Many families rush to divide inheritance, forgetting that the other parent is still alive

After the passing of a father or mother, the first thing many families discuss is not care, but inheritance. Should the house be sold? How should the savings be divided? How much will each sibling receive? Should they abandon inheritance? Some even start discussing whether they should transfer the property early to avoid future disputes.

These questions are important, but in a super-aged society, they are often not the most important ones. What truly needs to be considered is the future life of the other parent who is still alive, for the next ten or twenty years. The departure of the first parent is actually a significant challenge.

What remains is a parent who is advancing in age and may need companionship, medical care, and long-term care. If everyone's focus is on how the inheritance should be divided, it is easy to overlook the person who truly needs to be protected and is still living in this family.

Super-aged society changes the way families inherit 40 to 50-year-olds become the core role of family care

In 2025, Taiwan will officially enter a super-aged society, meaning that one out of every five citizens will be 65 years old or older. Reviewing the process of population aging, Taiwan entered an aging society in 1993, an aged society in 2018, and will enter a super-aged society in 2025, completing this transition in just seven years, with the aging speed ranking at the top globally. This data represents not only an aging population but also that increasingly more families will go through the same life stage: the first parent leaves, and the other parent enters the final few years of life alone.

Another rapidly increasing but less discussed group is the middle-aged generation of 40 to 50 years old. These people are mostly children of the post-war baby boom generation and are currently in the heaviest stage of life responsibilities, bearing the heaviest burdens of mortgage payments, family expenses, and children's education. It is also the most important time for family care and inheritance of assets.

In the past, when we talked about inheritance, it was mostly about inheritance, taxes, gifts, or the order of inheritance. In the future, what truly needs to be discussed is whether the other parent is still suitable for living alone, whether they should move in with their children or live in a residence suitable for care, whether their retirement funds and savings are sufficient to cover living and medical expenses, if they need to hire a foreign caregiver, who will bear the annual care costs of tens of thousands of dollars, and how to arrange care methods and financial sources if they face dementia or disability in the future?

These questions have no standard answers and cannot be considered only after the inheritance is completed. Because in a super-aged society, what comes first is not how the property is divided, but how the care responsibility is shared, how the living resources are continued, and how the family members jointly face the long-term care needs in the future.

Inheritance can be evenly divided, but care can never be evenly divided

Many people think that evenly dividing property is fair. However, taking care of parents is something that can never be evenly divided. Someone lives nearby and is responsible for accompanying them to medical appointments, someone with better economic ability pays for medical and living expenses, and someone else is responsible for contacting the hospital, hiring caregivers, and handling administrative procedures. But due to work or family reasons, someone may not be able to accompany them for a long time and can only provide other assistance. There is no method that is more valuable than another. What truly causes family conflicts is not who contributes more, but that they have never discussed how each person's contributions should be understood. Many siblings who have always had a good relationship start to develop cracks in their relationship in their parents' later years, not because of the house, but because the person who has been picking up and dropping off medical appointments every day for ten years feels that their contributions are not seen, the person who has been paying expenses for a long time feels that the economic pressure is only on themselves, and the person who has not participated in care thinks that since they inherit equally by law, it is fair. Thus, what truly causes siblings to lose trust in each other is not inheritance, but the care costs that have never been spoken out loud.

After the first parent leaves, what truly needs to be preserved is not the inheritance, but the life of the other parent

Many families, after the first parent passes away, immediately sell the house and divide the savings, hoping to complete the inheritance procedures as soon as possible. However, such arrangements may not be suitable for every family. Because the other parent may still have twenty years of life ahead, what they need in the future is not just a place to live, but also continuous cash flow, medical insurance, and the ability to face long-term care risks. If the assets are divided too early, it may seem that the inheritance has been completed, but it may cause the still-living parent to lose the most important economic security. Once in the future, long-term care, hiring caregivers, or living in a care institution is needed, the family will still have to raise funds again. At that time, what the siblings will discuss will no longer be inheritance, but who will pay, who will take care, and who will give up work to accompany the parent. The inheritance arrangement that was originally intended to avoid conflict ultimately becomes the beginning of a new conflict.

Low birth rates turn care from family division of labor into one person's responsibility

Population aging is the first challenge of a super-aged society, and low birth rates are the second challenge. In the past, it was not uncommon for a family to have four or five siblings. After the parents grew old, the care, companionship, and economic burden could be divided among them. Nowadays, one or two children have become the norm, and there are even many families with only one child. This means that the responsibility that was once shared by a family is now likely to fall on one or two people.

On the other hand, the average lifespan continues to extend, and medical technology allows people to live longer, which also makes the care time for chronic diseases, dementia, and disability longer and longer. In the past, caring for parents might be a matter of three or five years. Now, ten years, fifteen years, or even twenty years are no longer rare cases. Many people, when planning for retirement, will estimate living expenses, medical expenses, and caregiver expenses, but rarely will they include another cost: the time cost of the caregiver.

In order to accompany their parents to medical appointments, some people give up promotions, some retire early, some are affected by income due to long-term leave, and some invest the funds they originally prepared for retirement into their parents' medical and long-term care expenses. Therefore, what truly consumes a family is not just the long-term care costs, but the entire family's financial ability for the next twenty years. For this reason, Taiwanese society often says "long-term illness without filial piety," but what truly exhausts people is not filial piety, but in the absence of planning, a family simultaneously bearing the pressures of care, economics, and emotions, ultimately leaving every family member exhausted.

Super-aged society needs to re-establish the correct financial concept

In the past, when talking about asset management, it was mostly about how to allocate stocks, funds, bonds, or real estate. But after the super-aged society, what families truly need to manage is not just assets, but the entire family's cash flow and care ability for the next twenty years.

A complete family asset management can start by establishing four accounts.

Parents' retirement life account

The purpose of this fund is not to leave it to the children, but to ensure that the parents, while still alive, have a stable quality of life and basic cash flow, and do not need to reduce their living standards due to economic pressure.

Medical and long-term care account

Medical and care needs cannot be predicted, but they can be prepared in advance. When a family has already reserved the relevant resources, if they encounter major illnesses or long-term care needs in the future, they will not have to hastily sell assets or suddenly impose a huge economic burden on their children.

Family inheritance account

This is not just inheritance, but also includes wills, insurance, trusts, and other legal tools, making the transfer of future assets clearer and more transparent, and reducing the gaps between siblings due to information asymmetry.

Finally, and most easily overlooked, is the children's own retirement account. Many older children exhaust all their efforts to take care of their parents but forget that they will also grow old. If the retirement funds of the previous generation are insufficient, it is the retirement preparation of the next generation that is exhausted. Twenty years later, the next generation may face the same problem. In this way, the pressure of care will continue from generation to generation. A truly good inheritance is not leaving all resources to the next generation, but ensuring that each generation has the ability to take care of themselves and retain the ability to take care of their families.

Therefore, the super-aged society changes not only the population structure but also the core thinking of asset management. A truly mature inheritance is, after the first parent leaves, first taking care of the other parent who is still alive, leaving sufficient living security and respecting every care and contribution, because the endpoint of asset management has never been the transfer of assets, but ensuring that a family has the ability to choose their life at every stage of life.

（Author: Yongcheng Asset Management Office Financial Advisory Team）

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