Some could be waiting an age for their elderly parents' assets
Financial planner Peter Blatt has several clients hoping to net big bequests soon. "Probably 10 per cent of my clients first come to my office and say, 'Here is a list of my assets - and oh, by the way, here is my $300,000 that I will inherit from my parents'," Blatt says.
The rub is that, despite being in their 80s, many of those parents remain fit and strong - they might even outlive their children who have clocked up five decades. Blatt tells his clients they cannot count on a prospective bequest as an asset - a hard fact to accept.
Disgruntlement about bequests postponed indefinitely must be increasingly common because, while our grandparents typically died in their 60s or 70s, Australian men now die at, on average, 80 while women hang on, on average, until 84. The nation has the world's third-longest life expectancy, which looks set to soar. Somewhere, the first person set to reach 150 is already alive - and soon we will live to a thousand, according to rejuvenation guru Aubrey De Grey.
Boomers now must face the strain of ageing parents slowly counting down the clock in costly care homes. According to Australian Institute of Health and Welfare figures, the average "completed length of stay" for permanent residents is about 146 weeks. That is nudging three years.
According to one seniors information resource, the cost of residential aged care varies between about $35,000 and $66,000 a year. The government usually covers about two-thirds of the cost - how much you pay depends on your level of assessable income, as gauged by the government welfare advice hub Centrelink or Veterans' Affairs, which assists people from a military background.
Would-be heirs who contribute to care must be feeling the strain as pooled funds shrink. But the beneficiaries-to-be cannot very well ask their parents to hurry up and die. Even just waiting and hoping to inherit a bundle is suspect because that strategy smacks of profiting from death. Worse, as personal-finance blog Living Stingy notes, the passive approach squashes ambition - if the adult children ever had any.
Financial analyst David Bakke says that, increasingly, parents are raising spoiled, entitled children who never grow up. The eternal brats refuse to grasp that to achieve success, they must go out and make their own money, he says.
His message is simple. "What children should be doing is to stop worrying about the inheritance and work on building up their own portfolios."
Likewise, Blatt champions fiscal discipline anchored in the "emotional understanding" that your parents can allot any assets they retain as they choose.
So stop assuming you will inherit a fortune that bankrolls your golden years. That tantalising payout might never happen or be paltry after nursing fees have eroded it.
So plan for retirement by setting a long-term budget, Blatt says. Then, he adds, stick to it.
Frequently Asked Questions about this Article…
No — the article warns you should not count on a prospective bequest as a retirement asset. Financial planner Peter Blatt says many clients list expected inheritances (some mention figures like $300,000), but parents are often healthy into their 80s or longer, nursing costs can erode estates, and bequests can be delayed or never materialise. Instead, plan your retirement with a long-term budget and build your own portfolio.
Longer life expectancy means inheritances are often postponed. The article notes Australian men now die on average at 80 and women at 84 (Australia has one of the world’s highest life expectancies), so children who expected a payout may have to wait years or may never receive it if nursing costs consume assets.
According to the article, residential aged care costs can range from about $35,000 to $66,000 a year. The government usually covers roughly two‑thirds of the cost; how much the family pays depends on assessable income as assessed by Centrelink or Veterans’ Affairs.
The Australian Institute of Health and Welfare figures cited in the article put the average 'completed length of stay' for permanent residents at about 146 weeks — roughly three years — which helps explain why aged care expenses can significantly reduce estate values over time.
You shouldn’t assume a contribution guarantees an inheritance. The article points out that pooled family funds can shrink when heirs help pay care costs, and beneficiaries can’t reasonably ask parents to hasten death. Financial advisers in the piece recommend treating an inheritance as uncertain and focusing on your own savings and investments.
Experts quoted recommend fiscal discipline and proactive planning: stop worrying about the inheritance, build up your own investment portfolio, set a long‑term retirement budget and stick to it, and cultivate the emotional understanding that parents can allocate their assets as they choose.
Yes. The article cites a personal‑finance blog and a financial analyst who argue that a passive strategy of waiting for an inheritance can squash ambition and create entitlement. Relying on someone else’s estate may discourage you from building independent wealth and pursuing financial goals.
Yes — Peter Blatt says about 10% of his clients initially present their assets and add that they expect to inherit amounts (for example, $300,000). The article stresses that advisers tell these clients not to treat prospective bequests as dependable assets.
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