 65 today can expect to live to age 84.3 and a female to age 86.6. Therefore, people may spend longer dealing with capacity issues and this means that Financial and Health Care powers of attorney (and health care directives) will become even more important. Also, given these longer life expectancies, investment returns and distributions from trusts should be closely monitored.

2. Blended Families. Divorce and other causes are changing the make-up of American families. Only about 20% of American families are couples with married children. This may be why we're hearing more often: "I would want my spouse to have the use of my assets until death, but I don't want him/her choosing where all of the remaining amount passes at his death." Trusts are one important way we help our clients achieve objectives such as this.

3. Sandwich generation. About 40% of baby boomers are supporting both a parent and a dependent child. In some cases, our clients decide it is appropriate to name their parents in their estate plan to help meet the parent's financial needs in case of the death of our client.

4. Mobility. Moving to other states (and other countries) is becoming more common and this should be considered both for our clients and for their children or other beneficiaries.

5. Views on Marriage and Children. Children are marrying and having children later. Ages in trusts for making mandatory distributions or terminating the trust need to be considered in light of these changing views.