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.”
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.
Similarly, 3 in 10 parents (30%) say it is “very important” to help their heirs improve their lifestyle. But only 1 in 6 children (17%) believe their parents think it is very important.
Boomer children were in the aggregate more forthcoming in approaching certain questions, notably legal tools that parents can execute while alive. Among them: the power of attorney, living will and health care proxy.
And, when discussions do turn to inheritances, adult children demonstrate a greater interest in family keepsakes than their parents realize. Mohyde cites as examples an ice cream table and a clock that parent-owners intended to discard, but then gave to heirs because of their sentimental value.
“These things are important to family members because they maintain connections among generations,” says Mohyde. “The objects are symbols of the fond memories the younger generations hold of their parents and grandparents.”
To help bridge the “generation gap” in communicating about estate planning, Mohyde recommends that parents and boomer children focus first on the things they agree on, and that they build on shared values.
Because older parents are more comfortable talking about estate planning, they should take the initiative in broaching the topic. If the adult child cuts the conversation short, the parent should pick another time to discuss the issue, but be persistent, says Mohyde.
Boomer children should also bear in mind that parents are more receptive to suggestions about planning (such as writing a will) than their parents realize. Boomers should also ask how they can help their parents maintain their independence, as by drawing up a durable power of attorney, living will or health care directive.
And, says, Mohyde, if these documents already are drafted, then the children should definitely know about their whereabouts.
“A lot of adult children don’t even know where the important paperwork is kept,” says Mohyde. “It won’t do a lot of good if they’re locked in a safety deposit box and the kids can’t get to them.
“Advisors,” she adds, “should encourage parents to talk not just to the child who is the executor of the estate, but to all the kids. If you want a smooth transition, then it’s probably a good idea to get [estate planning issues] ironed out while the parents are living and can express their intent.”
‘Parents want to help their children and grandchildren more than the adult children estimate….The parents want to be part of their future’