Time to break the silence on generational wealth: Edward Jones

Time to break the silence on generational wealth: Edward Jones
Research finds nearly half of parents with adult children plan to leave an inheritance, but only a quarter have had the wealth talk.
FEB 27, 2024

A new study conducted by Edward Jones sheds fresh light on one critical, yet often overlooked aspect of family financial planning: conversations surrounding the transfer of wealth.

With an estimated $84.4 trillion expected to change hands from the baby boomers and the Silent Generation to younger demographic groups by 2045, according to Cerulli, the need to have these discussions is as great as it’s ever been.

But despite the significant impact this generational wealth tsunami will have, the research from Edward Jones – in collaboration with Next360 Partners and Morning Consult – points to a startling lack of communication among American families.

While nearly half (48 percent) of Americans intend to leave an inheritance – including 45 percent who will give it only to their children, and 36 percent who plan to include grandchildren as well – a substantial 35 percent have no plans to discuss these intentions with their family members.

"We know it can be extremely uncomfortable and nearly impossible to separate emotions from the financial decisions necessary when planning inheritance and wealth transfer, particularly as givers navigate family priorities beyond finances,” Lena Haas, head of wealth management advice and solutions at Edward Jones, said in a statement.

The study also emphasized the evolving nature of inheritance, with just over two-thirds of Americans (68 percent) acknowledging that increased longevity and higher living expenses will influence the wealth passed down to future generations.

This shift has resulted in diverse approaches to wealth transfer, Edward Jones said, including traditional giving, giving while living, and generational skips. In the most extreme cases, longer-than-expected lifespans and expenses related to health challenges or long-term care could leave older generations unable to provide an inheritance.

While a 71 percent majority of adults with children say they’re comfortable engaging in discussions around generational wealth, only 27 percent say they have actually done it.

Among those who’ve already had the talk or plan to do so, two-fifths (40 percent) have touched on saving for retirement, while 36 percent said they’ve discussed managing personal finances. Charitable giving and family business succession plans, meanwhile, figured among just 21 percent and 23 percent of respondents, respectively.

"The wealth transfer conversation needs to be dynamic, with 'The Talk' happening before 'The Transfer,'" said Joe Coughlin, senior advisor to Next360 Partners.

While a third of respondents said they feel pride (34 percent) or fulfillment (33 percent) in passing on inheritances, only about a quarter of adults feel prepared and confident in the process.

Those receiving an inheritance say they mostly feel grateful for it (61 percent), but around one-fourth also feel they’re not ready (25 percent) or feel anxious thinking about it (19 percent).

The study suggests that engaging a financial professional could help allay these concerns, as 57 percent of Americans believe expert guidance would simplify planning and allow families to arrive at a consensus more easily.

Why advisors need to teach 'longevity literacy' to the 401(k) generation

Latest News

Judge OKs more than $90 million in settlement money for GWG investors
Judge OKs more than $90 million in settlement money for GWG investors

Mayer Brown, GWG's law firm, agreed to pay $30 million to resolve conflict of interest claims.

Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs
Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs

Orion adds new model portfolios and SMAs under expanded JPMorgan tie-up, while eMoney boosts its planning software capabilities.

Retirement uncertainty cuts across generations: Transamerica
Retirement uncertainty cuts across generations: Transamerica

National survey of workers exposes widespread retirement planning challenges for Gen Z, Millennials, Gen X, and Boomers.

Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future
Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future

While the choice for advisors to "die at their desks" might been wise once upon a time, higher acquisition multiples and innovations in deal structures have created more immediate M&A opportunities.

Raymond James continues recruitment run with UBS, Morgan Stanley teams
Raymond James continues recruitment run with UBS, Morgan Stanley teams

A father-son pair has joined the firm's independent arm in Utah, while a quartet of planning advisors strengthen its employee channel in Louisiana.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave