The Aging of Estate Planning

It's a perennial estate-planning problem with a 21st-century twist:

Mom has money. Daughter, the potential heiress, is a serial spender and needs the protection of a trust. So Mom puts a trust for daughter into her will. But Daughter talks Mom into writing a new will, one that allows her to inherit outright.

The twist: Mom must be in her 80's at the least. Daughter, a grandmother, is sixty-something. Her son, Jeff Opdyke, tells the story in his Sunday Journal column:

During the dust-up over the altered will, I talked to my mom several times to understand why she wanted the will changed. What I heard is the same confused tension echoed in my interviews with retirees around the country.

Part of her is terrified about the years to come. "I will probably live for another 20 years, and how will I pay for that?" she asked me. She realizes that the money my grandmother leaves behind is the final drop of cash in the spigot she has drawn from for much of her adult life. As such, she knows the best strategy is to stretch this last allotment for as long as she can…. Yet that permanent income stream is at odds with my mom's desire to live a better life today.

Indeed, even as my mom was questioning how to pay for another 20 years, she was arguing against the trust, saying it prevented her from accessing the entire lump sum. "What if I die without having spent the money?" she asked. The implication was clear: She will have wasted a grand consumer opportunity if she dies and there's still money sitting in some trust.

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My mom says that it all basically revolves around a "fear of lack. You fear not having money to live life in the long term, but you also fear not having what you want in life in the short term. And I don't know how to balance that."

As aged heirs and heiresses become increasingly common, those who cannot be expected to handle their windfalls pose a problem. Ditsy young heirs who blow it all can be asked to take care of themselves (Get a job, kid!). Spendthrift senior citizens are likely to look to their adult children for funding. As Opdyke points out, that is not a happy prospect:

I fear I will become my mother's banker. And while I will always make sure my mother isn't destitute, I don't want to take away from my own family's well-being in the future so that my mother can live beyond her means at the moment.