Allianz Life Insurance Company has posted the results of a new study the findings of which may be surprising to many. The study questioned nearly 3000 baby boomers and their parents regarding estate planning. Here is what the study found:
1. Non-financial items that parents leave behind—like ethics, morals, faith, and religion—are 10 times more important to both boomers and their parents than the financial aspects of inheritance
2. 86% of the participants said they plan to distribute their assets equally to their children.
3. However, 54% felt that a child that provided care for a parent should be entitled to more and one third of the participants felt that a child who was disrespectful should be given less.
4. Higher net worth individuals are much more likely to give unequal inheritance or disinherit a child.
5. Two in five elders with children say they have an “alpha child” that they trust with planning decisions. Compare that with the fact that the children over-estimate by a factor of four that they are the alpha child when in fact they are not.
6. Honesty and good communication skills outrank other key requirements for legacy advisors of both boomers and elders.
74% boomers/67% elders look for advisors who they perceive as honest and trustworthy.
66% boomers/56% elders look for advisors who explain things in an easy to understand manner.
58% boomers/46% elders look for advisors they feel are good listeners.
15% boomers/18% elders look for advisors working for well-known companies.
Considering that an estimated 41 trillion dollars will pass from the boomers and their parents in the next 50 years, the above statistics are very important to just about everyone. From the financial planner discussing estate planning with his or her client to the families themselves, it is important to take note of what matters most to people. And maybe if we all pay a little more attention to those items listed in No. 1 (ethics, morals, faith, and religion), we can be better family members and service providers.
