Our fearless leader takes on the economy, the deconstruction of the education system, the collegiate institution, teaching, and the generation gap. And she's female! *GASP* Writer, Married, 28, she seeks intelligent readers who vehemently oppose the status quo and ask-"where are we going?"
Friday, April 22, 2011
AS SEEN ON SEATTLE BUSINESS NEWS
Baby Boomers May Be the First Generation Not to Pass Wealth On to Children, Survey Says.
Counter to what has been projected to be the biggest inter-generational wealth transfer in U.S. History, perhaps $41 trillion by 2052, wealthy boomers may spend their money rather than pass it on to their children, according to a US Trust survey.
Fewer than half of wealthy parents surveyed said it is important to leave a financial inheritance to the next generation, according to a report published today.
U.S. Trust Insights on Wealth and Worth was based on a nationwide survey of 457 adults with $3 million or more in investable assets, not including the value of their home.
The survey shows that few wealthy people have developed plans to preserve and pass on their assets to either their children or charity, according to a press release from US Trust.
Less than a third of the respondents strongly agreed that their children would be able to handle the inheritence they plan to leave them.
Many of the wealthy boomers surveyed are self-made men and women. Close to half said they planned to continue working into retirement. Many had plans to start a second career or new business, and 55 percent intend to actively volunteer in their community.
Having worked hard for financial security, many respondents placed higher importance on travel and personal relationships than leaving an inheritance to their children or making a positive impact on society. Few seem interested in leaving a legacy.
“There is an expectation about the wealthy that they have an implicit, sacred responsibility to pass down their fortune to the next generation, and this understanding has shaped expectations about the coming wave of intergenerational wealth transfer,” said Sallie Krawcheck, president of Bank of America Global Wealth and Investment Management. “Our research, however, uncovered a distinct generational mindset that reflects changing views about what retirement means and an evolving sense of what one generation owes the next."
U.S. Trust also found that the wealthy do not have plans that adequately address the complexity of their financial lives or address unexpected factors that could wipe out a large portion of their assets. Few have plans that make use of trusts to pass on their wealth. And 62 percent have no plan in place to care for aging relatives.
Fifty-six percent have not documented personal property and assets, and half (51 percent) have not documented instructions about the distribution of personal possessions among heirs, often a source of family conflict in the settlement of estates.
U.S. Trust found that many children of these first-generation wealthy families are not doing a good job of handling the emotional and financial responsibilities associated with family wealth. Nearly half do not believe their children will reach a level of financial maturity to handle the family money they will inherit until they are at least 35 years old. About half the parents have not fully disclosed their wealth to their children, and 15 percent have disclosed nothing about the family wealth. Among the reasons parents cited was fear that their children would become lazy (24 percent); would make poor decisions (20 percent); would squander money (20 percent); or would be taken advantage of by other people (13 percent).
by: Leslie Helm
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