Wealth has perhaps always been passed from parents to their children and grandchildren. We can’t take our money and assets with us when we go, but we can make sure that our families are taken care of.
Although wills and inheritances have been around for a long time, America seems to be entering a period involving a record number of heirs inheriting vast amounts of wealth. Over the next couple decades, 79 million Baby Boomers may be inheriting an estimated $8.4 trillion in assets left behind by their parents; many of whom grew up during the Great Depression and learned to be very thrifty as a result.
Of course, family inheritances tend to come with the potential for emotional baggage. Are you obligated to spend your inheritance as your parents might have or can you use it in your own ways? Do you need to invest it to honor their memory or can you spend it on a long-desired family vacation? If your parents left you a vacation home that they spent decades saving for, should you keep the house even if it makes financial sense to sell it?
These questions may be especially difficult for Baby Boomers considering how different their parents’ attitudes toward money may have been. Then again, many Baby Boomers might find their inheritances to be a proverbial lifeboat for their own retirement. Pensions are largely a relic of the past, and many Boomers find they haven’t saved enough money to retire comfortably.
At the very least, receiving an inheritance might have many Baby Boomers thinking about their own legacies and what they will leave to their children. If that’s the situation you find yourself in, why wait any longer? An experienced estate planning attorney can help you get started right away.
Source: New York Times, "When Boomers Inherit, Complications May Follow," Fran Hawthorne, Feb. 10, 2014