Many Americans have no plans to discuss wealth transfer with families

More than a third of Americans (35%) do not plan on discussing transfer of wealth with their families, according to research from Edward Jones.

In partnership with NEXT360 Partners and Morning Consult, Edward Jones set out to understand Americans' perceptions of generational wealth and their plans to inherit or pass on wealth, inclusive of not only money and other assets, but also of values and the importance of health, family, and purpose.

Key findings

The study revealed that nearly half of all Americans (48%) plan to leave an inheritance, with 45% of those planning to leave it to only their children, and 36% planning to leave it to both their children and their grandchildren. It is estimated that Baby Boomers and the Silent Generation will pass down a combined $84.4 trillion in assets through 2045, making it critical for younger generations to discuss transfer of wealth with their families – and help make sure they are prepared for what to do with it, the survey said.

Few have discussed wealth transfer

Although 71% of adults with children feel comfortable in having generational wealth discussions, only a quarter of Americans (27%) have actually had these discussions, the survey said.

Among Americans who have or plan to have generational wealth discussions with their families, roughly two-in-five have already discussed savings for retirement (40%) and managing personal finances (36%). However, not many have discussed important topics like charitable giving (21%) and family business succession (23%). On the other hand, the research found that two-thirds of those planning to allocate funds to heirs (66%) are planning to leave instructions on inheritance, but there is limited communication about what this direction means for the receiver.

"With people living longer, the wealth-transfer conversation needs to be a dynamic, ongoing dialogue. 'The Talk' must happen before 'The Transfer,'" said Joe Coughlin, Ph.D., senior advisor to NEXT360 Partners. "Our research found that there are a lot of assumptions about inheritance, but limited effort to clarify through a discussion. 'The Talk' is critical to manage family harmony, uncertainty, and the financial complexity of passing wealth.”

But many Americans are not having these wealth-transfer discussions with their families for a variety of reasons. As explained by Amy Theisen, senior strategist, estate and legacy at Edward Jones, the wealth-transfer discussion is inherently emotional and may be uncomfortable for some. Some families avoid the conversation while others assume they have had the conversation and that children/receivers of inheritance already know their plans – but those are big assumptions and often not backed up by actual discussions.

“For many families, ‘The Talk’ simply isn’t urgent until it is. But with people living longer and increased financial complexity, the wealth transfer conversation needs to be a dynamic, ongoing dialogue,” Theisen said. “Our research found that despite nearly half of Americans (48%) expecting to receive an inheritance within the next 10 years, more than a third (35%) do not plan on discussing the transfer of wealth with their families.”

By not having these important discussions about wealth transfer, the receivers are left with questions and a lack of clarity on what they may receive, and what the givers thoughts were regarding the use of the inheritance, Theisen added. “In our research,” she added, “both givers and receivers reported feeling largely unprepared for the wealth transfer. Only about a quarter of adults feel prepared (23%) and confident (25%) in passing on an inheritance, and only 25% feel prepared and one in five (19%) feel anxious about receiving an inheritance.”

Theisen said that the Edward Jones research shows there are three main types of giving: traditional, giving while living, and skipping a generation. For older adults who want to give while they’re living, their Millennial and Gen Z children are left unsure if there will be anything left of their inheritance, or if they may have to instead financially contribute to their parents’ retirement. “Givers who skip a generation – like grandparents who leave an inheritance solely to their grandchildren – could cause relationship damage with the skipped generation without a thoughtful conversation,” she said.

Helping to start a creative dialogue

The research showed that a lack of discussion can leave receivers with many questions, feeling uncertain and worried, but when it comes to having conversations around wealth transfer, an experienced third party can help replace reaction with reason to facilitate productive dialogue, added Theisen. “Our study found that 57% of Americans believe having a financial professional guide their family discussions around wealth transfer and inheritance would make planning and reaching a family consensus easier,” she said.

Theisen added that a financial advisor can play several roles in the great wealth transfer, including:

• An agenda setter
• A moderator
• A coach
• An organizer
• An educator
• And a planner

“For Americans planning to transfer their wealth, working with a financial advisor who has helped them develop a personalized, long-term financial strategy can help them feel more prepared and confident to give or receive an inheritance, and facilitate open communication between generations about inheritance plans to decrease uncertainty,” Theisen said.

Edward Jones, in partnership with Morning Consult and NEXT360 Partners, LLC, conducted a mixed-methods study combining a nationwide online survey (fielded between December 28 – 29, 2023) executed by Morning Consult (among a U.S. national sample of 2,202 adults reflecting the demographic profile of the United States). This was combined with interviews, focus groups and cognitive mapping conducted by NEXT360 Partners, with participants in several cities.

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]. 

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