The Jackpot Generation
September 16, 2024 8:50 AM Subscribe
Canada is in the midst of the greatest wealth transfer of all time, as some $1 trillion passes from boomers to their millennial kids. How an inheritance-based economy will transform the country. (slMacleans)
Speaking for myself, and only for myself, I definitely did not get the kind of Boomer parents who have any of that potential wealth!
Speaking for myself, and only for myself, I definitely did not get the kind of Boomer parents who have any of that potential wealth!
Skipping over Gen X, as always.
posted by Melismata at 8:59 AM on September 16 [51 favorites]
posted by Melismata at 8:59 AM on September 16 [51 favorites]
This is fiction, right? Talking about boomers passing wealth on to their kids?
posted by xedrik at 8:59 AM on September 16 [15 favorites]
posted by xedrik at 8:59 AM on September 16 [15 favorites]
In Canada it seems more plausible since the medical industry isn't licking its chops quite so blatantly? In the US I don't know anyone who expects to inherit anything, we're all sure elder care will find a way to drain our parents dry.
posted by potrzebie at 9:06 AM on September 16 [40 favorites]
posted by potrzebie at 9:06 AM on September 16 [40 favorites]
Oh, this Gen Xer is surprised she even owns a home considering her parents sucked at money, never saved money, had debt collectors call our house all hours of the day, and we were never homeowners.
But yes I have met some folks my age or younger who do have the kind of parents who have that kind of non-Bezos wealth and it is absolutely always property-based.
posted by Kitteh at 9:07 AM on September 16 [7 favorites]
But yes I have met some folks my age or younger who do have the kind of parents who have that kind of non-Bezos wealth and it is absolutely always property-based.
posted by Kitteh at 9:07 AM on September 16 [7 favorites]
In Canada it seems more plausible since the medical industry isn't licking its chops quite so blatantly?
They will be in Ontario once Ford privatizes everything!
posted by Kitteh at 9:08 AM on September 16 [3 favorites]
They will be in Ontario once Ford privatizes everything!
posted by Kitteh at 9:08 AM on September 16 [3 favorites]
The problem with all of that wealth in the form of houses is that it is a very limited form of wealth and it's based largely on the fact that all houses have gone up in value by a crazy-making amount.
Once you translate that sold house it into a different house where you actually live, there's a good chance you still have a pretty big mortgage. If you had to to split the money with siblings, a really big mortgage. No question that it's still a huge benefit, but it's not like suddenly you became an actual millionaire because your parents died in a $1.4 million dollar house.
posted by jacquilynne at 9:11 AM on September 16 [10 favorites]
Once you translate that sold house it into a different house where you actually live, there's a good chance you still have a pretty big mortgage. If you had to to split the money with siblings, a really big mortgage. No question that it's still a huge benefit, but it's not like suddenly you became an actual millionaire because your parents died in a $1.4 million dollar house.
posted by jacquilynne at 9:11 AM on September 16 [10 favorites]
So they aren't going to become landlords?
posted by Selena777 at 9:12 AM on September 16 [2 favorites]
posted by Selena777 at 9:12 AM on September 16 [2 favorites]
Well... from what I've seen, albeit anecdotally, is that Boomer wealth is being transferred directly to managed care facilities, nursing homes, etc. usually bankrupting both Boomer and their children.
posted by Freen at 9:15 AM on September 16 [36 favorites]
posted by Freen at 9:15 AM on September 16 [36 favorites]
Well... from what I've seen, albeit anecdotally, is that Boomer wealth is being transferred directly to managed care facilities, nursing homes, etc. usually bankrupting both Boomer and their children.
These companies are owned by people too, though. Dollars to donuts investment and retirement funds own a lot of it, making at least some component of it intra-boomer wealth transfer.
posted by Dysk at 9:21 AM on September 16 [3 favorites]
These companies are owned by people too, though. Dollars to donuts investment and retirement funds own a lot of it, making at least some component of it intra-boomer wealth transfer.
posted by Dysk at 9:21 AM on September 16 [3 favorites]
Can anyone explain this:
Taxes on primary residences, which are a large portion of Canadian inheritances, don’t exist here. There goes a huge chunk of money from the public purse.
I'm not sure how this represents money moving out of the public purse - if it's not taxable now, it was never in the public purse to begin with, and if it is taxable now, I'm not clear on how inheritance would change that.
posted by echo target at 9:25 AM on September 16 [3 favorites]
Taxes on primary residences, which are a large portion of Canadian inheritances, don’t exist here. There goes a huge chunk of money from the public purse.
