Many wealthy Americans who reach retirement age don’t expect to leave much money to their children (and think the kids couldn’t handle it if they did).
“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 (.pdf file) 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%) and having fun (36%).
Boomers surveyed also had doubts about their kids’ readiness to handle the family riches:
- Only 31% of parents agree strongly that their children can handle an inheritance.
- Only 36% 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, detailwise, about their wealth. When asked why, the reasons included fear the kids would become lazy (24%), would make poor decisions (20%) or would squander the money (20%).
US Trust is out with its “Wealth & Worth” survey, finding that 50% of wealthy parents do no think it’s important to leave an inheritance for their children, with Keith Banks, president of US Trust.
Leaving inheritance not a priority?
US Trust is out with its “Wealth & Worth” survey, finding that 50% of wealthy parents do no think it’s important to leave an inheritance for their children,… More US Trust is out with its “Wealth & Worth” survey, finding that 50% of wealthy parents do no think it’s important to leave an inheritance for their children, with Keith Banks, president of US Trust.
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% 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 40%.
Keith Banks, the president of U.S. Trust, says he sees an opportunity to help clients address the gap in both 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.
Reprinted from MSN Money