It used to be a common practice for parents to leave an inheritance for their children, and many parents in the past took great care to do so. However, a recent study shows that inheritance practices in New Jersey and elsewhere are changing. As parents are living longer, they are depleting more of their savings and retirement funds, leaving few to no assets for their children.
TD Ameritrade conducted the study, which shows that only 16 percent of parents believe they will have the means to leave an inheritance for their children. It is now common for older adults not to have enough in their nest egg to sustain themselves through their retirement years.
Even if parents are unable to leave an inheritance, research shows that many of them are helping their adult children pay rising education costs. Additionally, they are less likely to seek their children's help if they run into financial problems during their retirement years.
The TD Ameritrade study also reports that 40 percent of young adults believe that they will inherit something from their parents. However, they may not expect a significant inheritance. Many adult children are focused on setting themselves up for financial stability so they do not have to rely on their parents to provide for them.
It can be daunting for parents in New Jersey and elsewhere to discuss estate and inheritance plans with their children, but it is important for children to know what to expect. Individuals planning to leave an inheritance may wish to seek guidance about any problems that may arise during the settlement of the estate. Having an estate plan can offer peace of mind to loved ones who want to ensure that assets are distributed as desired.
Source: ABC 13 KTRK, "Inheritance trends changing in America," Jeff Ehling, Dec. 24, 2012