I'm not sure how this represents money moving out of the public purse - if it's not taxable now, it was never in the public purse to begin with, and if it is taxable now, I'm not clear on how inheritance would change that.
posted by echo target at 9:25 AM on September 16 [3 favorites]
Not happening in the US. Unless your parents drop dead instantly with no warning and family is fabulously wealthy, the medical industry will claw back all the money you're looking to inherit. Hell to even get basic coverage for nursing homes you need to be completely indigent to qualify for Medicaid which means emptying out your accounts to get basic support.
posted by jmauro at 9:43 AM on September 16 [9 favorites]
posted by jmauro at 9:43 AM on September 16 [9 favorites]
In Canada it seems more plausible since the medical industry isn't licking its chops quite so blatantly?
up here, it's the elder care economy. In theory, everybody qualifies for public sector care, payment for which is based on an examination of current income. So it doesn't matter how rich or poor you are, you qualify, you pay what you can. Last I looked, the maximum monthly payment was in the $6000.00 range. Sounds extreme but it's an honest reflection of what the costs really are (for workers, equipment, facilities). And, of course, this is all money that goes into the public system, does all the useful things that public money does.
But there's pretty much always a long waiting list. And even when you get a placement, there's no guarantee it's going to be that close to family, friends etc (just somewhere in the greater jurisdiction).
So it generally works out that if you (or your family) has any money to work with, the private option gets chosen. Which, as I've heard it put, is basically an private industry based on extracting every penny available from your estate and funnelling into the pockets of shareholders. So all that equity your mom and dad worked for all their lives -- as much of it as possible (I've heard of some families paying as much $15,000/month for dear old mom or dad's care) gets extracted before they die. It's a damned crime but we allow it because the vast majority of us don't want to think about getting old, death and dying ... so when the time comes, we don't have a plan. And we certainly haven't campaigned toward strengthening, growing, improving our public options ...
posted by philip-random at 9:44 AM on September 16 [15 favorites]
up here, it's the elder care economy. In theory, everybody qualifies for public sector care, payment for which is based on an examination of current income. So it doesn't matter how rich or poor you are, you qualify, you pay what you can. Last I looked, the maximum monthly payment was in the $6000.00 range. Sounds extreme but it's an honest reflection of what the costs really are (for workers, equipment, facilities). And, of course, this is all money that goes into the public system, does all the useful things that public money does.
But there's pretty much always a long waiting list. And even when you get a placement, there's no guarantee it's going to be that close to family, friends etc (just somewhere in the greater jurisdiction).
So it generally works out that if you (or your family) has any money to work with, the private option gets chosen. Which, as I've heard it put, is basically an private industry based on extracting every penny available from your estate and funnelling into the pockets of shareholders. So all that equity your mom and dad worked for all their lives -- as much of it as possible (I've heard of some families paying as much $15,000/month for dear old mom or dad's care) gets extracted before they die. It's a damned crime but we allow it because the vast majority of us don't want to think about getting old, death and dying ... so when the time comes, we don't have a plan. And we certainly haven't campaigned toward strengthening, growing, improving our public options ...
posted by philip-random at 9:44 AM on September 16 [15 favorites]
My Boomer parents largely disinherited my sister and I and are passing their wealth, largely property-based, to our Gen Z kids.(whatever is left after elder care.) I pray for long life so my 13 yo doesn’t get this pot of money at 19.
posted by warriorqueen at 9:56 AM on September 16 [9 favorites]
posted by warriorqueen at 9:56 AM on September 16 [9 favorites]
Well my silent generation dad had to sell his investments so I don't look to reap the wards of his purchases of large beanie baby quantities and Joey Meyer baseball cards (he once bought his friend a large, IDK 1500? box of his rookie cards that year saying "you are going to be super rich") I think he really believed it. (I mean he bought more than just that, but I think he was hedging his bets)
Joey who?
Exactly.
Also, he was likely on the spectrum (that doesn't excuse not buying a house, but just explains a certain... obsessive mode when he got into things). I'm assuming he could have bought a house but he was unemployed a lot of the time I grew up. So I'm not sure how that would have worked, but it would have been easier than today.
posted by symbioid at 10:02 AM on September 16 [1 favorite]
Joey who?
Exactly.
Also, he was likely on the spectrum (that doesn't excuse not buying a house, but just explains a certain... obsessive mode when he got into things). I'm assuming he could have bought a house but he was unemployed a lot of the time I grew up. So I'm not sure how that would have worked, but it would have been easier than today.
posted by symbioid at 10:02 AM on September 16 [1 favorite]
@echo target "I'm not sure how this represents money moving out of the public purse - if it's not taxable now, it was never in the public purse to begin with, and if it is taxable now, I'm not clear on how inheritance would change that."
I'm reading it as "well, we can't count on this, so there goes that option to consider" Not necessarily saying it was there and now now. Just something you can't count, scratch it off the list of possible sources of revenue. Sorta thing?
posted by symbioid at 10:07 AM on September 16
I'm reading it as "well, we can't count on this, so there goes that option to consider" Not necessarily saying it was there and now now. Just something you can't count, scratch it off the list of possible sources of revenue. Sorta thing?
posted by symbioid at 10:07 AM on September 16
Good article.
The intergenerational stuff - parents giving the kids assistance (the warm hand), transfer of the family house, with parents moving to a granny suite or coach house on the same property, and more intergenerational living - those seem like good things. And I know so many peers who have adult "dependents" - kids who for health or other reasons just didn't get launched into an independent existence. It's been an eye-opener for me; it seems that just about everyone who I grew up with in the 70s and 80s made it out of the parental house as soon as they could.
