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Financial Planning > Trusts and Estates > Estate Planning

Only a Quarter of Americans Expect to Leave an Inheritance

By Michael S. Fischer

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What You Need to Know

  • Gen Zers have the biggest expectations for the effect of an inheritance on their retirement strategy.
  • Almost two-thirds of Gen Xers and 40% of boomers and older people do not have a will.
  • Three-quarters of parents said they would be comfortable including their teenage and adult children in meetings with their financial advisor.

The much-ballyhooed great wealth transfer may neither be that great nor transfer that much money to many Americans expecting an inheritance, according to the latest findings from Northwestern Mutual’s 2024 Planning & Progress Study.

Only 26% of study participants said they expect to leave behind an inheritance. This will disappoint many millennials and members of Generation Z.

Thirty-two percent of millennials said they expect to receive an inheritance (not including 3% who reported that they had already received one), but only 22% of baby boomers and Gen Xers said they would leave a financial gift behind.

The gap is wider for Gen Zers, 38% of whom expect an inheritance (not counting 6% who said they had already received one). Just 22% of Gen Xers and 28% of millennials plan to leave a financial gift.

Northwestern Mutual said that based on plans alone, Generation Alpha, those born since 2010, can expect the biggest inheritance, as 36% of Gen Zers said they plan to leave a financial gift. 

Among study participants who said they expect to receive an inheritance, 50% consider it highly critical or critical to their long-term financial security, rising to 59% of millennials who said this.

Gen Zers have the biggest expectations for the effect of an inheritance on their retirement strategy, looking for the gift to cover 10% of their retirement funds.

“In the coming years, we will see a staggering $90 trillion generational transfer of wealth, but who will see it depends a great deal on people’s financial planning,” Kamilah Williams-Kemp, chief product officer at Northwestern Mutual, said in a statement. 

“Long-term financial planning includes many goals and milestones, but the one that could have the most meaningful and lasting impact on families over generations is leaving a legacy through estate planning.” 

The Northwestern Mutual study is based on an online survey conducted by The Harris Poll in January among 4,588 U.S. adults.

A Meaningful Financial Planning Move

Two-thirds of survey participants who expect to leave an inheritance said this was either their most important financial goal or a very important one. Eighty-one percent of millennials and 75% of Gen Zers said doing so was a priority, compared with 65% of Gen Xers and only 46% of boomers and older people.

Most respondents who expect to leave an inheritance said they would give a financial gift to their children and grandchildren.

Williams-Kemp said leaving an inheritance extends beyond dollars to providing stability, opportunities and a foundation for future generations to build on. 

“That’s why it’s essential to plan and communicate with family and loved ones to ensure your legacy is protected,” she said.

Northwestern Mutual noted, however, that 47% of boomers and older people in the survey who expect to leave an inheritance or gift have not talked to family about their financial plans. Thirty-eight percent of Gen Xers also said they have not done so.

Wealth Transfer Hiccups

Six in 10 American parents in the study said their children did not value financial responsibility at the same levels they did. Fifty-two percent of these worried that their offspring’s variance in values could negatively affect family assets from one generation to the next.

The research also found that 65% of Gen Xers and 40% of boomers and older people do not have a will. Some did not think they had enough assets or were too young to warrant one. Others found the matter too complicated and awkward to think about, and still others were uncertain about where to leave their assets.

At the same time, respondents felt positive about passing along their financial insights. Three-quarters of parents said they would be comfortable formally including their teenage or young adult children in annual meetings with their financial advisor. 

Why? Seventy-one percent saw the value in teaching and instilling good financial habits in their children, and 58% thought it was a good idea to introduce them to financial planning concepts.

“The primary way wealth is passed from one generation to the next is through a will, life insurance and an estate plan,” Williams-Kemp said. “However, it’s clear that inherited wealth is not indefinite wealth. Financial knowledge can be even more important to pass along to the next generation.” 

Michael S. Fischer

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