A negative inheritance is a net loss of assets arising from the cost of caring for elderly members of one’s family. The cost of care is increasing rapidly, but that is simply a measure of the time and labor intensive nature of caring for the elderly. For some families, particularly those most devoted to the care of their aging parents, the time and expense of caring for oldest generation will outstrip the assets that are passed to the caregivers.

The decision to provide such care is not simply or even primarily a financial one. Indeed, as this columnist observes:

[A]s taxing as caring for declining parents can be — both to the pocketbook, and also the caregiver’s emotional health — a supermajority 91 percent of boomers report being “generally pleased to be helping their parents,” according to a survey by Putnam Investments, a unit of Power Corp. of Canada.

Approaching a family relationship, particularly the care of one’s parents in their declining health, from a purely financial perspective would be a mistake. But at the same time, waiting for a crisis and assuming a financially debilitating role by default is no less of a mistake. And yet, this is precisely what often occurs:

In families that don’t address these scenarios before they arise, a robust body of work by researchers suggests the bulk of caregiving responsibilities almost invariably falls to one child; according to the Putnam survey, the buck will typically stop at the desk of an “alpha child, most often daughter.” And when the job of caring for mom and dad does fall, ad hoc, on certain siblings, the ensuing tension and resentment “can tear families apart,” says John D. Smith, a wealth manager at Balasa Dinverno & Foltz LLC.

The job of an elder law attorney is to simplify the financial questions that arise in these circumstances in order to free the family to pursue the care-giving arrangement most suitable to the circumstances. Planning ahead for not only the financial crises, but also the time commitment of caregiving can prevent or minimize stress and financial strain. When a parent reaches a health crisis, it is an overwhelmingly stressful time for the entire family. Long term care insurance or an asset protection estate plan or both can help control the financial component of the puzzle and create opportunities for more effective decision-making for the benefit of all involved.

UPDATE: The link above had expired. The link has been updated with a reference provided by Neil Hendershot. HT: PA Elder, Estate and Fiduciary Blog.