Inheritances – a relic of the past?Ian Whiting
A touchy subject I suspect, as I know of quite a few Boomers, Gen Xs and Ys that are counting on inheritances from the Zoomers and then down through the other generations, to fund their own financial independence. Numerous studies have pointed to the trillions of dollars currently in the hands of the rapidly aging Zoomers and old Boomers that will be left to the younger groups – but will that actually happen?
Having been in this industry for more than 40 years, I have seen first-hand the results of inheritances – some that were positive experiences but most, regrettably, were not. One situation comes to mind where a young person inherited close to $900,000 from a parent – it lasted less than 9 months and accomplished nothing other than totally wrecking multiple vehicles worth more than $500,000, some outlandish trips and spending sprees – nothing was left from the hard work of the parent’s lives. Was this what was intended? Most certainly not.
Speaking with more and more Zoomers and Boomers, the attitude seems to be far closer to the well-known bumper sticker: “We’re spending our kid’s inheritances.” But why is this happening? Even the multi-billionnaires are getting into the act with various pre- and post-mortem gifts being planned as the Jimmys, Sir Richards, Bills and Warrens are donating massive sums to charitable foundations rather than pass it all to family and/or friends.
But these people aside, why the apparent change in attitudes towards leaving an inheritance to family members? Could it be that parents are recognizing they gave everything to raise their children, pay for food, clothing, shelter, education, etc.? Gave them the love and caring support they needed to reach adulthood? Could it be that increasing longevity has made people aware that their first priority is not to become a burden on others? Could it be that people are looking to enjoy more in their post-employment lives that has been the case in the past 60 years?
Are we now awakening to the true cost of caring for ourselves as we age? Are we finally recognizing that the various levels of government will not provide the standard of care to which we feel entitled?
I certainly don’t have the answers and my guess is that there are many factors at work. What I do know, however, is that very few Gen Xs, Ys or Millenials are going to lie in the lap of luxury when their parents finally pass away.
A mentor once told me something very profound – every monkey has to hang by their own tail. Is your tail strong enough to support you?