Considering Future Healthcare Needs Before Giving Gifts
Many individuals enjoy giving gifts to their family members while alive rather than waiting to pass the wealth through inheritance. Gifting while alive can bring the added benefit of experiencing the happiness the gift brings. However, with rising healthcare cost, there are many uncertainties about whether an individual nearing retirement can really afford to give gifts and still have enough to get through retirement with healthcare costs covered. Here are three things to consider before gifting early inheritance to family members:
- Plan for the worst and don’t trust the average costs of healthcare needs: Plain high for both medical costs and length of needed care.
- Don’t view the gift as an investment: Giving gifts to adult children does not secure a financial resource in the future, as the children may not be able to return the favor if the need arises.
- Don’t limit gifting options to financial gifts: Consider gifting family heirlooms or services, such as assisting with home repairs or childcare, instead of giving monetary gifts.
See Elizabeth O’Brien, Don’t Give Gifts to Your Heirs Until You’ve Answered This Question, Market Watch, Sept. 11, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.