There is an interesting trend that researchers are finding regarding the inheritances that members of the baby boomer generation will be receiving. These are the people who were born between 1946 in 1964, and they are incrementally reaching their mid-60s, which is of course the approximate age of retirement for most individuals.
Merrill Lynch surveyed a sampling of individuals who are in possession of at least $250,000 of investment assets over a period of time. In 2009, 54% of the people they queried stated that they were making inheritance preservation a priority. In a more recent survey conducted last year this figure shrunk to just 41%.
People are shifting priorities not because they have less love for their children but because they have no choice but to prioritize their own well-being as they continue to age.
A study coming out of Boston College indicates that the devastating financial fiasco that the country experienced in 2007 and 2008 definitely played a part in the diminished inheritances that baby boomers can expect. They estimated that inheritance values decreased by around 13% during the year leading up to the advent of the crisis through June of 2010.
All the above is interesting to think about, but what does it mean to you? From a practical perspective it would be logical to recognize the fact that you probably shouldn’t expect anything particular if you are a baby boomer who is in line for an inheritance.
And, the statistics underscore the importance of working within a carefully constructed long-term financial framework so that you have the flexibility to withstand the ebb and flow of ever-changing market conditions.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.