Mrs C and I made it to comfortable retirement without any substantial parental outlay, besides some housing support during the uni years. Which makes us pretty lucky. I'd be ok with a wealth tax. I think it should be progressive; an estate of less than a million should be taxed at a far lower rate than an estate of 10+ million. And there should be reasonable tax breaks for transferring some money to your children while you're still alive.
We have one remaining parent - reasonably healthy, mentally intact, and entering the 10th decade of life, with a bit of an estate. Of course I'm dreading the inevitable decline and/or demise which will fall to us to deal with. And estate wrangling with somewhat difficult siblings, if there's anything left after care costs. Ugh.
posted by Artful Codger at 10:23 AM on September 16 [4 favorites]
The intergenerational stuff - parents giving the kids assistance (the warm hand), transfer of the family house, with parents moving to a granny suite or coach house on the same property, and more intergenerational living - those seem like good things. And I know so many peers who have adult "dependents" - kids who for health or other reasons just didn't get launched into an independent existence. It's been an eye-opener for me; it seems that just about everyone who I grew up with in the 70s and 80s made it out of the parental house as soon as they could.
Mrs C and I made it to comfortable retirement without any substantial parental outlay, besides some housing support during the uni years. Which makes us pretty lucky. I'd be ok with a wealth tax. I think it should be progressive; an estate of less than a million should be taxed at a far lower rate than an estate of 10+ million. And there should be reasonable tax breaks for transferring some money to your children while you're still alive.
We have one remaining parent - reasonably healthy, mentally intact, and entering the 10th decade of life, with a bit of an estate. Of course I'm dreading the inevitable decline and/or demise which will fall to us to deal with. And estate wrangling with somewhat difficult siblings, if there's anything left after care costs. Ugh.
posted by Artful Codger at 10:23 AM on September 16 [4 favorites]
A lot of boomers bought long term care insurance (my parents did). The insurance companies no longer offer it for new customers because of how much it actually costs them, but wow, am I glad I had such "responsible" parents.
posted by atomicstone at 10:34 AM on September 16 [9 favorites]
posted by atomicstone at 10:34 AM on September 16 [9 favorites]
The problem with all of that wealth in the form of houses is that it is a very limited form of wealth and it's based largely on the fact that all houses have gone up in value by a crazy-making amount.
Once you translate that sold house it into a different house where you actually live, there's a good chance you still have a pretty big mortgage. If you had to to split the money with siblings, a really big mortgage. No question that it's still a huge benefit, but it's not like suddenly you became an actual millionaire because your parents died in a $1.4 million dollar house.
This is the logic that applies to home appreciation during your own lifetime. You need to downsize in some way to recover cash from your house.
But if you are the adult child of boomer parents, living on your own somewhere, and you inherit a piece of real estate worth more than a million dollars, then it's extra money. Absent taxes, splitting with siblings, etc. you sell it and it's just a financial boon. You presumably have your own job, family, and living arrangements; the inheritance is extra stuff.
I know people who've gotten financially stretched trying to hang on to their own family home while still living somewhere else, or they're trying to buy out other family members from their share so they can live there. I'm sympathetic to the sentiment-drive part of this, but it's only a burden in the sense that you have a lot of stuff but want to hang on to even more stuff than you can afford. The middle class equivalent of maintaining Pemberly.
posted by mark k at 10:52 AM on September 16 [7 favorites]
Once you translate that sold house it into a different house where you actually live, there's a good chance you still have a pretty big mortgage. If you had to to split the money with siblings, a really big mortgage. No question that it's still a huge benefit, but it's not like suddenly you became an actual millionaire because your parents died in a $1.4 million dollar house.
This is the logic that applies to home appreciation during your own lifetime. You need to downsize in some way to recover cash from your house.
But if you are the adult child of boomer parents, living on your own somewhere, and you inherit a piece of real estate worth more than a million dollars, then it's extra money. Absent taxes, splitting with siblings, etc. you sell it and it's just a financial boon. You presumably have your own job, family, and living arrangements; the inheritance is extra stuff.
I know people who've gotten financially stretched trying to hang on to their own family home while still living somewhere else, or they're trying to buy out other family members from their share so they can live there. I'm sympathetic to the sentiment-drive part of this, but it's only a burden in the sense that you have a lot of stuff but want to hang on to even more stuff than you can afford. The middle class equivalent of maintaining Pemberly.
posted by mark k at 10:52 AM on September 16 [7 favorites]
> > Well... from what I've seen, albeit anecdotally, is that Boomer wealth is being transferred directly to managed care facilities, nursing homes, etc. usually bankrupting both Boomer and their children.
> These companies are owned by people too, though.
Nope they are increasingly owned by hedge funds. So I doubt there is a wealth transfer happening here except the usual one where wealth is transferred from regular and slightly well-off people to the ultra rich.
posted by MiraK at 10:59 AM on September 16 [18 favorites]
> These companies are owned by people too, though.
