Heirs of American millionaires are expected to make their own way in life. Thats one of the key findings of new survey from PNC Wealth Management.
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 firms 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two in 10 (19%) mention property as the biggest part of their legacy while 15% say the idea of leaving a legacy is an outdated notion.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.