Many parents who know that they will have money or property to hand down to their children struggle with the question of when to do so. Often the concern lies in whether an inheritance or the promise of one will lead to a lack of motivation by children to seek financial independence and success in their own right. For older generations who built businesses attained high levels of professional success, the thought of handing over cash to a young person who has not put in the time or effort can be quite unappealing.
However, while the stereotypes suggest that millenials will take the money and run off to a lavish vacation or quit their job, new data suggests the opposite.
Coming of age in the shadow of the recession, millennials as a group are more concerned about retirement than their parents or grandparents were. They are also more risk averse and show better saving habits than older generations. A loss of trust in the financial markets and big banks has also resulted in a more conservative investment strategy.
Many also consider whether they will be financially stable enough to help support their parents during retirement, according to a financial adviser.
So what does all of this mean for Texas families? Well, it means that now could be a good time to discuss these issues and consider when to tell children about a potential inheritance and whether to make that gift during life or leave it to be handled through a will or a trust.
Source: CNBC, “Millennials Make Most of Massive Inheritance: Study,” Paul O’Donnell, May 31, 2013.