.

SmartMoney Blogs

Encore
A blog about living in and planning for retirement

Kids, Don’t Expect a Big Inheritance: Affluent Boomers

iStockPhoto

“Don’t hold your breath on an inheritance, kids. We worked hard for our money. We deserve to enjoy it.”

That’s the message from nearly half the 457 high-net-worth boomers ($3 million-plus in assets) recently surveyed by wealth management firm U.S. Trust. Leaving an inheritance, they said, is not in their top three priorities.

The survey found that three-quarters of respondents believe their wealth came from their own focus and hard work, while half said they paid a steep personal price—limiting time off, neglecting their families, mishandling relationships. Maybe that’s why, as they approach retirement, they’re planning to spend more on themselves, traveling (64 percent) and having fun (36 percent).

Boomers surveyed also had doubts about their kids’ readiness to handle the family riches:

  • Only 31 percent of parents agree strongly that their children can handle an inheritance.
  • Only 36 percent believe the kids can work together to make decisions about the family wealth after they’re gone.
  • Fifteen percent have disclosed zilch to the kids, detail-wise, about their wealth. When asked why, the reasons included fear the kids would become lazy (24 percent), would make poor decisions (20 percent) or would squander the money (20 percent).

Of course, this raises the question of how much all parents—not just the millionaires—are actually doing to educate their progeny in all matters money. (Have you had “the talk”?) For their part, nearly 85 percent of the survey respondents said, sure, the kids would benefit from discussions with a financial professional. But how many have introduced their kids to their adviser? Only about 4 in 10.

U.S. Trust president Keith Banks says he sees an opportunity for U.S. Trust to help clients address both the gap in planning and education (not to mention issues of disinterest and entitlement). One of the things the company now offers clients: Money 101 sessions for their adult kids, covering everything from basic finance to philanthropy and starting a business.

U.S. Trust, a private bank that’s been managing high-net-worth trusts and estates since 1853, has undergone several ownership transitions since 2000, including Charles Schwab and now Bank of America. Asked how the most recent merger has affected U.S. Trust clients, Banks notes that attrition rates are at historic lows .

Comments

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 34)

View all Comments »
    • I don’t know about your kids, but my son’s a great person, and I pray that I can leave him a fair amount of money when I die. And I hope he will do the same for his children.Sure, I could justify indulging myself and spending all of my money.But I remember how difficult it was when I was young, loaded down with debt from university, and having a wealthy father die and not even leave his sons a pair of his cuff links. I refuse to be that thoughtless. Too bad for your children. Sounds like their parents got old but never became mature in their thinking.

    • Pat – now we are talking. Sorry about the “personal” attack. Got your attention though. My original point is that we can not generalize about both of our generations. Re-read my prior posts. Guess we should each get a life and get on with same. Glad you are saving 30%. Congrats. Your comment “The Babyboomer generation has destroyed this country. It is their feeling of entitlement that has led to this bust and boom cycle that we are stuck in… They are the greediest generation of all… Most of the wealth was stolen from their children’s generation. They gen X and Y will be paying off the babyboomer’s debt for generations to come. You Assholes.” really got me thinking. Are there that many of you out there that think like you? I never thought of myself as an asshole or entitled. If you want to continue this dialog (with no generality/mud slinging)you can email me at lifeofriley2009-housesitter@yahoo.com I would be very interested in your thoughts if you keep them civil.

    • Hey Retired,

      If you look at your statements you would see that YOU are the one that feels entitled. Your posts are pure personal attacks without merit. In no way did I state that I had any debt. As a matter of fact my wife and I save more then 30% of our take home so that we will be able to give to our children and to take care of ourselves in the future. I stand by my statements that the Boomers are the most selfish generation. Your comments make my case. Get a life you sorry sack.

    • Pat – I feel sorry for you. With your attitude you have and are going to have one sorry life. You obviously are one of the Gen Xers who blames their life condition on everybody but them selves. You are the one who needs a reality check. Live within your means, below a budget and plan for the future instead of blaming me for your problems. Like Diane Young said, our parents taught us well. Sounds like your parents were on the government welfare dole. They taught your well. They made sure that you are lazy and complain about everything in life. It can’t be your fault, you were just not raised properly and are very self centered. If you can’t blame your parents (because they have probably disowned you)you blame everyone else of our generation. So sad.

    • Hey Retired,

      You talk about how you worked 2 jobs to put yourself through college. Good for you that it only took 2 jobs. It now takes 2 jobs to just to pay for living expenses, then you graduate with 100K+ in debt that will take 25 years to pay off. Your generation knows nothing of what it is like for new graduates and the debt that shackles the rest of their life. By the way, and undergraduate degree now is currently equivalent to a high school degree during your time. A graduate degree is required now to get ahead, thus adding to the debt burden. Boomers had it so easy. Most of the depression parents left their children what they could by saving and investing during the greatest period of growth this country has seen. Get a reality check.

About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.

.