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.
- 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.
A generational shift is emerging among wealthy Americans
planning to pass their wealth, according to Schwab’s new survey of
more than 1,000 high net worth1 (HNW) Americans, as younger wealthy
Americans break from tradition by opting to transfer their wealth
during their lives, rather than waiting until after death. They’re
also planning a more prescriptive approach to how their wealth is
used.
Schwab’s survey shows that among wealthy Americans, defined as
those with more than $1 million in investable assets, 97% plan to
transfer their wealth, with 36% preferring that the next generation
enjoy their wealth while they’re still living and 39% preferring to
preserve their money for the next generation until after they pass
away.
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 (61%) wealthy Americans say that passing
at least some of their wealth during their lifetime is important
because they can help provide financial support and assistance to
their beneficiaries (46%), share in their joy, and make memories
together (36%). Most wealthy Americans anticipate a mix of both
approaches, with plans to distribute about 40% of their assets
during their lives and leave the remainder to pass after death.
All Wealthy Americans
Wealthy Millennials
Wealthy
Gen X
Wealthy Boomers
I want to preserve my money for the next
generation or others after I pass
39%
32%
45%
34%
I want the next generation to enjoy my
money while I’m still alive
36%
53%
44%
21%
I want to enjoy my money for myself while
I’m still alive
25%
15%
11%
45%
I plan to distribute some portion of their
wealth during my lifetime
80%
97%
97%
56%
Portion of wealth I plan to pass on during
my lifetime (average, among those who plan to pass on assets)
39%
52%
49%
19%
I plan to distribute some portion of my
wealth after my lifetime
87%
97%
98%
73%
Portion of wealth I plan to pass on after
my lifetime (average, among those who plan to pass on assets)
61%
48%
51%
81%
“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 $4.1 million in assets, with
about 40% of that value in the form of real estate ($1.6 million),
and the rest in investments (31%), cash (18%), and death benefit
proceeds from life insurance (11%). The vast majority (85%) feel
that the amount is “enough.” Ultra-high net worth (UHNW) Americans,
those with more than $10 million in investable assets, plan to pass
on significantly more, reporting an average value of $11.9 million,
with one in five (23%) fearing they may be giving too much to their
heirs.
All Wealthy Americans
Wealthy Millennials
Wealthy
Gen X
Wealthy Boomers
Approximate value I expect to pass
(Total)
$4.1M
$4.7M
$4.8M
$3.1M
Approximate value of real estate I expect
to pass
$1.6M
$2.2M
$2.5M
$750K
Approximate value of investments I expect
to pass
$1.3M
$770K
$780K
$1.6M
Approximate value of cash I expect to
pass
$740K
$1.0M
$830K
$550K
Approximate value of death benefit
proceeds I expect to pass
$440K
$670K
$710K
$170K
Three in five wealthy Americans (63%) who intend to pass on
wealth say they started planning their wealth transfer before the
age of 45 and recommend others do the same. In terms of assets,
more than half of wealthy Americans (56%) started planning once
they had a net worth of $1 million or more. About half (49%) agree
that people should start planning even if they have a net worth
below $1 million.
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 (92%) and children (78%). Those surveyed
largely have important documents in place to facilitate their
wealth transfer, including wills (57%), powers of attorney (38%),
and trusts (34%). More than half have worked with a financial
advisor (56%) or an attorney (55%) to prepare their documents.
According to wealthy Americans, the top reasons someone should
create a plan are wealth and asset protection (56%), eliminating
conflicts between the recipients (44%), avoiding probate court
(43%), and minimizing taxes (39%).
“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 (34%), selecting recipients for specific items (29%), and
specifying how the money can be spent (27%).
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 (97%) and Gen X (94%) have stipulations included in
their wealth transfer plans, compared to only one in three Boomers
(34%). Millennials are most likely to stipulate how money can be
used (43%), while Gen X is most likely to set an age for when the
money can be used (46%).
All Wealthy Americans
Wealthy Millennials
Wealthy
Gen X
Wealthy Boomers
(NET) Have some kind of
stipulation
70%
97%
94%
34%
The age at which the money can be used
34%
39%
46%
17%
The recipients of specific items
29%
40%
41%
14%
How the money can be used
27%
43%
41%
7%
Tying distributions to life milestones
(e.g., graduation, purchasing first home, marriage, children)
19%
35%
26%
5%
Using funds for certain familial
responsibilities (e.g., family reunion)
15%
28%
22%
4%
Making a charitable gift as a prerequisite
to distribution
12%
19%
15%
7%
Maintaining certain career performance
(e.g., distribution based on earned income)
10%
19%
14%
2%
Maintaining certain academic performance
(e.g., minimum GPA)
5%
14%
6%
1%
“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 $1 million or more in investable assets,
including 105 UHNW investors with $10 million or more in investable
assets. All respondents were aged 18 or over.
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.
The Charles Schwab Corporation (NYSE: SCHW) is a leading
provider of financial services, with 36.1 million active brokerage
accounts, 5.4 million workplace plan participant accounts, 2.0
million banking accounts, and $9.85 trillion in client assets as of
October 31, 2024. Through its operating subsidiaries, the company
provides a full range of wealth management, securities brokerage,
banking, asset management, custody, and financial advisory services
to individual investors and independent investment advisors. Its
broker-dealer subsidiary, Charles Schwab & Co., Inc. (member
SIPC, https://www.sipc.org), and its affiliates offer a complete
range of investment services and products including an extensive
selection of mutual funds; financial planning and investment
advice; retirement plan and equity compensation plan services;
referrals to independent, fee-based investment advisors; and
custodial, operational and trading support for independent,
fee-based investment advisors through Schwab Advisor Services. Its
primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC
and an Equal Housing Lender), provides banking and lending services
and products.
More information is available at https://www.aboutschwab.com.
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1 High net worth is defined as having more than $1 million in
investable assets.
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Hibah Shariff Charles Schwab 415-667-0507
hibah.shariff@schwab.com
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