According to a Reuters report, most young, wealthy Americans believe it is important to pass money on to their heirs. However, they may be disappointed to learn that their parents do not feel the same way.
In an annual survey of the wealthy released on Monday (18 Jun 2012) by US Trust, a division of Bank of America Corp, three-quarters of wealthy adults under age 46 said it was a priority to leave money for their kids.
But just 55 per cent of Baby Boomers – those age 47 to 66 -said they shared that sentiment. In fact, one of every three surveyed said they would rather leave money to charity than to their kids.
Their reasoning? Some said they believe that each generation should create its own wealth, while others said it was more important to invest in children’s success while they were growing up, according to the survey of 642 individuals who have at least US$3 million (RM9.5 million) in investable assets.
“Our survey points to a shift in generational behaviour and outlook, most likely shaped by personal experience and societal responses to economic realities,” said Keith Banks, president of US Trust.
Most of those surveyed do not even talk to their kids about money: just 37 per cent said they had fully disclosed their net worth to their children. Those over age 67 said they were not having this discussion because they were raised not to discuss money, while younger respondents said they did not want to inhibit their kids’ work ethic.
A few other highlights from the study:
* Six in 10 wealthy parents are not fully confident their children will be well-prepared to handle an inheritance. Baby Boomers have the least degree of confidence.
* Forty-two per cent of Baby Boomers and 54 per cent of those under age 46 are paying medical costs for their parents or other relatives.
* Two-thirds of those surveyed have not made, nor do they have plans to make, a monetary gift to family members to reduce the size of their taxable estate before the end of 2012, when tax laws are expected to change. — Reuters