Your Inheritance Might Not Be What You Think

For decades, “leaving something behind” has been the quiet promise built into a lifetime of saving. But a growing body of evidence — including a recent Globe and Mail column by personal finance writer Rob Carrick — suggests that promise is getting harder to keep.

The Myth of the Low-Spending Final Years

Many families assume that spending naturally tapers off in retirement — smaller homes, fewer trips, simpler lives. And for a while, that’s often true. But late in life, the curve can bend sharply upward again. Mobility issues, cognitive decline, and chronic illness bring a wave of new costs: home care aides, assisted living, memory care, medical equipment, and renovations to make a house livable for someone who can no longer manage stairs or live alone.

Carrick’s column makes a pointed observation: nothing erodes a family’s wealth faster than the cost of extended care for aging parents. It’s a cost most people underestimate — right up until it isn’t optional anymore.

A Gift That Becomes a Loan

Here’s the twist that matters most for estate planning: money given to adult children early, without factoring in future care costs, can quietly turn into something else entirely. What starts as a generous gift — the classic “give with a warm hand” approach — can end up functioning more like a loan. If parents run through savings on care later, adult children often step back in, this time contributing their own time and money to support them. The gift comes full circle, except now it costs more than it gave.

This isn’t a reason to stop gifting or planning. It’s a reason to plan with this risk built in, rather than discovering it after the fact.

What This Means for Your Estate Plan

A few practical shifts worth considering:

• Model a longer, costlier “final chapter.” Don’t just plan for retirement — plan for a possible decade (or more) of rising care costs near the end of life.
• Separate “living gifts” from the core estate. If you want to gift money early, ring-fence it from funds earmarked for potential care needs, rather than treating the whole nest egg as one flexible pool.
• Talk about it explicitly. Families rarely discuss what happens if care costs eat into the inheritance. A short, honest conversation now avoids resentment and confusion later.
• Revisit your will and power of attorney documents regularly. Care needs, costs, and family circumstances change — your documents should keep pace.
• Consider long-term care insurance or a dedicated care fund, where it makes sense, so a single stretch of poor health doesn’t have to consume the whole estate.

The Bottom Line

The “Great Wealth Transfer” narrative — the idea that trillions will smoothly pass from one generation to the next — often skips over this reality: a meaningful chunk of that wealth may get spent on care before it ever transfers at all. Planning honestly for that possibility, rather than assuming a tidy inheritance at the end, is one of the most valuable things a family can do together.

Source: Rob Carrick, “Your inheritance is cancelled – mom and dad need the money for care,” The Globe and Mail, August 2026.

The difference between Designated Beneficiaries and Contingent Beneficiaries