Nope they are increasingly owned by hedge funds. So I doubt there is a wealth transfer happening here except the usual one where wealth is transferred from regular and slightly well-off people to the ultra rich.
posted by MiraK at 10:59 AM on September 16 [18 favorites]
Hedge funds/private equity has been also reaping the benefit of quietly snapping up businesses run by those same aging boomers (funeral parlors, dental offices, HVAC, veterinary clinics, etc) at retirement age and looking to cash out.
posted by dr_dank at 11:13 AM on September 16 [8 favorites]
posted by dr_dank at 11:13 AM on September 16 [8 favorites]
Canada is the only G7 country without an inheritance tax.
Canada's 1% is going to make out like bandits.
posted by CheeseDigestsAll at 11:17 AM on September 16 [7 favorites]
Canada's 1% is going to make out like bandits.
posted by CheeseDigestsAll at 11:17 AM on September 16 [7 favorites]
They get to Piketty in the end!
among Canadian boomers who are planning to leave 100 per cent of their estates to their children, the average inheritance will be about $940,000
This number needs a lot more… base rate, or proportion of age cohort in each group, or something. How much concentration are they talking about?
posted by clew at 11:23 AM on September 16 [5 favorites]
among Canadian boomers who are planning to leave 100 per cent of their estates to their children, the average inheritance will be about $940,000
This number needs a lot more… base rate, or proportion of age cohort in each group, or something. How much concentration are they talking about?
posted by clew at 11:23 AM on September 16 [5 favorites]
I remember years ago these think pieces about how will the greatest transfer of wealth over the next 10-20 years impact the economy and society, and now we know - prop up the Ponzi scheme of housing. My husband and I were lamenting, why does everything seem *just* out of reach for us? And how hard it is to “only” pay $1m for a house you’re totally meh about but at least it’s “affordable.” Why does affordability plan hinge on “so one of our parents dies…” and if your parents split or dad hates you well then fuck it sucks to be you, eh?
Maybe I ask for too much. Maybe I am too picky. But at these prices damnit it kills me to go with something entirely meh that I want to renovate instantly.
Also, watching houses sit on the market for months and yet no one thinks… maybe just lower the price? Nope everyone thinks it’s still 2021 or something.
posted by St. Peepsburg at 11:29 AM on September 16 [10 favorites]
Maybe I ask for too much. Maybe I am too picky. But at these prices damnit it kills me to go with something entirely meh that I want to renovate instantly.
Also, watching houses sit on the market for months and yet no one thinks… maybe just lower the price? Nope everyone thinks it’s still 2021 or something.
posted by St. Peepsburg at 11:29 AM on September 16 [10 favorites]
My mom and stepdad, both Silent Generation, liquidated all of their real estate and got a reverse mortgage on a condo unit. So there is no property wealth to distribute. Most assets are in investment accounts, which will be divided among siblings when they both pass. My dad and stepmom sold their house and moved into a rental. When my dad passed he left me a small IRA. I am not making any plans based upon projected inheritance. I am 100% certain that the bulk of anything inheritable will go to my half sister.
The tough part was that my mom told me, growing up, that the house I grew up in would be mine one day. And then they sold it right after I graduated from college. So that was that. I love my old house, and I love visiting the town I grew up in, but I wouldn't want to live there, so it isn't that big of a deal. It was good, I think, to be disabused of the idea that anything was forever at an early-ish age. Everything changes, everything fades.
posted by grumpybear69 at 11:40 AM on September 16 [6 favorites]
The tough part was that my mom told me, growing up, that the house I grew up in would be mine one day. And then they sold it right after I graduated from college. So that was that. I love my old house, and I love visiting the town I grew up in, but I wouldn't want to live there, so it isn't that big of a deal. It was good, I think, to be disabused of the idea that anything was forever at an early-ish age. Everything changes, everything fades.
posted by grumpybear69 at 11:40 AM on September 16 [6 favorites]
Thank you for sharing this. I'm glad I read it.
Katrina Onstad writes:
Katrina Onstad writes:
I call this status fog: how hard it is to know where anyone stands financially, or to recognize what real achievement looks like, when invisible wealth is altering one’s place in society. The markers of a comfortable middle-class life—being able to afford a family vacation or buy a home—appear to exist, but do they actually? It sounds like a tree-falls-in-the-forest-type koan: if the family lounging poolside on their vacay couldn’t pay to be there themselves, is there even a middle class?posted by brainwane at 11:45 AM on September 16 [10 favorites]
Can anyone explain this:
Taxes on primary residences, which are a large portion of Canadian inheritances, don’t exist here. There goes a huge chunk of money from the public purse.
I'm not sure how this represents money moving out of the public purse - if it's not taxable now, it was never in the public purse to begin with, and if it is taxable now, I'm not clear on how inheritance would change that.
Ya that comment struck me as governmental greed. Who says I owe what now?
On top of my income taxes? They can stuff it.
posted by St. Peepsburg at 11:56 AM on September 16
Taxes on primary residences, which are a large portion of Canadian inheritances, don’t exist here. There goes a huge chunk of money from the public purse.
I'm not sure how this represents money moving out of the public purse - if it's not taxable now, it was never in the public purse to begin with, and if it is taxable now, I'm not clear on how inheritance would change that.
Ya that comment struck me as governmental greed. Who says I owe what now?
