Business
5 Reasons Boomers Are Spending Their Money Instead of Leaving It to Their Kids
By Jake Beardslee · February 28, 2024
5 Reasons Boomers Are Spending Their Money Instead of Leaving It to Their Kids
Baby boomers hold trillions in wealth, but recent trends show they may not leave as much to their heirs as previous generations did. Financial advisors reveal the reasons behind this shift, from a desire to minimize family squabbles to a need to fund their own long-term care. Read on for 5 key factors driving the change in inheritance patterns. FORMAT arw/Unsplash
Nip Future Squabbles in the Bud
Many boomer parents distribute inheritances while still alive to prevent clashes between siblings later. Giving kids money ahead of time and being present to mentor them on managing it wisely helps minimize family dynamic issues after parents pass away. Esther Ann/Unsplash
Fund Causes
Rather than leave everything to their children, many high-net-worth boomers donate much of their money to charity. They can still involve their adult children by having family discussions about values and which causes to support. This allows the next generation to provide input on philanthropy without receiving the funds directly. Joel Muniz/Unsplash
Teach Financial Skills
Wealthy parents often want to teach their children how to handle money wisely so wealth lasts beyond one generation. Many families lose their fortune within a couple of generations due to heirs not knowing how to maintain or grow their inheritance. Staying involved past the time of inheritance allows boomers to mentor their adult children on generating their own wealth. Jakub Żerdzicki/Unsplash
Enjoy Benefits Now
Rather than wait until after they’re gone, some boomers want to see the positive effects of their wealth-sharing while still living. They choose to pay for grandchildren’s education, help with home down payments, or support their adult children in launching businesses. This “living inheritance” allows them to actively take part. Alexander Grey/Unsplash