Adult children have historically expected to inherit from their parents while in their 40s or 50s, yet now many aren’t doing so until their 70s or even 80s, as their parents live into their 90s or beyond.

When should you expect to receive your inheritance?

According to the Social Security Administration, a 65-year-old man now has a life expectancy of 84, and a 65-year-old woman about 87. These increases in longevity have created changes in financial planning—like retirement calculations and long-term care insurance costs. However, as a Barron's article titled "When Longevity Upends Trusts" notes, these numbers are just beginning to affect trusts and estates.

If you don’t think about this, it could create a lot of issues, the original article cautions. For example, there are some children who are still waiting for their inheritance at age 80! The conflict is between this generation’s expectation of inheritance and the older one’s financial needs later in life. Trusts created years ago in many instances didn’t plan for a 90-plus lifespan or the medical costs associated with it. In addition, another wrinkle (sorry!) are divorces and remarriages. These can result in a second spouse and children of the first spouse being close to the same age, and perhaps at odds over inheritances that may take even longer to pass to the children’s generation.

The original article also mentions a case in which the parent had an accident and the adult child, who was a beneficiary of his trust, called for paramedics, probably saving the parent’s life. The trust eventually terminated before the parent’s death, and several million dollars went into his estate and to the widow (who wasn’t the beneficiary’s mother!), creating some real hard feelings for him, as he had really developed an entitlement to the assets.

One way to address these longer life spans in creating a trust is to just give more outright while you’re alive, instead of gumming everything up in trusts for after you pass. With the annual gift exclusion at $14,000 per beneficiary, per spouse, a couple with three kids and five grandkids could give up to $224,000 a year tax-free.

Another approach suggested in the original article is to provide for staggered payout dates, since some trusts permit partial payouts when beneficiaries reach certain ages or other milestones. A nice thing about trusts is that they can be written to permit some flexibility.

Find out more about trusts by speaking with an experienced estate planning attorney.

Reference: Barron's (November 29, 2014) "When Longevity Upends Trusts"