althy Baby Boomers keeping Inheritance for themselves.
A US Trust survey of 457 high-net-wealth individuals with at least $3 million in assets they could invest released Tuesday found 51 percent said it is not important to leave their kids an inheritance.
"These are mainly self-made people," 50 percent of whom said they paid a price in personal relationships and possibly their own health when they made their wealth, US Trust President Keith Banks told CNBC. So they think "I’m going to get a return on that investment for myself, number one, and maybe my children down the road."
Among the study's other findings: 75 percent said their wealth is the result of their own focus and hard work, 52 percent have not fully disclosed their wealth to their children and 55 percent intend to actively volunteer after retirement.
"This is the 'forever young' generation. So they don’t think like our parents did" that when you hit 65 you relax in Florida, he said. "These are people that are serial entrepreneurs, they’re looking forward to starting new businesses, they want to volunteer, they want leisure time, they want to travel. It’s almost a new beginning for a lot of them. It’s also a way, in their minds, to stay young and feel young."
While nearly all had at least a minimal plan in place most were far from comprehsive planning that they should have been doing to help protect for the long term care of their finances and values.
Only 3% of the business owners in the survey had a succession plan in place.
Also interesting that of the ultra wealthy Bill Gates and Warren Buffet are recruiting to give at least half of their wealth to charity. The article does not really address the issue but it can be more helpful to provide less for the children of the very wealthy. If they have too much they will not feel the need to be productive and work for themselves. Ivanka Trump for example went to a top school and has worked in professional capacity and not merely earned money from being famous or partying. This point is made in the movie Arthur. Although he is wealthy it delays his growing up and he relies to heavily on the family and others to care for him. Funny for a movie but for real life it is sad when a child's ambition is taken away by never needing to work.
U.S. Trust found that many children of these first-generation wealthy families are not receiving the guidance and support they need to handle either the emotional aspects or financial responsibilities associated with family wealth. Among wealthy parents surveyed:
- Only about one third (34 percent) strongly agree that their children will be able to handle any inheritance they plan to leave them.
- Nearly half (45 percent) 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 (52 percent) of parents surveyed have not fully disclosed their wealth to their children, and 15 percent have disclosed nothing about the family wealth. When asked why they haven’t, one in three (31 percent) parents said they had never thought to do it.
Other reasons cited were 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).
Though 84 percent of parents think their children would benefit from discussions with a financial professional, nearly six in 10 (59 percent) have never introduced their children to the professionals managing their financial affairs.
See Margo Beller - CNBC April 19 Boomer Wealthy saving for themselves
See also Business Wire.com Info re the US Trust Survey
Comments