Generational Wealth Divide: Younger High Net Worth Americans May Reshape How Wealth Is Transferred to Future Generations According to New Schwab Survey
Key Highlights:
- Millionaire Millennials and Gen X are more than twice as likely to prefer sharing their wealth with the next generation during their lifetime compared to millionaire Boomers.
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Three in five wealthy Americans who intend to pass on wealth say they started planning their wealth transfer before the age of 45, and more than half started planning once they had a net worth of at least
.$1 million - Younger wealthy Americans are significantly more likely to stipulate how their wealth can be used by future generations.
Schwab’s survey shows that among wealthy Americans, defined as those with more than
Wealthy Millennials and Gen Xers are more than twice as likely to say they want to share their wealth with the next generation during their lives compared to millionaire Boomers, who are more likely to say they want to enjoy their money themselves during their lifetime. Younger wealthy Americans expect to distribute over twice as much of their wealth while alive compared to wealthy Boomers.
Overall, three in five (
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I want to preserve my money for the next generation or others after I pass |
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I want the next generation to enjoy my money while I’m still alive |
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I want to enjoy my money for myself while I’m still alive |
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I plan to distribute some portion of their wealth during my lifetime |
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I plan to distribute some portion of my wealth after my lifetime |
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Portion of wealth I plan to pass on after my lifetime (average, among those who plan to pass on assets) |
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“Schwab serves over a million multi-millionaires, and as they move from building wealth to preserving and passing it, we see an increasing need for specialized services and support around estate planning, wealth transfer, and legacy planning,” said Andrew D’Anna, Managing Director of Retail Client Experience at Charles Schwab. “According to our survey, younger Americans could be poised to reshape legacy planning and the future of how wealth is passed to the next generation. Understanding the changing dynamics underway, we are continually evolving and enhancing our services, such as increasing access to tax, trust, and estate planning specialists, creating self-serve digital experiences to help clients manage inheritance tasks, building out our planning and educational resources specific to this significant life event, and encouraging engagement and discourse across family members and generations.”
Wealth Distribution and Family Dialogue
On average, wealthy Americans who plan to pass their wealth estimate they will distribute about
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Approximate value I expect to pass (Total) |
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Approximate value of real estate I expect to pass |
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Three in five wealthy Americans (
Most wealthy Americans plan to distribute their wealth primarily across their spouse or partner, children, and charities, and most have communicated their plans with their beneficiaries, particularly their spouse (
According to wealthy Americans, the top reasons someone should create a plan are wealth and asset protection (
“It’s encouraging to see that a majority of wealthy Americans who plan to pass their wealth have started to formalize those plans and documents and communicate with their families,” said Susan Hirshman, Director of Wealth Management for Schwab Wealth Advisory and Schwab Center for Financial Research. “In addition to those foundational steps, we encourage families to ground discussions and planning around shared values and goals for wealth being transferred. These conversations can help heirs see themselves as wealth stewards, rather than just beneficiaries, and gain important perspective on the meaning of wealth, legacy, and the responsibilities that come with it.”
Legacy with Limits
Seventy percent of wealthy Americans who plan to pass on their fortune also use the wealth transfer process to stipulate how their wealth is used, such as setting an age at which the money can be accessed (
Nine in ten UHNW Americans stipulate how their wealth is used, and they often have stricter guidelines, such as requiring certain life milestones for distribution, mandating that funds be used for familial responsibilities, and maintaining career performance to access funds.
Younger wealthy Americans are more likely to provide their wealth with strings attached compared to older generations. Nearly all Millennials (
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(NET) Have some kind of stipulation |
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The age at which the money can be used |
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The recipients of specific items |
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How the money can be used |
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Tying distributions to life milestones (e.g., graduation, purchasing first home, marriage, children) |
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Using funds for certain familial responsibilities (e.g., family reunion) |
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Making a charitable gift as a prerequisite to distribution |
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Maintaining certain career performance (e.g., distribution based on earned income) |
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Maintaining certain academic performance (e.g., minimum GPA) |
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“It’s common for those who have built their wealth over time to want to have a say and guide how those assets are used, with benefits and safeguards for future generations top of mind,” said Hirshman. “We often see wealthy families add stipulations to help protect and preserve assets for multiple generations, encourage self-driven financial responsibility, and uphold long-term family values. They’re really trying to ensure that the family wealth has a positive impact.”
See the detailed results from Schwab’s survey of HNW Americans here.
About Schwab’s High Net Worth Investor Survey
The online survey was conducted by Logica Research from August 8, 2024, to September 2, 2024, among a national sample of 1,005 wealthy Americans with
Disclosures
The information here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.
All expressions of opinion are subject to change without notice in reaction to shifting market, economic or geopolitical conditions.
About Charles Schwab
At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.
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(1224-72Z1)
1 High net worth is defined as having more than
View source version on businesswire.com: https://www.businesswire.com/news/home/20241209249389/en/
Hibah Shariff
Charles Schwab
415-667-0507
hibah.shariff@schwab.com
Source: The Charles Schwab Corporation