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Health & Fitness

Boomers Thinking Twice About Inheritances

Baby Boomers are thinking twice about leaving assets and estates to their children.

Do you plan to leave your children an inheritance? If you are a Baby Boomer (roughly between the ages of 47-65) the latest research indicates that you will most likely not leave them much, if anything.

Walter Hamilton, a Los Angeles Times writer has written an article that reveals that many Baby Boomers feel that they’ve already made significant sacrifices for their children and given them enough and now it’s their turn to reap the benefits of their own hard work.

“In a survey of millionaire Boomers by investment firm U.S. Trust, only 49% said it was important to leave money to their children when they die," according to the article. I have heard Bill Gates declare in an interview that each of his children will get $100,000 each upon his demise and not a penny more. The vast majority of his fortune will go to charity.

It seems that Boomers are caught between the desire to enjoy their golden years in the luxury they have envisioned and fears such as outliving their savings, having to take care of elderly parents, children or siblings who have their own money troubles. So many of them have decided to keep the money for themselves.

A sixty-year old Seattle woman, Carol Willson, is trying to spend every penny she has. “My goal is when they carry me away in that box that my bank account is going to say zero.”

Many older people are now looking at their family with less fiscal responsibility in the sense that they feel they have done their duty by spending generously on their children up through pricey educations. They feel that what remains is rightfully theirs to spend as they see fit.

Older Boomer parents worry that too many of their children have been spoiled as it is. They have tendencies towards entitlement and parents feel that if they leave large sums of money to their children, the kids would just squander it.

The economy itself also plays a role in this issue. Baby Boomers have felt the pinch of a schizophrenic stock market and unstable investments and they are not sure how much money they will have in ten or twenty years. Many children understand their parent’s position in not wanting to leave a large inheritance and they are fine with it. They feel that their parents deserve to enjoy their savings.

As with anything that centers around money matters, this issue is a highly personal one. Some people might feel that it would be unconscionable to not leave something for their children. Others feel that their children should make it on their own and not have to rely on their parents beyond a certain point. There are many extenuating circumstances in whether an inheritance should be left. I assume that one needs to assess the character, histories and needs of their children and make decisions based on that. 

When a parent is not feeling comfortable about how a child spends money they might want to consider a suggestion my Money Manager makes to clients who have kids who don’t manage their money wisely. He suggests that in the will the parent awards the child whatever amount of money matches his W-2 form at the end of the year. In other words, if they child earns $30,000 they may withdraw that amount from the estate.If they earn nothing, they get nothing from the estate. It may sound like tough love or a creative incentive, depending on how you look upon that kind of approach.

So Baby Boomers have elected to keep more of their money and give less away to their families. It’s a trend that may gain momentum. Is it fair? Ethical? Mean-spirited? There’s probably as many answers to those questions as there are Baby Boomers. But if you are in your twenties, thirties, or forties you may want to wait before you make any significant, far-ranging financial plans based on monies that may or may not become available years from now.


Here’s an excellent article from Fortune magazine about leaving money to your children:

http://money.cnn.com/magazines/fortune/fortune_archive/1986/09/29/68098/...

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