On top of my income taxes? They can stuff it.
posted by St. Peepsburg at 11:56 AM on September 16
My silent generation mother-in-law died over 18 months ago (my spouse was the last born and is gen-x) and we still don't have probate closed, because fucking CRA is just sitting on the last tax return. I'm sure it'll happen sometime but I'm glad we weren't counting on the inheritance for anything other than reducing our outstanding mortgage. Grrr.
posted by seanmpuckett at 12:02 PM on September 16 [2 favorites]
posted by seanmpuckett at 12:02 PM on September 16 [2 favorites]
I have a lot of feelings about this stuff but I'm a very early Gen-Xer and my first significant financial support from my father since I turned 16 will come in a few months when probate clears.
So if you got it now you might want to support your kids while you are alive because help compounds and so does neglect.
posted by srboisvert at 12:07 PM on September 16 [9 favorites]
So if you got it now you might want to support your kids while you are alive because help compounds and so does neglect.
posted by srboisvert at 12:07 PM on September 16 [9 favorites]
Taxes on primary residences, which are a large portion of Canadian inheritances, don’t exist here. There goes a huge chunk of money from the public purse.
I read that as being potential money which the Canadian government will not receive, in the way that the U.S. government does get.
posted by wenestvedt at 12:16 PM on September 16 [1 favorite]
I read that as being potential money which the Canadian government will not receive, in the way that the U.S. government does get.
posted by wenestvedt at 12:16 PM on September 16 [1 favorite]
I am not Canadian so I can't comment firsthand, but I have been reading the book "Plunder: Private Equity's Plan to Pillage America" by Brendan Ballou (as recommended here on MeFi), and it looks like basically every industry is being systematically sucked dry and destroyed by private equity.
I suspect that the private equity vultures will find a way to snatch every cent they can from the hands of Boomers, Gen-X, and Millenials, before any intrafamily transfer can take place.
I am not even halfway through the book, and it's disturbing my sleep because after I get ready to turn in with a little Kindle Time, I end each night teeth-grindingly angry instead of ready to drift off.
posted by wenestvedt at 12:22 PM on September 16 [8 favorites]
I suspect that the private equity vultures will find a way to snatch every cent they can from the hands of Boomers, Gen-X, and Millenials, before any intrafamily transfer can take place.
I am not even halfway through the book, and it's disturbing my sleep because after I get ready to turn in with a little Kindle Time, I end each night teeth-grindingly angry instead of ready to drift off.
posted by wenestvedt at 12:22 PM on September 16 [8 favorites]
IMO this article was kind of terrible, and relied on half-written stats, incomplete truths, and odd but fear-mongering anecdotes:
Like this one:
"Another adviser worked with a client in her 20s who wanted advice about how to responsibly manage the $400,000 her deceased grandparents had left her. But then the assets were valued and taxes were paid—and the inheritance was a lot smaller than she expected. That $400,000 is expected to shake out closer to $100,000. "
What? This implies both incorrect asset evaluation and some sort of inheritance tax, which it later says Canada doesn't have. That's some high fees!
And this one:
"People from a different class may not feel comfortable in this alien land of the wealthy, and a surprising number of heirs, consciously or unconsciously, lose their inheritances, letting in scammers, making bad investments."
What is a 'surprising number'? Would it 'surprise' you that on average, the number who squander their wealth is less than 10%?
Also, Canada is different from the US, in which only about 20% of US households have an inheritance. It's 60% in Canada, so most households have assets to give via inheritance, with the average per inheritor being only about $100k.
posted by The_Vegetables at 12:43 PM on September 16 [8 favorites]
Like this one:
"Another adviser worked with a client in her 20s who wanted advice about how to responsibly manage the $400,000 her deceased grandparents had left her. But then the assets were valued and taxes were paid—and the inheritance was a lot smaller than she expected. That $400,000 is expected to shake out closer to $100,000. "
What? This implies both incorrect asset evaluation and some sort of inheritance tax, which it later says Canada doesn't have. That's some high fees!
And this one:
"People from a different class may not feel comfortable in this alien land of the wealthy, and a surprising number of heirs, consciously or unconsciously, lose their inheritances, letting in scammers, making bad investments."
What is a 'surprising number'? Would it 'surprise' you that on average, the number who squander their wealth is less than 10%?
Also, Canada is different from the US, in which only about 20% of US households have an inheritance. It's 60% in Canada, so most households have assets to give via inheritance, with the average per inheritor being only about $100k.
posted by The_Vegetables at 12:43 PM on September 16 [8 favorites]
> They will be in Ontario once Ford privatizes everything!
Well the MAID juggernaut is steaming along so it won't be too long before we start seeing columns by very sensible centrists about how it's selfish not to commit suicide while your kids could use that inheritance you've built up.
posted by Space Coyote at 12:52 PM on September 16 [4 favorites]
Well the MAID juggernaut is steaming along so it won't be too long before we start seeing columns by very sensible centrists about how it's selfish not to commit suicide while your kids could use that inheritance you've built up.
posted by Space Coyote at 12:52 PM on September 16 [4 favorites]
Semi-private room in a SNF is $10,000+ a month here in California, add $3000 if you don't want to listen to your roommate's TV all day and night.
