The biggest inheritance mistakes seniors make

The rapid population growth of Baby Boomers across North America is a well-documented phenomenon, but it’s not just demographics that will change as a result of the aging population: economics will also be significantly impacted.

In the next 40 years, more than 40 trillion dollars of intergenerational wealth transfer will occur in the United States alone in the form of inheritances and estates as millions of Baby Boomers and Generation X’ers retire and pass money on to their children.

If you are a Baby Boomer looking to wind down your career in the coming months or years, it’s not just retirement you should start thinking about, but also the financial assistance or legacy you plan to leave to your children or favorite organizations and charities.

Ruth Nemzoff, a resident scholar with the Brandeis Women's Studies Research Center, told the most important step for retirees is to speak to their children about what their intentions are with their estate planning.

Money“If children are to be responsible adults they need to plan, not only for their future, but for that of their parents and their children,” Nemzoff said. “Children need to know in advance what money to count on or not count on.”

There are also tax and legal issues to consider when planning for one’s estate.

Ozeme Bonnette, owner of Tri-Quest Investment Advisors, based in Fresno, California, told that estate planning requires careful consideration and legal preparation.

“Loved ones who are not blood relatives can be left out of the estate division if they are not identified in the will,” Bonnette said. “Blood relatives will get priority in court if there is no will to state that these individuals are intended beneficiaries of a portion of the estate.”

She added that some individuals can also be excluded from the will, but the legal documents have to be specific.