In recent years, Americans have been buffeted by a severe recession, the collapse of investment and housing markets, and debilitating government deficits.
Despite these financial upheavals, people thinking about their estates and inheritances continue to believe that passing along personal and family values is the most important legacy they can leave for their heirs. Possessions—especially family items—are also important, and even younger people believe that keeping family possessions is important.
These findings were reached in the "2012 Allianz Life American Legacies Study," sponsored by Allianz Life Insurance Co. of North America. It surveyed baby boomers, ages 47 to 66, and a group it called elders, all 72 or older. The survey closely matched an initial legacies study the company released in 2005, when all things economic were in far better shape than today.
"We did the original study back in 2005," says Katie Libbe, Allianz's vice president for consumer insights. "So many things have changed since then that we thought there would be big changes [in the survey findings]. We thought baby boomers were going to be counting more on getting some kind of bailout from the big inter-generational transfer of wealth that we know is going on."
"Boomers say they don't expect to get anything in inheritances," she added, "although we know that two out of three boomers are going to get something" when older family members die. Studies project boomer inheritances will be as much as $12 trillion.
"We were surprised that the emotional elements are still solidly number one," Libbe explained. Among other findings, she said, elders think it's very important to impress upon their boomer heirs the importance of personal responsibility. Boomers, by contrast, have been much less frugal than their elders, although it's also true that they will benefit much less from traditional pensions and secure retirement incomes than older Americans.
"What's interesting in the legacy transfer issue is to make sure that the boomers start to learn some of the estate-planning skills and gain some of the knowledge [they need] to help their parents," she says. Doing this will, in turn, also prepare the boomers themselves for more successful retirements.
Another survey finding is that boomers and elders have strong desires to avoid family conflicts in estate planning and legacy issues. Family communications are crucial to avoiding such conflicts. Many experts urge parents and adult children to have end-of-life conversations well before parental aging and health issues create a crisis and limit options. Such discussions should include living wills and health directives, details about important financial documents, and conversations about what's important to parents and children.
The actual details of parental inheritance decisions may or may not be important to such discussions. The Allianz survey suggests that neither boomers nor elders think they have the rights to demand specific behaviors of each other.
Included in the survey were similar sets of questions posed to both boomers and elders. The questions tended to elicit similar answers in terms of which aspects of legacy issues are most important. Here are the 10 most important matters for each group, and the percentage listing it as important.
What is important to boomers (percent who agree strongly or somewhat strongly with each statement):
1. Family stories are very important to me for keeping my family history and memories alive: 86 percent
2. It is very important to me that my parents have living wills or instructions if they are terminally ill or permanently unconscious: 84 percent
3. I trust my parents to do what they feel is best :81 percent
4. It is extremely important to me that future generations remember my parents and what mattered to them: 75 percent
5. Personal possessions are very important to me for keeping my family history alive: 64 percent
6 It is none of my business what my parents plan to do with their inheritance: 63 percent
7. If a child provides care for a parent, they should receive a greater share of the inheritance: 54 percent
8. It is my responsibility to start a conversation with my parents about their legacy: 43 percent
9. Knowing my parents' inheritance plans makes it much easier to plan my future: 39 percent
10. Children who have caused family conflict or who have treated the family with disrespect should receive a smaller share of inheritance: 35 percent
What is important to elders (percent who agree strongly or somewhat strongly with each statement):
1. It is very important to my children that I have a living will or instructions in case I am terminally ill or permanently unconscious: 82 percent
2. It is my responsibility to start a conversation with my children or heirs about my legacy: 78 percent
3. Family stories are very important to me for keeping my family history and memories alive: 74 percent
4. If a child takes on the responsibility of caring for a parent, they should receive a greater share of the inheritance: 64 percent
5. Personal possessions are very important to me for keeping my family history alive: 58 percent
6. Talking to my children helps me understand their wishes for my inheritance: 56 percent
7. It is extremely important to me that future generations remember what mattered most to me: 53 percent
8. A major goal of my life now is ensuring the happiness of future generations through the legacy I leave behind: 42 percent
9. It is none of my children's or heirs' business what I plan to do with my assets or possessions: 39 percent
10. My children or heirs care very little about possessions whose value is principally sentimental to me: 39 percent