My late silent-gen mom saw that coming and noped out of it ~3 years ago now; we'd put in a "Transfer on Death Deed"* so the house was excluded from probate, and since the house was all there was to split up (thanks to Medi-Cal rules) between the siblings things went pretty smooth, financially.
g'pa managed to retire to a 1B in central Washington and live out the last 10 years of his life by himself until the big-C got him, the thought is attractive now that I'm approaching that age.
* inter-sibling transfers don't have Prop 13 protection so don't put siblings on this deed (if you want them off later), in CA at least.
posted by torokunai at 1:12 PM on September 16 [2 favorites]
My late silent-gen mom saw that coming and noped out of it ~3 years ago now; we'd put in a "Transfer on Death Deed"* so the house was excluded from probate, and since the house was all there was to split up (thanks to Medi-Cal rules) between the siblings things went pretty smooth, financially.
g'pa managed to retire to a 1B in central Washington and live out the last 10 years of his life by himself until the big-C got him, the thought is attractive now that I'm approaching that age.
* inter-sibling transfers don't have Prop 13 protection so don't put siblings on this deed (if you want them off later), in CA at least.
posted by torokunai at 1:12 PM on September 16 [2 favorites]
Unless your parents drop dead instantly with no warning and family is fabulously wealthy, the medical industry will claw back all the money you're looking to inherit
I can tell you that this is exactly my (slightly pre-boomer) parents’ plan. Apparently their latest medical checks ended with the doctor saying “statistically, something will probably come out of nowhere and just snuff you out” and wow they were positively giddy to hear that. Which was super disturbing, but as someone who’s thought about what I would do given a grim medical prognosis — namely file immediately for divorce in order to shed all my worldly assets — I can’t say I don’t get where they’re coming from.
posted by bjrubble at 1:18 PM on September 16 [1 favorite]
I can tell you that this is exactly my (slightly pre-boomer) parents’ plan. Apparently their latest medical checks ended with the doctor saying “statistically, something will probably come out of nowhere and just snuff you out” and wow they were positively giddy to hear that. Which was super disturbing, but as someone who’s thought about what I would do given a grim medical prognosis — namely file immediately for divorce in order to shed all my worldly assets — I can’t say I don’t get where they’re coming from.
posted by bjrubble at 1:18 PM on September 16 [1 favorite]
My parents burned through their modest savings through their heavy medical expenses, so no inheritance here. A friend just got more than $1M cash from his mom's estate to add to his Ms in the bank. So it goes.
Frankly, my mom was so...loopy towards the end that even if she had been healthy whatever little they had would have been transformed into the hands of scammers and Franklin Mint "collectibles".
In my experience, the parents of my Gen X friends who have inherited anything did so because one or both parents had pensions (remember those?) from careers at big companies, or 20+ years of military service or working for the government, to fund their retirements and pay for good health insurance. Also, it helps, a lot, to not move constantly if you can avoid it, not sure my parents ever lived in one place for more than a few years (by choice).
Then again, parents have no obligation to pass wealth on to their progeny. It's nice, but it's also their money. (Frankly the ones I don't understand are those who die with no offspring and piles of money.)
posted by maxwelton at 1:26 PM on September 16 [1 favorite]
Frankly, my mom was so...loopy towards the end that even if she had been healthy whatever little they had would have been transformed into the hands of scammers and Franklin Mint "collectibles".
In my experience, the parents of my Gen X friends who have inherited anything did so because one or both parents had pensions (remember those?) from careers at big companies, or 20+ years of military service or working for the government, to fund their retirements and pay for good health insurance. Also, it helps, a lot, to not move constantly if you can avoid it, not sure my parents ever lived in one place for more than a few years (by choice).
Then again, parents have no obligation to pass wealth on to their progeny. It's nice, but it's also their money. (Frankly the ones I don't understand are those who die with no offspring and piles of money.)
posted by maxwelton at 1:26 PM on September 16 [1 favorite]
bjrubble, did they say the response was about money, or were they considering it from the standpoint of preference when it comes to rate of physical/psychological decline?
posted by Selena777 at 1:31 PM on September 16
posted by Selena777 at 1:31 PM on September 16
Well the MAID juggernaut is steaming along
The MAID juggernaut let my mother choose the timing of her death after a year of suffering the ravages of terminal breast cancer and I am so thankful for it giving her that escape. Unfortunately my father was senile and neither able nor allowed to make that choice and got to spend at least the last year of his life with no real significant consciousness and he wasted away until he got aspiration pneumonia and died (fill out your living will if you want to avoid this fate). One of the last things he said about 4 years ago during a period of lucidity was "This is the part of growing old no one looks forward too".
I'll take a juggernaut of mercy and self-determination over forced suffering anyday.
posted by srboisvert at 1:48 PM on September 16 [14 favorites]
The MAID juggernaut let my mother choose the timing of her death after a year of suffering the ravages of terminal breast cancer and I am so thankful for it giving her that escape. Unfortunately my father was senile and neither able nor allowed to make that choice and got to spend at least the last year of his life with no real significant consciousness and he wasted away until he got aspiration pneumonia and died (fill out your living will if you want to avoid this fate). One of the last things he said about 4 years ago during a period of lucidity was "This is the part of growing old no one looks forward too".
