According to a recent survey, American millionaires are not planning on leaving much of their wealth to charity. Most of the millionaires polled report that they plan on leaving their children or grandchildren inheritances, while only a small number plan on leaving large sums to charities. The poll comes as the nation is at the beginning of one of the greatest cross-generational wealth transfers in its history.
Children of Millionaires to Receive Inheritances
According to CNBC’s Millionaire’s Survey, Americans with more than $1 million in assets plan on leaving those assets to their children instead of charities. Over half of the millionaires polled said that they plan to leave each of their children $1 million or more. About 25 percent said they planned on leaving their children at least $500,000, while 88 percent of those with assets of $5 million or more said that they would leave their children inheritances of at least $1 million each.
Charities, on the other hand, stand to receive much less than the children. The millionaires are nearly unanimous in their desire to leave most of their wealth to their children instead of charities. 20 percent of survey respondents said they plan on leaving nothing at all to charities, while two-thirds said they planned on leaving less than 10 percent.
Large Wealth Transfer in Progress
With the Baby Boomer generation entering old age, the wealth this large generation has acquired is set to change hands over the next several decades. This money being passed down has been dubbed ‘the great wealth transfer,’ and for good reason. It’s estimated that between $30 and $59 trillion could change hands over the next several decades. It appears that most of this money will pass between family members, and not go to charitable causes or groups.
Some high-profile people, such as Bill Gates and Warren Buffet, have made it known that they plan on leaving most of their fortunes to philanthropic organizations. Even with their well-known intentions to give to charitable institutions, these high-profile cases seem to be the exception to the rule. Most millionaires are not planning on leaving much at all to anyone other than children or grandchildren.
Squandered Wealth Not a Great Concern
Even though there is a widely known phenomenon of wealth leaving families by the third-generation, the millionaires surveyed don’t feel concerned about squandered inheritances. 59 percent of the people surveyed say no inheritance is too large, and 41 percent were comfortable with their children being able to manage the money responsibly. Less than 20 percent of respondents said that they had concerns about leaving behind large sums because they worried about their children not being self-reliant.