Unlike younger and older high-net-worth Americans, nearly half of wealthy baby boomers do not believe it is important to leave an inheritance for their children, a new report from U.S. Trust, a division of Bank of America, finds.
Based on a survey of more than six hundred high-net-worth and ultra-high-net-worth adults, the report, U.S. Trust Insights on Wealth and Worth (37 pages, PDF), found that 55 percent of the boomers who responded said they think it is important to leave a financial inheritance to their children, compared to 76 percent of 18- to 46-year-olds and 73 percent of respondents over the age of 67. Among the respondents who said they do not think an inheritance is important, 31 percent said they would rather leave money to charity than to their children. In all, 61 percent of respondents who are parents said they are not fully confident that their children will be well prepared to handle an inheritance, with baby boomers having the least degree of confidence.
The report also found that 40 percent of the Gen Xers and Yers surveyed have established a financial plan for their parents' elder care needs, compared to 20 percent of baby boomers. Despite their considerable resources, nearly six in ten respondents overall said they do not have a comprehensive estate plan, with a plurality of respondents (43 percent) saying they have no need for a trust as long as their wishes are outlined in a will.
"Our survey points to a shift in generational behavior and outlook, most likely shaped by personal experience and societal responses to economic realities," said Keith Banks, president of U.S. Trust. "The next generation has not experienced the consistently strong economic growth or investment returns that baby boomers experienced during the longest bull market in history."