It seems they are divided regarding whether leaving an inheritance is important.
According to a report by the Hearts & Wallets financial services research firm, those affluent members who are less inclined to leave an inheritance are not necessarily selfish and those planning to leave an inheritance are somewhat uncomfortable about doing so.
These are the general findings reported in a recent Forbes article titled "How Boomer Parents Feel About Leaving Inheritances."
The Hearts & Wallets report, titled Funding Life After Work: Impact of Parenthood & Wealth Transfer on Retirement Solutions for Baby Boomers, reveals that roughly 40% of those surveyed plan to leave inheritances. About 30% expect to spend all their money, and the other 30% aren't sure.
Interestingly, there is one item the majority of the parents apparently have in common: they are afraid of running out of money.
And those who plan to leave inheritances are extremely terrified of running out of money!
Ultra-wealthy parents appear to be more apt to give their kids inheritances, according to a US trust survey of high net worth individuals with at least $3 million in investable assets.
Some 57% of the respondents think it is important to leave a financial inheritance to the next generation. Not surprisingly, this figure is less than the 66% of Gen X'ers and 74% of Millennials who felt this way.
However, only 27% of the parents surveyed have told their children how much they are likely to inherit.
Only some 20% strongly agreed that their children will be prepared to handle the wealth they will receive. In addition, the wealthier boomer parents interviewed were also more apt to leave inheritances than ones with fewer assets.
Many boomer parents who choose not to leave inheritances are not necessarily stingy with their cash.
So, what are they doing?
Many are giving their children and grandchildren money while they are still around to watch them use the cash to fulfill their dreams (and also watch to be sure it is used wisely).
Some call this phenomenon "investing in their children while they are growing."
Those who do plan to leave inheritances see this generosity as "the ultimate insurance policy against ever running out of money" and earmark some of their assets for their children.
These inheritance parents are taking an active role in discussing family finances with their kids. That conversation may prove to be very useful after one or both parents die.
Contact your estate planning attorney. He or she can help you navigate the delicate intergenerational financial issues.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Forbes (January 21, 2016) "How Boomer Parents Feel About Leaving Inheritances"