Why Some German Retirees Are Spending Their Children’s Inheritance
A quiet shift is taking place in German retirement planning. More retirees are choosing to spend down their assets while they are alive rather than leave money to their children. Financial publications have given the trend a shorthand name: the SKI phenomenon.
The care bill arrives first
Survey data cited by the German news site Bürger & Geld show a divided picture. Roughly one in four older people said they want to use up their own wealth in retirement. Just over 60 percent still plan to pass at least part of it on to children or grandchildren. But 41 percent expect spending on health and long-term care to leave no inheritance at all.
Long-term care is the main financial force. German care insurance pays only part of the bill. According to an analysis by the Association of Substitute Health Insurance Funds (Verband der Ersatzkassen), care home residents now pay an average of 3,364 euros per month out of their own pocket in the first year, 256 euros more than a year earlier. That creates a direct trade-off: money spent on care is money that will not reach the next generation.
A choice protected by law
German law leaves the decision open. Children have no legal claim to an inheritance, and retirees are free to spend their wealth before they die. There are limits, though. If someone later falls into financial need, a gift can be reclaimed under Section 528 of the Civil Code. Children are only required to contribute to a parent’s care costs under Section 94 of the Social Code once the child’s annual gross income exceeds 100,000 euros. Even then, the estate can still shrink after death: if the social welfare office paid for care in the final years, it can claim reimbursement from the estate.
What this means for families
The legal backdrop changes the family conversation. Retirees who once expected to pass on a house or savings now face a different question: who should carry the cost of old age? For a growing number, the answer is they themselves. The practical effect is not only smaller inheritances but also a stronger need for adult children to plan their own finances without counting on a windfall.
The SKI label may be new, but the underlying calculus is simple. When a month of care costs thousands of euros, preserving an inheritance becomes a luxury not every family can afford.