From Solomon, Steiner & Peck
There’s a notable inheritance expectation gap between older adults’ plans to leave inheritances and younger adults’ expectations of receiving them, according to a recent LegalZoom survey.
Older generations generally plan to leave more in terms of value and variety of assets (money, real estate, personal possessions, investments) than younger generations anticipate receiving.
Open communication about financial and estate plans within families is crucial to avoid disappointment, financial instability, disputes, and stress for surviving family members.
Many older adults plan to pass on their hard-earned assets to their children. In fact, trillions of dollars are expected to be passed down from Baby Boomers to future generations over the next few decades as part of the so-called “Great Wealth Transfer.”
This transfer of wealth can include money, a home or other real estate, and personal possessions. Parents often also want to find ways to pass on intangibles like values and traditions.
However, younger adults’ expectations do not quite align with those of older adults. Fewer younger adults say they expect to receive an inheritance, despite the fact that older adults say that they are likely to leave one. When they did anticipate an inheritance, younger Americans expected less value in general than older adults planned to give. These findings point to an interesting gap between older adults’ plans and younger generations’ more modest expectations.
Sixty percent of older adults planned to leave at least $50,000, with 15 percent planning to pass down between $101,000 and $250,000. At the same time, many younger people expected smaller inheritances, with 24 percent (the biggest group of younger respondents) anticipating less than $10,000 and 13 percent anticipating less than $25,000.
Most of us don’t want to appear greedy, and asking about a potential inheritance can easily fall into that category, but estate planners say that honest conversations about money can prevent hard feelings later if there are unclear or uncommunicated estate plans.
