Posted by: Heinz Brisske

Family Legacy is More Important than Personal Wealth, According to Study

Some very interesting findings came out of a study conducted by the Allianz Life Insurance Company of North America earlier this year. The 2012 American Legacies Pulse Study sought input from baby boomers regarding their attitude about family legacies and inheriting physical possessions. The study explored opinions on both the giving and receiving side of the equation.

Surprisingly, baby boomers rated keeping their family’s legacy going through stories more important than receiving a financial inheritance. The study seems to reaffirm the findings of a prior study, conducted in 2005, that baby boomers and their parents are more concerned about family stories being passed down than being awarded an inheritance. An estimated 86 percent of boomers age 47 to 66, and 74 percent of elders age 72 and over agreed that family stories are the most important aspect of their legacy, ahead of personal possessions (64 percent for boomers, 58 percent for elders) and the expectation of an inheritance for financial well-being (9 percent for boomers; 14 percent for elders).

In the original study, conducted in 2005, an estimated 77 percent of both boomers and elders cited the importance of family values and life lessons as the most important part of a legacy. Allianz’s first study also found that an estimated 39 percent of elders believed that it was very important for them to pass on a financial inheritance to their children, but only 10 percent of the heirs judged receiving money or real estate from their parents to be very important. By contrast, an estimated 77 percent of the children, all part of the baby boom generation, said receiving their parents’ values and life lessons were very important to them.

One of the questions asked of boomers and elders was whether an inheritance is “owed.” Only 4 percent said they felt they were “owed an inheritance” in the 2012 survey — the same percentage as in 2005. But the number of elders who feel they owe their children an inheritance actually went down, from 22 percent in 2005 to 14 percent in the 2012 survey. The reason for that drop may be the result of a greater concern about ever-increasing living expenses since 2005 because of economic conditions.

Boomers and their parents are not as in-sync on actually doing the work of legacy planning. The 2012 results show that elders have initiated conversations with their children on the topic and are generally prepared when it comes to legacy planning. It is estimated that 75 percent of elders have obtained professional assistance, such as a lawyer, financial professional, accountant or estate planner in planning their inheritance, and 79 percent have had some type of in-depth discussion with their children about legacy planning.

By contrast, less than half of boomers have obtained professional legacy planning assistance and nearly 50 percent have never initiated a conversation with their own children about inheritance issues. Furthermore, one in four boomers have no estate plan in place, compared to 1 in 20 elders, a substantial difference.

The 2012 American Legacies Pulse Study was conducted online by SNG Research Corporation from Jan. 12-19 and consisted of an estimated 2,007 surveys – 1,000 with respondents aged 44 to 67 and 1,007 with respondents age 72 and over. The income of the respondents varied widely.