Many millennials can eagerly anticipate becoming the “richest generation in history” over the next 20 years as they are set to inherit their baby boomer parents’ wealth. However, a large portion of millennials are not expecting a windfall of cash when their parents pass away.
The estate planning company Trust & Will analyzed proprietary data from 52,505 people and found that only a select few can kick up their feet and bank on the $90 trillion “Great Wealth Transfer.”
Today, more than half of America’s wealth belongs to baby boomers, with most of it tied to their real estate as they hold off downsizing.
However, a third of millennials do not know whether their parents have an estate plan and 13% said they know their parents do not have a trust or will.
In fact, just 43% of millennials expect to gain financially from the death of a loved one—and only 50% of those individuals are relying on it as part of their financial plan.
‘The Sandwich Generation’
Trust & Will’s data didn’t dive into why the majority of millennials don’t expect their parents’ assets to wind up in their hands, but at around 30-to-40-plus years old, many with children, the generation can’t afford to wait two more decades to secure their financial footing.
Most millennials have already bought their own home, instead of waiting to inherit one in their sixties.
The report also highlights that millennials are a “sandwich generation,” with 39% of those surveyed caring for both their children and their elderly parents; 58% said that will affect their ability to pass on wealth.
Realistically, people are living longer and the cost of care is only going up.
So, millennials—many of whom will one day have to shoulder the financial burden of specialized care for their parents—are probably banking on using their parents’ assets to front such costs.
It’s perhaps why many of those who do expect to inherit can’t rely on the wealth transfer in their grand plans for their future, like buying a bigger house or taking a once-in-a-lifetime vacation.
Millennials are still using the bank of Mom and Dad, though
Although many millennials won’t benefit from the great wealth transfer—they don’t actually need to.
That’s because a sizable chunk of the generation is already dipping into their inheritance while their parents are still alive.
New research shows that more than a third of young people who are planning to buy a home expect their parents, or family, to help with their down payment in the form of a cash gift.
Meanwhile, separate data shows that millennials are more likely than the generations before them to have dipped into the bank of Mom and Dad to become homeowners.
What’s more, financially supporting your adult children doesn’t stop at helping them get on the property ladder.
According to Pew Research Center, a third of millennials in their early thirties are still being bankrolled by their parents, who are paying off their everyday expenses and streaming subscriptions.