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A multi-generational family

Financial Planning > Trusts and Estates

How Millennials and Gen Z Plan to Use Inheritances

By Michael S. Fischer

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Sixty-eight percent of millennials and Generation Z expect to receive an inheritance or have already done so, according to a recent survey by USA Today Blueprint. The average windfall amounts to about $320,000 on average.

The survey found that while 82% of respondents expect to inherit cash, 62% look forward to receiving real estate. Other transfers of wealth include vehicles, investments and ownership stakes, and other property.

A majority of survey respondents saw a downside to the ongoing generational wealth transfer. Fifty-seven percent, including 54% who are in the inheritance pipeline, believe it will perpetuate wealth inequality in the United States.

Blueprint used the Prolific online research platform on Nov. 13 to survey 1,255 Americans ages 18 to 42, asking about family inheritances, debt and financial support of aging parents, and how the inheritance will affect their futures.

Inherited Wealth Priorities

The survey results showed that millennials and Gen Zers have a variety of plans for how they will use their inheritances, including: 

  • Savings and/or investments: 76%
  • Paying off debt (excluding mortgages): 40%
  • Travel: 22%
  • Pass on to children: 21%
  • Paying off mortgage: 20%
  • Home improvement: 17%
  • New property purchase: 16%

Charitable giving appears to be in the plans of only 8% of millennial and Gen Z inheritors, according to the survey.

Among millennials and Gen Zers who expect to pay off money they owe, student loan debt is an especially heavy burden, comprising about 36% of the outstanding U.S. total (although Gen Xers are the most heavily burdened, owing 57% of the total). 

Credit card debt also weighs on the lifestyles of younger generations, with millennials owing on average $5,649 and Gen Zers $2,854.

Even though a windfall has the potential to relieve a lot of financial stress, a majority of respondents insisted that it will not change their lifestyle much at all, according to the survey. Among those who do expect their lifestyle to be affected by inheritance, 48% said they would be more relaxed about saving and earning money. 

Thirty-three percent said they would feel less stressed — perhaps they would use the money to reduce debt, Blueprint said. 

Financially Supporting Aging Parents

Beyond inheritance questions, the Blueprint survey asked millennials and Gen Zers about their parents’ financial situations. 

Thirty-three percent of respondents said they expect to or already have assumed a financial burden to support aging parents. At the same time, only a third of that group said their financial planning and spending behavior includes saving to prepare for this eventuality.

Fifteen percent of survey participants reported that they have or expect to take on debt in order to support aging parents. Of these, about a third said they sometimes feel resentment that their parents are not in a better financial situation.

Michael S. Fischer

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