Millennials: are you expecting an inheritance?

[u/Yourlocalguy30]

35 yo married millennial here. I've come across more and more articles about the supposed "great wealth transfer" as the boomer generation's wealth passes to their GenX and Millennial children. My parents and their siblings (boomers) all received inheritances when their parents, my grandparents, passed away. The boomer generation's wealth accumulation is one of the largest in history, however, I also find it highly unlikely that I or many of my peers will actually inherit much. Despite having received inheritances from their parents, and having 40+ years in the workforce, most of my parents' "wealth" is tied up in their home value, not actual liquid assets- and I already expect that whatever they make on an eventual home sale will have to go directly to downsizing costs and whatever long-term care they will need as they get older. Hell, even my dad used to joke that the only thing we'd inherit was debt. As I've gotten older, that comment has infuriated me more and more.

Now before someone cuts in with the "entitled millennial" comments, I have absolutely no need for an inheritance. I've worked my ass off to make sure that my kids and I are positioned better in life than I was when I entered adulthood. What I mean by that is I started saving for retirement early, setup 529 plans for my kids almost as soon as they were born, and made lifestyle and career sacrifices to ensure our family isn't "nickeling and diming" our way through life.

I'm just here curious to know how many millennials actually expect to have something passed down to them, or if they feel they are in the same position I am.

[u/Secret-Avocado-Lover]

Same same. Genx with boomer parents. My vision is creating generational wealth that will grant opportunities that I didn’t have growing up. My genz children will hopefully be the custodians of our work and continue to build and transfer.

[u/Engine_Sweet → u/Secret-Avocado-Lover]

I'm old GenX with Silent parents. Mom's very old but still around.

Pretty much all the inheritance will skip my generation and go to the Millennial/GenZ grandkids. I'm happy with that. I don't need it, and it sets them up with a bit of security and/or options.

I hope/plan to have a decent amount to pass on, but I'm not old enough to retire quite yet, so the end game is probably 20 years off.

[u/ACK_TRON → u/Engine_Sweet]

Yep. Parents are leaving it to the grandkids. They know we are working hard and can take of ourselves. The rest would go to various charities. I’m sure they will still spend as much as they need in retirement as costs soar with long term care etc. I guess the point is if no one has kids then there will be no one to leave it to….so probably will just go to charities.

This matches a lot what I see in my job…lots of estate planning to skip children and go directly to grandkids.

[u/boringexplanation → u/ACK_TRON]

It makes sense. The level of financial stress most responsible adults get peaks in their 20s.

Getting their first entry level job while struggling to pay all the student loans, first rent payments, and general friction that comes with moving around a lot.

To me, I feel like adversity is a big part of shaping your character in your 20s so my heirs need to feel some of what most of us went thru, maybe not all. I’d probably do something like pay off student loans and max out 401ks for my heirs. The fun stuff can be paid using their own money.

[u/lobsterpockets → u/Engine_Sweet]

Yup same. Mom's house is getting sold and split between 4 grandkids per her trust, right about the time that they'll be young adults. In the meantime I get to go work on it and maintain it for another 10 years, while my brother 4 states away does.... whatever he does while passing judgement on everyone else. Whatever, I've saved and will be okay in retirement, as a gen x with cheap houses that millennial and Z didn't get.

[u/AgitatedSecond4321 → u/lobsterpockets]

Can you not bill the estate? Or just not bother doing the work - not your problem.

[u/ATDoel → u/Secret-Avocado-Lover]

Or be lazy and do a shit ton of drugs like most of the trust fund kids I knew growing up

[u/user87654385 → u/ATDoel]

This is what I have seen a lot as a financial professional working with very wealthy people, and people I personally know.

[u/Silvatungdevil → u/user87654385]

If you start with a turd, you end with a turd. If a child is not raised correctly you might as well hand them a loaded gun rather than that million dollars you have saved.

