According to a new report released by Bank of America’s private wealth management division, more and more American families are choosing to give their wealth to charitable organizations rather than their children. U.S. Trust recently released the results of a survey in which it found that about 32% of families with assets of $3 million or more do not plan on giving their children an inheritance. For baby boomer parents, that number is almost 45%.
The study shows that one in four survey participants said they would rather use the money for their own enjoyment, while another one in four said they would prefer to give the money to charity. Only 7% believe that they wouldn’t have any money at all to leave to their children or grandchildren.
Though the survey respondents cited numerous different reasons why they wouldn’t give money to their children, the largest single reason was because they believed each generation should be able to earn its own money. Others said they wanted to use their money to address social problems or spend it on their children while they are still alive. Those who believed it was important to give an inheritance stated they wanted to do so in order to positively influence the lives of their children.
It’s estimated that as much as $11.6 trillion of wealth will be transferred between generations as the “Greatest Generation” dies and baby boomers inherit their wealth.