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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

Pay Long-Term Care Costs

Unexpected long-term care costs eat away at many boomers’ nest eggs, leaving less for heirs. A third of Americans end up needing extended care, averaging almost 3 years, but few have sufficient insurance. Draining savings to cover in-home care or nursing homes often taps funds originally intended for inheritance.  Vlad Sargu/Unsplash