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STUDY: Do not expect a big inheritance from a baby boomer

When a parent passes away, an inheritance is common in an estate plan. However, for individuals in Florida and across the country with baby boomer parents, a new study shows that they are placing less of a priority on setting money aside to be passed along to their kids. This is even true for baby boomer parents that are millionaires.

A 2011 study by the U.S. Trust paints baby boomers to be somewhat selfish with their money, opting to sink money during their golden years into traveling rather than setting it aside to be passed down to their children when they die. The study revealed that 64 percent of baby boomer parents said they wanted to spend their extra money to travel more while 33 percent said they want to use it simply to have fun.

This is a new era of thinking, as the study shows that retirees older than the baby boomer generation were seven times more likely to believe they owe their children an inheritance. With baby boomers, they are placing more of an emphasis on leaving behind keepsakes and things with sentimental value.

Even the baby boomers that are leaving behind inheritances for their children are more likely to do it in the form of a trust. This does not give the children straight access to a lump sum, rather, a third party is put in charge of dispersing it in intervals.

This same study shows that many baby boomers are inadequate when it comes to estate planning, stating that about half of the early baby boomers and 44 percent of the late baby boomers will not have saved enough for retirement and may require the support of their children late in their lives. Many of them blame the fact that they had kids for not being able to save up enough money for retirement.

With the divorce rate for people over the age of 50 doubling, those divorce costs also take a large chunk out of a baby boomer's retirement fund.

Source: SmartMoney, "Things baby boomers won't say," Catey Hill, Nov. 10, 2011

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