The Great Wealth Transfer Starts with the Great Wealth Talk, Edward Jones Research Finds

Despite half of Americans expecting to receive an inheritance within the next 10 years, family discussions remain lacking

ST. LOUIS, Feb. 27, 2024 /PRNewswire/ -- More than a third of Americans (35%) do not plan on discussing transfer of wealth with their families, according to new 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 values and the importance of health, family, and purpose.

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 2045¹, 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.

"We know it can be extremely uncomfortable and nearly impossible to separate emotions from the financial decisions necessary when planning inheritance and wealth transfer, particularly as givers navigate family priorities beyond finances," said Lena Haas, Head of Wealth Management Advice and Solutions at Edward Jones. "However, the wealth transfer is well underway, so it's more important than ever to connect as a family, with the expert guidance of a financial professional to help navigate the emotions and educate on the process."

The Wealth Transfer Isn't One Size Fits All

Americans generally agree that the transfer of wealth will look different for future generations, with 68% acknowledging that people living longer and spending more money than they used to will affect how much wealth is passed down. Given this, the great wealth transfer will not necessarily be the same for everyone.

The qualitative and quantitative research uncovered four scenarios of what this will look like in practice:

• Traditional Giving: In traditional fashion, older adults pass their wealth to children through a mix of assets, cash, equities, and real estate. As people live longer and spend more, younger generations want to make sure their parents have enough, while older generations acknowledge the importance of starting the conversation early with their children.
• Giving While Living: Rather than passing along a traditional inheritance, older adults instead support in real-time, such as buying family experiences, contributing to education, or purchasing homes. This leaves Millennials and Gen Z unsure if there will be anything left for their inheritance, or if they may have to financially contribute to their parents' retirement costs.
• Generational Skip: Older adults forgo giving a traditional inheritance to adult children, instead giving wealth to their grandchildren for things like education and future security – with a quarter of grandparents (25%) noting that their grandchildren will be better stewards of their wealth. Having a thoughtful conversation about this is crucial to prevent relationship damage with the skipped generation.
• No Inheritance: Longevity and lifestyle are changing when and how much wealth there is to leave family. Living longer may mean many families are spending down their assets to pay for the additional years of life that few have anticipated. For others, health-related and long-term care expenses may have drained a lifetime of savings, leaving little to no inheritance.

Limited Communication Leads to Unpreparedness

Despite 71% of adults with children feeling comfortable having generational wealth discussions, only a quarter of Americans (27%) have actually had the discussion. 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 around 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, PhD, 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." 

While passing on inheritances can be a source of pride (34%) and fulfillment (33%), only about a quarter of adults feel prepared (23%) and confident (25%) in the process. On the other side, 61% of those receiving an inheritance report feeling gratitude around receiving an inheritance, yet only 25% feel prepared in the process and one in five (19%) feel anxious. Engaging an expert can be valuable in curbing these anxieties, as 57% of Americans believe having a financial professional guide and inform their family discussions around wealth transfer and inheritance would make planning and reaching a family consensus easier.

To learn more about this research, visit www.edwardjones.com/estateplanning.

Survey Methodology

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) combined with interviews, focus groups and cognitive mapping conducted by NEXT360 Partners with participants in Atlanta, Charlotte, Cleveland, Dallas/Ft. Worth, Denver, Los Angeles, Phoenix, and Raleigh-Durham.

About Edward Jones

Edward Jones is a leading financial services firm in the U.S. and through its affiliate in Canada. The firm's more than 19,000 financial advisors serve more than 8 million clients with a total of $1.9 trillion in client assets under care at the end of December 2023. Edward Jones' purpose is to partner for positive impact to improve the lives of its clients and colleagues, and together, better our communities and society. Through the dedication of the firm's approximately 52,000 associates and our branch presence in 68% of U.S. counties, the firm is committed to helping more people achieve financially what is most important to them. The Edward Jones website is at www.edwardjones.com, and its recruiting website is www.careers.edwardjones.com. Member SIPC.

About NEXT360 Partners

NEXT360 Partners, LLC is a global action research and strategy consultancy delivering expert perspective on demographic, cultural, policy, and technological change. In partnership with its clients, NEXT360 conducts custom research empowering leaders in business and government to discover new market opportunities, develop winning strategies, and to deliver results. Learn more about what's your NEXT at https://next360partners.com.

About Morning Consult

Morning Consult is a global decision intelligence company changing how modern leaders make smarter, faster, better decisions. The company pairs its proprietary high-frequency data with applied artificial intelligence to better inform decisions on what people think and how they will act. Learn more at morningconsult.com.

¹ Cerulli Associates: Cerulli Anticipates $84 Trillion in Wealth Transfers Through 2045

SOURCE Edward Jones