More than eight in 10 American millionaires (82%) believe that each generation should be responsible for creating its own wealth, up from 65% who said the same thing in 2007 when the survey was last conducted. The overwhelming majority (84%) see raising successful, hard-working children as their most important goal, an increase from 75% five years ago.
“It is human to want your children to have a better life than you have had, but too much financial support might, at some point, have negative longer-term consequences,” Steve Pappaterra, senior vice president and managing director of wealth planning for PNC Wealth Management, said in a statement.
In fact, the financial support is expected to fall, according to the firm’s ninth annual Wealth and Values Survey. Nearly one-third (31%) of the millionaires surveyed anticipate a decline in the wealth they expect to pass on to the next generation, more than double the number of millionaires who said so five years ago.
Still, almost half (49%) expect to pass on at least $500,000 of wealth to their heirs. Nearly nine in 10 (86%) intend to leave something tangible for the next generation in the form of property, family heirlooms, or ownership/participation in a business. More than four in 10 (46%) expect to pass on assets through a trust fund.
A vast majority of millionaires have taken some steps to plan for their ultimate transfer of wealth, according to the survey. Most have wills (82%) and some have established trusts (52%) and/or estate managers (52%).
That said, nearly one in five (18%) do not have a will and seven in 10 do not have a formal financial plan. Among wealthy business owners, only 15% have a formal succession plan in place.
The notion of legacy, however, went beyond the simple step of transferring financial assets to the next generation, according to the findings. Nearly half (46%) of American millionaires said it means being remembered and passing on important family traditions. About two in 10 (19%) mention property as the biggest part of their legacy while 15% say the idea of leaving a legacy is an outdated notion.
The survey polled 560 millionaires with assets of $1 million or more in August and September 2012.
