The United States sits on the doorstep of the greatest intergenerational wealth transfer in human history. During the next three to four decades, the baby boomer generation is expected to pass along about $30 trillion in financial and nonfinancial assets to their children and grandchildren, according to consulting firm Accenture.
While having the ability to pass along a financial legacy seems like a good thing, for many it can be a source of stress, concern and worry. When parents die, division of their remaining assets frequently ends up being the catalyst for family frustration, anger and contention.
To minimize the drama, here are some tips to help you determine the type of financial legacy you want to leave.
Take care of yourself
“It's your money, so how compelled should you feel to save it to benefit someone else?” said Johnathon Pond in an article for AARP. “No one needs or deserves your savings more than you. If you can simply avoid becoming a financial burden on your children or other family members, you've accomplished something wonderful.”
Pond explains some parents end up impairing their financial futures because they feel obligated to provide financial assistance to adult children.
Build some memories
Instead of letting unneeded assets accumulate, consider spending money now on activities or things that can bring your family closer. Take your children and grandchildren on a vacation getaway. If you can afford it, do it regularly.
A study done at Purdue University found family vacations contribute positively to family bonding, communication and solidarity. Time spent together building family memories and isolated from ordinary everyday activities like work and school help build positive connections.
The Purdue study found even though family vacations create stress, the benefits of the shared adventures outweigh the risks, even in families that are not particularly close.