I'll take a juggernaut of mercy and self-determination over forced suffering anyday.
posted by srboisvert at 1:48 PM on September 16 [14 favorites]
the fun thing about this is that any wealth that does move from boomers to millennials will only entrench existing generational wealth issues, meaning that queer millennials, immigrant millennials, poc millennials, etc., will not get to benefit from any of it!
it's SO GREAT to know that the meek will not inherit the earth either
posted by i used to be someone else at 1:52 PM on September 16 [3 favorites]
it's SO GREAT to know that the meek will not inherit the earth either
posted by i used to be someone else at 1:52 PM on September 16 [3 favorites]
But if you are the adult child of boomer parents, living on your own somewhere, and you inherit a piece of real estate worth more than a million dollars, then it's extra money. Absent taxes, splitting with siblings, etc. you sell it and it's just a financial boon. You presumably have your own job, family, and living arrangements; the inheritance is extra stuff.
Yes, I'm absolutely not denying it's a financial boon, but if you are the adult child of boomer parents and you can't afford a house now based on your job, family and living arrangements, it might or might not allow you to, because the same crazy ass housing prices that made their house valuable means the house you want to buy will also be crazy ass expensive, that's all I'm saying.
posted by jacquilynne at 2:00 PM on September 16 [2 favorites]
Yes, I'm absolutely not denying it's a financial boon, but if you are the adult child of boomer parents and you can't afford a house now based on your job, family and living arrangements, it might or might not allow you to, because the same crazy ass housing prices that made their house valuable means the house you want to buy will also be crazy ass expensive, that's all I'm saying.
posted by jacquilynne at 2:00 PM on September 16 [2 favorites]
Nope they are increasingly owned by hedge funds. So I doubt there is a wealth transfer happening here except the usual one where wealth is transferred from regular and slightly well-off people to the ultra rich.
Well firstly, a lot of the ultra wealthy are in fact boomers. Secondly, pension funds have 30% ownership of hedge funds in aggregate, so a portion of it is indeed regular old boomer to boomer transfer.
posted by Dysk at 2:41 PM on September 16 [3 favorites]
Well firstly, a lot of the ultra wealthy are in fact boomers. Secondly, pension funds have 30% ownership of hedge funds in aggregate, so a portion of it is indeed regular old boomer to boomer transfer.
posted by Dysk at 2:41 PM on September 16 [3 favorites]
My previous comment was super USA centric, but my Canadian (immigrants to US when my dad was a kid) grandparents double dipped (legally) Canadian and US Social Security, to which they were entitled. It's what kept them afloat in their "retirement".
posted by atomicstone at 2:41 PM on September 16
posted by atomicstone at 2:41 PM on September 16
IANYL, but i've got some insights from 10+ years of estates law practice in canada, so to weigh in with a few observations:
- there are "probate" taxes across the provinces, last I checked Ontario has the highest with 1.5% of the value of the estate going to the province (First 50k isn't taxed) if you need a grant of probate from the courts. my american lawyer relatives say this is far, far, more in estate taxes than is regularly paid, but ymmv.
- the shortage of elder care options is going to destroy a ton of this wealth before it reaches kids/grandkids. in the months or years that people are waiting for a bed in a facility, they destroy the value of their home because they're unable to maintain it. their investments are burned on more expensive private home care, or are lost to scammers or financial services that churn files and inflict a death of a thousand cuts.
- the boomer's investment wealth also comes with a massive asterisk, because a lot of them (RRSPs, RIFs) get taxed as income of the deceased in the year of death. this can regularly lead to 30-45% of the investment going to income tax.
-the only sub 40 year old first time home buyers i see who DON'T have a parent or two on title are in the well-paying trades.
-estates selling homes get substantially less than a lived in home. the real estate agent then takes usually 5% plus sales taxes
-if you then take the money you inherited and buy land in Ontario, there's a land transfer tax that eats about 1.5%, doubling that if you're in the GTA.
so yeah - the rich will keep on getting richer. structural inequalities will be exacerbated. most of those inheriting from boomers will get a lot less than they thought. there's a difference between price and value, and whether or not canadian society can be taught that lesson will be very painful to figure out.
posted by LegallyBread at 3:11 PM on September 16 [13 favorites]
- there are "probate" taxes across the provinces, last I checked Ontario has the highest with 1.5% of the value of the estate going to the province (First 50k isn't taxed) if you need a grant of probate from the courts. my american lawyer relatives say this is far, far, more in estate taxes than is regularly paid, but ymmv.
- the shortage of elder care options is going to destroy a ton of this wealth before it reaches kids/grandkids. in the months or years that people are waiting for a bed in a facility, they destroy the value of their home because they're unable to maintain it. their investments are burned on more expensive private home care, or are lost to scammers or financial services that churn files and inflict a death of a thousand cuts.
