During the next several decades, economists expect roughly $25 trillion in wealth to be handed down by the elder generation, $7.2 trillion of which will go to the boomers1 - constituting the largest intergenerational wealth transfer in history. Although inheritance is an increasingly vital piece of family financial planning, the subject of passing a legacy and inheritance is rarely discussed among families. Both parents and boomers have little idea how to even broach the topic. As a result, for many families, the process of inheritance will be rife with misunderstandings and conflict that are both emotionally and financially costly.
Allianz, in collaboration with Dr. Ken Dychtwald of Age Wave, created The Allianz American Legacies Study to better understand the hopes, fears and motivations related to the passing of values, assets and wealth between generations. By possessing an in-depth understanding of these often taboo topics, Allianz can provide actionable information and insights to families to ensure a positive legacy transfer.
Harris Interactive® fielded a nationwide online and telephone survey for Allianz and Ken Dychtwald among a total of 2,627 U.S. adults of whom 1,282 were age 40-59 (baby boomers) and 1,345 were age 65 and over (the elder generation).
The telephone survey was conducted between April 21 and May 2, 2005 among 2,004 U.S. adults, of whom 1,004 were baby boomers (age 40-59) and 1,000 were of the elder generation (age 65 and over). Figures for age by sex, education, race/ethnicity, household size, region, income, number of telephone lines and net-worth were weighted where necessary to align them with their actual proportions in the population.
The online survey was conducted in the United States between April 22 and 27, 2005 among an over-sample of 278 baby boomers (age 40 to 59) and 345 elders (age 65 and over) who both have a net worth of over $250,000. Figures for age by sex, education, race/ethnicity, region, income and net-worth were weighted where necessary to align them with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents' propensity to be online.
Though the online sample was not a probability sample, Harris Interactive estimates with 95 percent certainty that the results for both the boomer (1,282) and elder (1,345) samples have a sampling error of plus or minus 3 percentage points. Sampling error for the following sub-sample results: elders who have children (1,247), elders who have more than one child (1,128), boomers who consider themselves to be the Alpha Child (498), boomers whose parents are alive and who have siblings (857), and boomers whose parents are not alive and who have siblings (315) is higher and varies.
1 By John J. Havens and Paul G. Schervish "Why the $41 Trillion Wealth Transfer Estimate Is Still Valid: A Review of Challenges and Questions," The Journal of Gift Planning, 7, No. 1, (January 2003) pp.11-15, 47-50.