By Suzanne Woolley
April 7, 2022
Here’s something many Americans have in common: They don’t want to talk about their money and estate planning with their family.
Why? They think it’s none of their family’s business. Or it’s not necessary. Or they want to avoid the conflicts that could come when heirs know who's going to get what.
Those are the results of a survey of adults with investable assets of at least $100,000 released Wednesday by Ameriprise Financial Inc. Only 19% said they were completely transparent.
The survey focused on generational wealth, which 44% said was defined by having a half million dollars or more to pass along after they die.
Nearly 40% of those surveyed said their family “should be responsible for making their own way without my financial help.” Baby Boomers were much more likely than younger generations to agree with that sentiment, with 45% agreeing compared with about 27% of Millennials and Gen Xers.
The good news for those hoping to inherit is that most Americans with sizable investments do want to pass along generational wealth. More than two-thirds of the survey’s universe of 3,325 adults agreed that “passing generational wealth to heirs is important to them.”
About 30% of people plan to give some of their money away while they’re alive, and 43% figure that amount will be $100,000 or more.
Passing on family real estate is a common plan, and nearly 70% of those surveyed plan to leave real estate to heirs, whether that’s land or a first or second home. But 56% hadn’t shared that plan with those who would inherit.
Among people with concerns about their plan to leave real estate to heirs, 14% feared potential conflicts from leaving property to more than one heir, 15% said they weren’t sure heirs could swing the upkeep and taxes, and 13% were concerned heirs would quickly put the property up for sale.
Survey respondents who had inherited real estate themselves had advice for the next generation on how to do it more smoothly, said Marcy Keckler, senior vice president of financial advice for Ameriprise. “The advice was to have a plan in place ahead of time that includes key information about the property, to have a lawyer involved — which seems obvious but apparently wasn’t the case when some people inherited — and to communicate the details in advance,” she said.
That advance planning can lessen tensions at a stressful time, particularly if heirs have different levels of wealth. “When multiple owners in the next generation have uneven or unequal financial resources, that can lead to challenges,” Keckler said.
She recommends that, if possible, people consider setting aside a dedicated fund to cover maintenance costs, and maybe taxes, so that chipping in equally doesn’t create a hardship for some family members. “Having dedicated resources for that can be one way to set the stage for more harmonious family relationships in the future,” she said.
© 2022 Bloomberg L.P.