Parents are readier to talk about inheritances than boomers think
Defying a long-held taboo, parents in their 70s are far more likely to be comfortable discussing estate planning than their baby boomer children. They also care more about helping their children financially than their children realize, according to research by The Hartford Financial Services Group.
The research, conducted by Mathew Greenwald & Associates as part of Hartford’s “Family Conversations” series, shows that older parents and their children need help when discussing often uncomfortable estate planning issues.
“Adult children are in denial or are uncomfortable with the prospect of eventually losing their parents,” says Maureen Mohyde, director of the corporate gerontology group at Hartford Life, Simsbury, Conn. “As an adult child who is discussing estate planning with your parents, it’s hard to duck the fact that you’re talking about your inheritance. Not wanting to appear greedy, adult children hesitate in approaching the topic.”
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The Hartford research surveyed 500 older parents between ages 70 and 79 and 450 adults (primarily boomers) between ages 45 and 65 who have at least one living parent. The parents and adult children had $75,000 or more in financial assets and $40,000-plus in household income, respectively.
Among the findings: 76% of older parents say they are very comfortable talking about their estate as compared to 45% of boomers who say they are very comfortable. Similarly, 71% of parents say they are comfortable discussing the content of their wills as compared to 54% of adult children who expressed the same sentiment.
The generational gap was evident, too, in each group’s perception as to the adult children’s knowledge about the parents’ estate. Nine in 10 parents (91%) say their child at least “somewhat knows” about the nature and extent of their estate. But only 8 in 10 adult children (81%) agree they know this much about the estate.
Also, 94% of female parents with one or two children (95%) and parents who have discussed their estate plan with their children (95%) are among the most likely to say their child knows about their estate. Moreover, children with at least $250,000 in assets are among the most likely to know about their parents’ estate.
Mohyde observes that some boomer children have difficulty discussing the parents’ financial legacy, in part, because they believe the topic chiefly involves tax planning. But, she says, it is also about “establishing connections” between generations, including grandparents and grandchildren.
“Parents want to help their children and grandchildren more than the adult children estimate,” says Mohyde. “The parents want to be part of their future.”
Mohyde noted, for example, that one parent could only set aside a small amount of funds for his granddaughter’s college education. Yet the parent’s son, a vice president at a Fortune 500 company, easily could have funded his daughter’s education from his own assets.
One-third of parents (35%) interviewed in the Greenwald survey said they believe it is “very important” to provide for their heirs’ college education. But more than 4 in 10 (44%) of adult children believe their parents think it is not important.