You probably check your investment accounts regularly. You notice when gas prices jump or your grocery bill climbs. But there's one area where inflation does its damage quietly, behind the scenes, where most people never look: your estate plan.
If you created your estate plan five, ten, or twenty years ago, it may no longer protect your family the way you intended. The documents sitting in your file cabinet were built for a different economic reality—one where homes cost less, nursing care was more affordable, and your assets had different values.
Let me share what I've seen happen to families who didn't realize inflation was slowly dismantling their carefully crafted plans.
The Hidden Threat to Your Family's Future
I'll never forget meeting with Margaret, a widow who came to our office in 2023. Her husband had passed away two years earlier, and she was now revisiting everything she had in place. They'd worked with an attorney in 2008 to create what seemed like a solid plan.
But when we reviewed the documents, we discovered a few issues. Her husband's documents left "$50,000 to each of our three grandchildren for college." In 2008, that seemed generous. But by 2023, with college costs having nearly doubled, that $50,000 barely covered two years—not the four-year education her husband had envisioned.
Margaret was heartbroken. "He wanted to give them a real head start," she told me. "This isn't what he meant at all."
Unfortunately, Margaret's story isn't unique. Here are nine ways inflation may be quietly destroying your estate plan right now.
9 Ways Inflation Undermines Your Legacy
1. Fixed Dollar Bequests Lose Their Meaning
When you wrote "I leave $25,000 to my favorite charity" in 2010, that donation had real impact. Today, after years of inflation, that same $25,000 has lost about 48% of its purchasing power. Your intended generosity gets cut nearly in half—not because you changed your mind, but because the dollars changed their value.
The same thing happens with gifts to family members, friends, and organizations you care about. The numbers stay the same on paper, but their real-world impact shrinks every year.
2. Life Insurance Coverage Falls Short
James and Linda bought a $500,000 life insurance policy in 2000 to provide for their family. At the time, that seemed like plenty. But when James passed away in 2024, Linda discovered that $500,000 didn't go nearly as far as they'd planned.
The mortgage payoff took more than expected. College costs for their youngest daughter had skyrocketed. Daily living expenses had climbed steadily year after year. What once seemed like a generous safety net had become barely adequate.
3. Guardian Provisions Become Inadequate
If your estate plan includes provisions for raising minor children or grandchildren, check the dollar amounts. A stipulation to provide "$2,000 per month" for a child's care might have worked in 2015. But in 2025, with the cost of housing, food, healthcare, and childcare all substantially higher, that $2,000 doesn't stretch nearly as far.
Your carefully calculated provision may leave guardians struggling to provide the quality of care you intended.
4. Trust Distributions Don't Match Today's Reality
Trusts often include specific distribution schedules: "$3,000 per month for living expenses" or "$50,000 at age 25 for a first home down payment." These seemed reasonable when you created the trust. But inflation changes everything.
That $3,000 monthly distribution may not cover basic living expenses anymore. And $50,000 for a down payment? In many markets, especially in Minnesota and Florida, that's no longer enough for even a modest starter home.
5. Estate Settlement Costs Exceed Expectations
Probate fees, attorney costs, executor fees, final medical bills, funeral expenses—all of these have increased dramatically. If your plan allocated specific amounts to cover these costs, those allocations are probably outdated.
I recently worked with a family in Minnetonka whose father's estate plan from 2012 had allocated $15,000 for "final expenses and estate administration." The actual costs in 2024? Over $35,000. The shortfall created stress and conflict among family members at an already difficult time.
6. Power of Attorney Gifting Limits Become Obsolete
Many powers of attorney include language like "my agent may make annual gifts up to $15,000 per person." That was the federal gift tax exclusion years ago. But as that exclusion has increased (it's $18,000 in 2024 and $19,000 in 2025), your document may prevent your agent from executing the tax-efficient planning you'd want.
Even worse, if family members genuinely need help—with a medical emergency, a home down payment, or education costs—your outdated limits may prevent your agent from providing that help.
7. Your Estate May Now Be Taxable at the State Level
Here's something that catches many families by surprise: while the federal estate tax exemption has increased to over $13 million per person (and adjusts for inflation), many state exemptions have not kept pace.
Take Sarah and Tom from Edina. When they created their estate plan in 2013, their net worth was safely below Minnesota's now $3 million exemption. They didn't worry about state estate taxes.
But by 2024, inflation had worked its magic. Their home in Edina, purchased for $450,000, was now worth $850,000. Their investment accounts had grown. Their IRAs had accumulated value. Suddenly, their estate was worth $3.8 million.