- the boomer's investment wealth also comes with a massive asterisk, because a lot of them (RRSPs, RIFs) get taxed as income of the deceased in the year of death. this can regularly lead to 30-45% of the investment going to income tax.
-the only sub 40 year old first time home buyers i see who DON'T have a parent or two on title are in the well-paying trades.
-estates selling homes get substantially less than a lived in home. the real estate agent then takes usually 5% plus sales taxes
-if you then take the money you inherited and buy land in Ontario, there's a land transfer tax that eats about 1.5%, doubling that if you're in the GTA.
so yeah - the rich will keep on getting richer. structural inequalities will be exacerbated. most of those inheriting from boomers will get a lot less than they thought. there's a difference between price and value, and whether or not canadian society can be taught that lesson will be very painful to figure out.
posted by LegallyBread at 3:11 PM on September 16 [13 favorites]
Another complete failure on the governing class's part. Many of the particulars are detailed above. A friend of mine worked in a retirement home in eastern Ontario in the last decade. He worked on the activities side of the home. His managers constantly pressured him to upsell residents on services and to persuade residents to sign up to fun and, for the company, profitable activities. He said the managers knew whom amongst the residents could be pressured into buying more because the managers had access to the residents' financial information. It just puts a different face on retirement homes when you know that they are feral institutions devoted to sucking the people in their care of all the money possible before the residents die.
I wonder what this will do from a historical perspective. Society has trundled on for thousands of years by transferring family wealth down the generations. Now, in a few short generations, families will have their inheritances taken by retirement home owners. Isn't this something politicians should be concerning themselves about?
posted by SnowRottie at 6:10 PM on September 16 [4 favorites]
I wonder what this will do from a historical perspective. Society has trundled on for thousands of years by transferring family wealth down the generations. Now, in a few short generations, families will have their inheritances taken by retirement home owners. Isn't this something politicians should be concerning themselves about?
posted by SnowRottie at 6:10 PM on September 16 [4 favorites]
I wonder what this will do from a historical perspective. Society has trundled on for thousands of years by transferring family wealth down the generations. Now, in a few short generations, families will have their inheritances taken by retirement home owners. Isn't this something politicians should be concerning themselves about?
Say what? The idea that most people would have meaningful wealth to give their offspring is very, very recent indeed. The Post did a deep dive with a lot of data recently about the state of things in America. It looks like a bit more than 20% now inherit something, and apparently the number of people inheriting from their parents has doubled over the last 30 years, which supports the idea that this is not an ages-old phenomenon that most people would have experienced. Inheritance is also one of the greatest drivers of wealth inequality (60% according to this article).
We have an issue where people are living longer, but still need care in those final years. Care is expensive. Should we make sure it is properly managed and not exploitative? Yes, absolutely. But it has to be paid for by someone, and I'm personally skeptical that you can decrease the cost of such human-intensive care by enough to make it "affordable". It must be paid for and needs to be available to everyone who needs it, so we have to figure out how we're going to do that. So, let's tax the rich to do it! And if you have an inheritance to potentially hand down, you are the rich. I know it sucks, but if only 20% of people are in this situation, that's absolutely the case.
It seems very incongruous to me that many very otherwise progressive tax the rich people forget that these large inheritances are exactly "the rich" who should be taxed! It seems good to be using the money that people saved for their retirement and old age to pay for their retirement and old age, while having provisions to ensure that those who cannot pay are still cared for.
posted by ch1x0r at 9:03 AM on September 17 [8 favorites]
Say what? The idea that most people would have meaningful wealth to give their offspring is very, very recent indeed. The Post did a deep dive with a lot of data recently about the state of things in America. It looks like a bit more than 20% now inherit something, and apparently the number of people inheriting from their parents has doubled over the last 30 years, which supports the idea that this is not an ages-old phenomenon that most people would have experienced. Inheritance is also one of the greatest drivers of wealth inequality (60% according to this article).
We have an issue where people are living longer, but still need care in those final years. Care is expensive. Should we make sure it is properly managed and not exploitative? Yes, absolutely. But it has to be paid for by someone, and I'm personally skeptical that you can decrease the cost of such human-intensive care by enough to make it "affordable". It must be paid for and needs to be available to everyone who needs it, so we have to figure out how we're going to do that. So, let's tax the rich to do it! And if you have an inheritance to potentially hand down, you are the rich. I know it sucks, but if only 20% of people are in this situation, that's absolutely the case.
It seems very incongruous to me that many very otherwise progressive tax the rich people forget that these large inheritances are exactly "the rich" who should be taxed! It seems good to be using the money that people saved for their retirement and old age to pay for their retirement and old age, while having provisions to ensure that those who cannot pay are still cared for.
posted by ch1x0r at 9:03 AM on September 17 [8 favorites]
It was over when they let the private equity/"shareholder value maximizers" into healthcare. Citizens' United was the path to the corporate takeover of politics.
posted by Sphinx at 10:04 AM on September 17 [1 favorite]
posted by Sphinx at 10:04 AM on September 17 [1 favorite]
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posted by tclark at 8:58 AM on September 16 [22 favorites]