A new survey by Barclays Wealth has revealed a statistic that many might find surprising: almost a third of older millennials are happy not to inherit.
“32 per cent of millennials would rather their parents focused on using their cash to fund a comfortable retirement, rather than pass any down to them in their lifetimes.”
Cost of living concerns
This attitude towards their own inheritance certainly reflected their parents’ concerns on two fronts: the impact of market changes on pension values, and the rising cost of living.
Whilst 99% of the millennials’ parents wanted to pass on an inheritance, they were also concerned about the affordability of it.
- 31% were worried about supporting their own immediate living costs
- 19% were considering downsizing
- 36% were concerned about the cost of care
However, 37% of the millennials’ parents wanted to gift money to their children this year to help out with costs.
So, whilst the millennials themselves don’t want their parents to be worried about money and focus on their own retirement funding, their parents in return are worried about the impact of the cost of living on their children.
What you want is what they want?
There is a clear disparity between what each generation want from, or are bequeathed by, the other. It’s also a reflection of the study’s finding that 38% of parents don’t talk about inheritance to their children.
As Barclays Wealth Director Clare Francis said:
“Even though most children would be very grateful if their parents are able to pass on some inheritance while they’re still alive, they wouldn’t want them to have money worries in the future as a result. This is why it’s not only important to plan, but also to include your family in any conversations – it can make such a difference and help remove some of the pressure many parents feel when thinking about how and when they’ll pass on their wealth.”
Talking with the family
We couldn’t agree more. Estate planning should include all the family in terms of planning and managing expectations. For example:
- You may want to pass on your business to your children, but your children have zero interest in it.
- One of your adult children may want to inherit the family home, whereas the other would rather sell. Yet neither might be able to buy the other out.
- Equally, one child might be a safe pair of hands for family heirlooms, and another take them straight to auction.
However, there are other aspects that you might want to put into the will but not share with the family. For example:
- You might want to ring fence assets to specifically exclude certain family members, such as an in-law, should your child and they divorce.
The rising cost of care
One important aspect of estate planning is provision for your own long-term care. We may be living longer, but that doesn’t mean we necessarily retain our current good health or mobility. Chances are, we will all require some level of professional (i.e. privately paid for) care in our advanced years.
So, there is little point in ring fencing or saving money for adult children to receive on your death if they need to fund your care whilst you’re alive. Instead, by making provision for your care in your estate planning, you can relieve your children of that worry and financial burden.
Talking estate planning
If you want to talk about estate planning, we’re here to help. You can book an initial consultation to talk through your circumstances, your overall financial position, and your current estate planning (if any). If you then want all the family to meet up at a further meeting whether in person at our Cowplain offices or on Zoom, that’s no problem. The important point is that you do start your estate planning, and you do start to talk about it with those you love too.
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