Legacy Issues Misunderstood, Allianz Study Finds

Most Baby Boomers and the elder generation, those 65 and over, agree that they feel confident discussing key issues surrounding inheritance and legacy planning. However, fewer than half have actually done so with their own families, according to a survey conducted on behalf of Allianz Life and market consultant Age Wave.

Perhaps even more telling, the "Allianz American Legacies Study" revealed that the transfer of financial assets is much less important to Americans than the transfer of personal possessions and core beliefs and values.

"Many people wrongly assume the most important issue among families is money and wealth transfer - it's not," said Ken Dychtwald, president of Age Wage.

Harris Interactive conducted a series of online and telephone surveys among 1,282 Baby Boomers and 1,345 of the elder generation. According to estimates, the elder generation will bequeath $25 trillion, with $7.2 trillion of that going to the Boomers.

"This national survey found that for the overwhelming majority, legacy transfer has to do with deeper, more emotional issues," Dychtwald said. "An inheritance focuses primarily on the money, but a true legacy also includes memories, lessons and values you teach to your children over a lifetime."

Elders believe more strongly than Baby Boomers that they owe their children an inheritance, with 22% agreeing with that statement, over 3% of Boomers. However, both groups overwhelmingly placed more value - in fact, by 10 times - on their non-financial legacy, such as ethics, morality, faith and religion, over financial transfers.

Supporting that assertion, Baby Boomers whose parents have passed away said that fulfilling last wishes and distributing personal possessions were five times more likely to generate family conflict than the distribution of financial assets during the settlement of an estate.

The study revealed five key points that are most critical to legacy planning for both generations: values trump valuables in importance; people think they are discussing inheritance with their heirs but few are having meaningful conversations; most families have an "alpha child," a strong communicator to whom a parent turns first in many matters, including legacy planning; performance distribution, where the child who has provided most care for the parent receives the largest inheritance, is most in favor among the high net worth; and, in finding an adviser for legacy planning, establishing good communication and a strong relationship are most important.