A recent article by Suzanne Wooley, published by Charles Schwab, suggests that according to survey data, the boomers are stingier when it comes to passing wealthy on to loved ones, at least while they are still alive. According the article, only 21% of baby boomers with investable assets of at least $1 million wanted to see the next generation enjoy some of their money while they are still alive, compared to 53% of millennials and 44% of Gen Xers.
That article got me to thinking about the clients we serve every day with estate planning needs. I must say, I have not found baby boomers stingy at all when it comes to caring for their descendants. In fact, I’ve found them to be very intentional about protecting not only their children, but also their grandchildren. How do I see that happen?
- Establishing college funds for grandchildren, contributing to 529(b) funds or other gifting trusts.
- Using their annual gift exclusions (gifts not requiring a gift tax return) of $18,000 in 2024, increasing to $19,000 for 2025. Since these limits are per person, not per couple, a couple can make significant gifts over the years to pass on some of their wealth to descendants as they buy homes, start families and otherwise climb the social ladder.
- Not just leaving inheritances to heirs, but taking the time and effort to create asset protected trusts, which allow responsible children to make their own management decisions for their trusts, while still protecting those assets litigious claimants. Others are willing to recognize that some of their children may not be capable of managing an inheritance so they provide for competent management through a professional trustee.
Of course, every generation has some who just prefer to enjoy what they’ve worked for, and the kids can fend for themselves. But generally, the baby boomers I meet on a regular basis have their descendants front and center when it comes to their estate planning.
If you want to learn more about how to wisely set your descendants up for success through intentional planning, reach out to one of our attorneys.
Michael G. Carroll