The Leading Trust and Estate Litigation Firm in Michigan

Inheritance Expectations and Economic Downturns

Of the many generalizations attached to baby boomers, one piece of common wisdom has been that they stand to inherit a great deal of wealth from their Greatest Generation parents. The onslaught of bad news that accompanied the Great Recession and other factors has tempered that outlook, and the estate planning implications of this development are worth noting.

Recent Research On Inheritance

A recent report from Boston College’s Center for Retirement Research, “How Important Are Inheritances for Baby Boomers?”, examined the aggregate amount of this intergenerational transfer of wealth in light of the declining worth of real property and equities. The authors, research economists at the center, reviewed data specific to individuals born after 1945 and before 1965, and concluded that this demographic cohort will inherit over $8 trillion during their lifetimes.

The study found that two-thirds of the households with members in this age group will receive a median amount from wills, trusts and other sources of inheritance valued at $64,000. But that includes amounts already distributed, and the authors predict that undistributed wealth declined in value by as much as 13.1 percent during the latest economic recession, based on assessments of the S&P 500 Index, the Case-Shiller Index and other indicators.

What Does This Mean For You?

While the authors concede that inheritances will make a significant difference in the retirement preparedness of many boomers, they state that “even when inheritances do occur, recipients generally get the money when they are older and the amounts are typically not large enough to be life-changing.” Two important factors beyond the economic downturn that also bear consideration are longer retirements among the parent generation and the increased impact of late-life health care expenses.

Long-Term Planning Is Crucial

A final generalization about baby boomers: Many are notoriously unprepared for the financial realities of their own retirements as their generation reaches its late 60s. By taking an honest and comprehensive look at their own long term financial plans and legacy intentions with an estate planning attorney, clients can take charge of financial realities at any stage of life.

If you need advice about how to develop an estate plan that can whether economic downturns, Prince Law Firm is here to help. To schedule your initial consultation with one of our experienced lawyers, call us at 248-419-1968 or send us an email.

Estate Planning Law Blog


Can you challenge a trust in Michigan?

When planning an estate, choosing to create a trust can be a sure way of protecting assets. Planners may choose to draft revocable or irrevocable trusts. In Michigan, there are circumstances that dictate whether a person may challenge a trust. If you are wondering...

How an inventory of assets protects the executor of an estate

One of the earliest steps in the administration of an estate will involve creating an inventory of assets and financial liabilities. You will need this inventory to present to the probate court along with the last will and other important documentation.  The inventory...

Revisiting estate planning goals after the end of a marriage

There are a variety of scenarios in which a change in life circumstances could leave you facing a need to reassess your goals for the future. Should you and your spouse choose to part ways, the end of your marriage could leave you facing a variety of difficult...

Estate planning is a gift

Some of those who have not yet done their estate planning simply have not found a compelling reason to get started. They know that they need a plan someday, but it does not seem all that urgent or important. They resolve themselves to the idea of doing it later. This...

Should you leave your business to your heirs?

Estate planning is, in part, the process of passing assets to your heirs. You need to create a plan to do this effectively. Common assets include the family home, a life insurance policy, your investment portfolio, your bank accounts and the minor assets at your home,...