Children of rich baby boomers probably shouldn’t count on a lush inheritance. Many parents nearing retirement would rather spend their money themselves, a study indicates.
Only 49% of wealthy parents say it’s important to leave money to their children when they die, according to a survey by U.S. Trust, a unit of Bank of America Corp. Instead, many of those parents plan to use their savings for travel and to focus on personal relationships.
One possible reason: Barely one-third of those surveyed expressed confidence that their children would be able to “handle” an inheritance.
The study, released Tuesday, surveyed 457 people nationwide with at least $3 million each in investable assets. Many of the respondents described themselves as self-made.
The findings up-end the time-honored notion of parents’ carefully tending their financial estates to maximize the bequests to be handed out at the reading of the will.
“There is an expectation about the wealthy that they have an implicit, sacred responsibility to pass down their fortune to the next generation,” said Sallie Krawcheck, head of Bank of America’s wealth-management division. “Our research, however, uncovered a distinct generational mind-set that reflects changing views about what retirement means and an evolving sense of what one generation owes the next.”
Of the parents surveyed, 52% haven’t revealed the extent of their wealth to their children and 15% haven’t disclosed anything at all about their financial status, according to the survey.
Asked why, nearly one-fourth said they feared their children would become lazy if they knew.