Wealthy parents keeping kids in dark about inheritances

Wealthy parents keeping kids in dark about inheritances
Rich folks, worried that the specter of a large bequeath could kill a child's drive to succeed, are increasingly keeping mum about their estates
APR 28, 2011
By  John Goff
Less than half of wealthy Americans say that leaving an inheritance is important, according to a survey by U.S. Trust. “I think it's reflective of the mindset of a lot of the baby-boomer generation,” said Keith Banks, president of U.S. Trust, the New York-based private wealth management unit of Bank of America Corp., the largest U.S. lender by assets. “I think they expect to live a lot longer and I think their first concern is, ‘Am I enjoying the hard-earned wealth I created?'” Of the 457 individuals surveyed, each of whom said they had $3 million or more in investable assets, about 49 percent said that passing assets on to heirs is very important to them. That may help explain why about half of respondents said they've never spelled out how they'd like their estates to be divided among heirs, said spokeswoman Lauren Sambrotto for Charlotte, North Carolina-based Bank of America. U.S. Trust clients generally have at least $3 million in investable assets. About 67 percent of those surveyed haven't told their children the full extent of their net worth, and 15 percent told their children nothing about their family's wealth. The average age of those surveyed was 61. “There's a concern that if the kids are fully cognizant it may start to influence how hard they work at their own careers,” said Banks. About 78 percent of those surveyed said their children won't be mature enough to handle their inheritances until they are at least 30 years old, and 45 percent said their children won't be mature enough until they are 35 or older. U.S. Trust hired Rhinebeck, New York-based Phoenix Marketing International to survey the individuals online in January and February. The last time U.S. Trust conducted a survey on attitudes about personal wealth and estate planning was in 2007, almost a year before the collapse of Bear Stearns Cos. About 43 percent of respondents then said they owed it to their children to leave a significant inheritance, and the average age at which participants said their children assumed responsibility for their own money was 27. “If you knew you had a tremendous amount of wealth behind you, would you be as ambitious, would you be as self-reliant, knowing that?” said Doug Ketterer, head of New York-based Morgan Stanley's U.S. private wealth management unit, where clients have $20 million or more in assets. “In their own way they're protecting their children to make sure they can live the life they hope they would live.” --Bloomberg News--

Latest News

'Bogged down' advisors just want to have fun (again)
'Bogged down' advisors just want to have fun (again)

Jim Cahn, of Wealth Enhancement Group, lifts the lid on his firm's partnership model, his views on RIA M&A, and the widely slept-on reason why advisors are merging into larger organizations.

Vestwell unveils new emergency savings account offering
Vestwell unveils new emergency savings account offering

The fintech firm is cementing its status in the workplace savings space with its latest ESA offering, which employers can integrate into their existing benefits package.

'Money Mimosas' and other ways to show your Valentine financial love
'Money Mimosas' and other ways to show your Valentine financial love

Wealth managers offer unique ideas for couples to grow closer emotionally and financially.

Limra research finds financial confidence on the rise among Black American workers
Limra research finds financial confidence on the rise among Black American workers

Survey findings suggest increased sense of financial security and more optimistic 2025 outlook, while highlighting employers' role in ensuring retirement readiness.

DOGE efforts sideswipe muni bonds backed by federal lease payments
DOGE efforts sideswipe muni bonds backed by federal lease payments

Falling prices for some securities within the $4 trillion state and local government debt market spotlight how the push to shrink spending is sending shockwaves across the US.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.