Minnesota's exemption? Still $3 million. It hasn't increased since 2020 and has not kept pace with inflation.
Sarah and Tom now faced a state estate tax bill of potentially $80,000 or more—a tax that didn't exist in their original plan. And they had no strategy in place to address it.
This is a common problem in Minnesota. But similar issues exist in other states with estate taxes. Even if you don't live in one of these states, if you own property there, you may have exposure.
8. Long-Term Care Costs Outpace Your Planning
This is perhaps the most devastating way inflation destroys plans, especially for families who want to protect their home and life savings.
Robert and Helen purchased long-term care insurance in 2005. Their policy provided $150 per day in benefits—which seemed adequate when nursing homes in their area cost about $180 per day. They figured they could cover the difference from savings if needed.
By 2024, when Helen needed nursing home care, the daily rate had climbed to $350. Their insurance covered less than half. Their savings, which hadn't grown at the same pace as care costs, were draining away at an alarming rate.
Even families without long-term care insurance who plan to "self-fund" their care face the same problem. If you calculated years ago that you had enough savings to cover three to five years of care, those calculations are probably dangerously outdated.
In Florida, the average cost of a private room in a nursing home now exceeds $120,000 per year. In Minnesota, it's over $130,000 annually; and care costs continue to rise faster than the rate of inflation. If your planning is based on costs from five or ten years ago, you're in for a painful surprise.
9. Medicaid Planning Thresholds Shift
For families concerned about qualifying for Medicaid to help cover long-term care costs, inflation creates another challenge. While some Medicaid limits adjust periodically, the strategies in your plan may be based on outdated assumptions.
Asset protection techniques, income limits, spend-down calculations, and look-back period considerations all shift over time. What worked in your 2018 plan may no longer accomplish your goals in 2025.
What This Means for Your Family
If you're reading this and thinking, "I created my estate plan years ago and haven't looked at it since," you're not alone. Most people treat their estate plan like their wedding album—they create it once, put it away, and never look at it again.
But unlike your wedding album, your estate plan needs regular attention. The economic landscape changes. Tax laws evolve. Your life circumstances shift. And inflation quietly erodes the foundations of even the best-designed plans.
The Solution: Regular Reviews and Updates
The good news? Once you recognize the problem, the solution is straightforward. A comprehensive review of your estate plan can identify where inflation has created gaps, outdated provisions, or new tax exposure.
During a planning review, we look at:
- Whether your asset values have changed enough to create new tax concerns
- If your beneficiary provisions still reflect appropriate amounts given today's costs
- Whether your long-term care planning accounts for current and projected costs
- If your powers of attorney include appropriate gifting and planning authority
- Whether your overall plan still accomplishes your core goals
For families with significant assets (typically $500,000 to $50 million or more), we examine sophisticated strategies for avoiding probate, minimizing taxes, protecting assets for a surviving spouse, and shielding inheritances from your children's potential divorce, bankruptcy, or creditor claims.
For families concerned about long-term care costs (typically those with $350,000 to $3 million in assets), we explore proven strategies to protect your home and life savings even if you or your spouse needs nursing home care.
Don't Let Inflation Steal Your Legacy
Your estate plan represents your life's work and your love for your family. You put thought and care into creating it. You made difficult decisions about who gets what, when, and how.
Don't let inflation silently dismantle what you've built.
If it's been more than three years since you reviewed your estate plan—or if you've experienced significant life changes like retirement, inheritance, divorce, or the birth of grandchildren—now is the time to take action.
Take the Next Step
At Roulet Law Firm, we've helped hundreds of Minnesota and Florida families update their plans to address inflation's impact and protect what matters most. With nearly 30 years of experience and offices in both Minnetonka and Venice, we provide sophisticated planning with the personal attention you deserve.
Ready to protect your family's future?
Call us today to schedule a consultation at either (941) 909-4644 for our Florida office, or at (763) 420-5087 for our Minnetonka, Minnesota office. Or you can fill out the contact form on this page, and a member of our team will reach out to schedule your consultation.
Not quite ready to meet but want to learn more?
Join us for my upcoming masterclass where I'll reveal the strategies I use with my private clients and their families to help them avoid probate, save on taxes, and protect the money they leave for their children in the event of divorce—and much more. Click here to sign up for the masterclass.
Concerned about long-term care costs?
Download your free copy of my guide, "Save Our Home: How to Protect Your Home and Life Savings From Long-Term Care and Nursing Home Costs." Click here to download your guide.
Don't wait until it's too late. Your family is counting on you to keep your plan current and effective. Let's make sure inflation doesn't steal the legacy you've worked so hard to build.
