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Millennials Are Waiting For A $30T Inheritance That Might Not Come

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There was a time when there was no question that your parents’ generation would pass on their millions in an inheritance. Keep it in the family and make sure your kids are sitting pretty for their own future.

With that in mind, there has perhaps never been a more lucrative time to be on the cusp of an inheritance. Baby boomers are said to be the wealthiest generation in history, worth an estimated $30 trillion. But will their Millennial children actually get their hands on this wealth? Increasingly, surveys say ‘no’.

Over the 30 to 40 years, this $30 trillion in financial and non-financial assets is expected—under traditional circumstances—to pass from baby boomers to their Millennial heirs. To put this into perspective, baby boomers controls at least 70 percent  of all disposable income in the U.S. So for the more than 75 million millennials born between 1981 and 1997 it would be a windfall inheritance.

Or will it?

New research suggests that baby boomers aren’t necessarily willing to part with their wealth and might instead take this opportunity to pay themselves back for all their years of supporting their children: tuition, starter homes, cars—you name it. Millennials might have to leave the nest empty-handed and make wealth on their own.

Not only are baby boomers not winding down their spending as they near retirement, they are actually increasing spending. Writing for CNBC, Gabriel Garcia, managing director at BNY Mellon’s Pershing Advisor Solutions, says baby boomers are spending up to $400 billion annually on consumer goods. They’ve become shopaholics, and they love to travel. They’ve also become more charitable. All of this is diminishing the Millennial inheritance. Related: The Tech Giants Poised For A Breakout

According to a recent Gransnet survey of grandparents aged 50–70, one in six plans to spend all their money before they die.

Meanwhile, a Hearts and Wallets study of participants in their 50s and 60s found that only 40 percent planned to leave inheritances, while 30 percent specifically expected to spend all their money.

And the ‘great wealth transfer’ of wealth is further convoluted by questions of who is actually going to conduct it because the Millennial generation is highly skeptical of wealth management advisors favored by the Baby Boomers.

Only 6 percent  of households use the estate planning services of their primary wealth advisor mostly because of their different attitudes about investing and advisors. While boomers feel comfortable with the advisor-led model, millennials, guided by social media, often demand greater transparency and control.

"The bottom line is that millennials do not trust conventional financial advisors," says Christopher Ma, director of the George Investments Institute at Stetson University in DeLand, Florida. "They were all raised in the tech age. They believe everything can be self-taught without human contact."

A recent Facebook study painted a similar story, noting that only 8 percent of Millennials trust financial institutions, 45 percent would switch financial firms for any better option, and millennials are 2 1/2 times likelier than Gen Xers or baby boomers to use robo-advisers to manage their wealth.

By Fred Dunkley for Safehaven.com

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