Only a Quarter of Americans Expect to Leave an Inheritance
A Meaningful Financial Planning Move
Two-thirds of survey participants who expect to leave an inheritance said this was either their most important financial goal or a very important one. Eighty-one percent of millennials and 75% of Gen Zers said doing so was a priority, compared with 65% of Gen Xers and only 46% of boomers and older people.
Most respondents who expect to leave an inheritance said they would give a financial gift to their children and grandchildren.
Williams-Kemp said leaving an inheritance extends beyond dollars to providing stability, opportunities and a foundation for future generations to build on.
“That’s why it’s essential to plan and communicate with family and loved ones to ensure your legacy is protected,” she said.
Northwestern Mutual noted, however, that 47% of boomers and older people in the survey who expect to leave an inheritance or gift have not talked to family about their financial plans. Thirty-eight percent of Gen Xers also said they have not done so.
Wealth Transfer Hiccups
Six in 10 American parents in the study said their children did not value financial responsibility at the same levels they did. Fifty-two percent of these worried that their offspring’s variance in values could negatively affect family assets from one generation to the next.
The research also found that 65% of Gen Xers and 40% of boomers and older people do not have a will. Some did not think they had enough assets or were too young to warrant one. Others found the matter too complicated and awkward to think about, and still others were uncertain about where to leave their assets.
At the same time, respondents felt positive about passing along their financial insights. Three-quarters of parents said they would be comfortable formally including their teenage or young adult children in annual meetings with their financial advisor.
Why? Seventy-one percent saw the value in teaching and instilling good financial habits in their children, and 58% thought it was a good idea to introduce them to financial planning concepts.
“The primary way wealth is passed from one generation to the next is through a will, life insurance and an estate plan,” Williams-Kemp said. “However, it’s clear that inherited wealth is not indefinite wealth. Financial knowledge can be even more important to pass along to the next generation.”