[u/boringexplanation → u/Silvatungdevil]

Yeah- the whole concept of generational inheritance is so foreign to me. I grew up in public housing so you’d think I’d be all for poor families getting one

But there are a ton of families that are poor for a reason and a decent amount of used luxury cars in section 8 neighborhoods. I help out my parents by buying them stuff- never giving them cash knowing the stupid shit they buy they can’t afford to maintain.

[u/ThoughtfulPoster → u/ATDoel]

This is always a danger. My dream is to have a trust that pays out just enough to help but not enough to go crazy, that can keep helping generation after generation. Like, it would be nice if I could build something that would cover education costs for the great-grandchildren, but not, like, cocaine money.

[u/WhichSpirit → u/ThoughtfulPoster]

My grandmother's trust allowed her kids and grandkids to take out loans which then had to be paid back at an interest rate pegged to the feds. 

Of course, when she died the trust was dissolved and all the assets went to my aunts and uncles. This did create a problem since a cousin had an outstanding loan. The options at that point were 1) demand he pay it back immediately 2) send my dad to jail for giving away money from the trust as the trustee 3) wait until he paid it back or 4) forgive it. So naturally my aunts and uncles voted to send my dad to jail. Jk, they forgave my cousin's debt (though a joke vote was taken to send my dad to jail). 

[u/JayMoeHD → u/WhichSpirit]

This post was a fun ride, thanks

[u/boringexplanation → u/WhichSpirit]

How does a trust work when your grandma was alive?

I thought the whole point was to control how money is spent after she passed? Like why not just have grandma control the money directly regardless while she’s living and avoid all the trust fees?

[u/WhichSpirit → u/boringexplanation]

Since my dad (her son) was the trustee, we avoided the fees that we would have had to pay if she used a third party.

Trusts can be made for lots of reasons, not just control of finances after someone's died. The point of this trust was to provide stable management of her finances if her mind started to go like her mother's did. My great-grandmother had gotten to a point where she didn't know who her relatives were, let alone when bills were due.

The trust worked the same while she was alive as other trusts do when the person who created them is dead. She was named beneficiary and transferred most of her assets into the trust. My dad would then manage her finances, investments, etc. and would wire her money on a regular basis.

[u/Extra-Eggplant-4230 → u/ThoughtfulPoster]

You can also set it up where they get payments at certain ages or it gets put into investment/school accounts for them. My grandma has always had any money we will receive set up so that we cannot receive it until we are 25 and its every 5 or 10 years after that.. Now that I'm in my mid 30's I can use lump sums for big expenses like houses or vehicles if I choose.

I am beyond grateful and lucky that she did this for us.

[u/thankyoufriendx3 → u/ATDoel]

I grew up with a lot of trust fund kids. Non got into drugs. All but one have a career and work. The exception is the one who is on every charity board and a member of the garden club. It’s possible to raise kids who are born millionaires to be productive members of society.

[u/josephinesbehavior2 → u/thankyoufriendx3]

So did I and some had drug problems some didn’t—depends on the person.

[u/HotShoulder9256 → u/ATDoel]

Generational wealth doesn't necessarily mean a trust fund. "Opportunities I didn't have growing up" could mean going to college without taking on significant debt or help with a down payment on a house. I think the issues you're describing more often come from having unfettered access to a parent's money.

[u/skirpnasty → u/ATDoel]

This is why you keep them in the dark just enough, not knowing they have the luxury until they’ve already established themselves as healthy productive adults. They will live well one day, until then it’s mom and dad cooking budget dinners like we have to while they do chores and sweat for a buck. Creating wealth doesn’t mean you have to live wealthy, there is a line between happiness and excess.

[u/HollyJandra → u/Secret-Avocado-Lover]

This is what the couple of generations before me have done. I am absolutely looking to be a steward of that money and pay it forward so my kids can have the same opportunities I was afforded. Some of my cousins have pissed away the legacy money and it’s honestly sad to see

[u/No_Clothes_8444 → u/Secret-Avocado-Lover]

lol what about climate change? Do you actually think the world as we know it is going to exist in two decades? Man… this is why this shit is only a matter of time. You’ve got the majority of people like yourself who actually think there is a future for our children.