The Orange County Register

August 11, 2005

Passing on more than just money

Poll finds keepsakes and parents' final wishes are more important than financial assets on list of what baby boomers hope to inherit.

By Andrea Coombes

When it comes to thinking about inheritances, both boomers and older Americans say money's not everything.

Instead, baby boomers say their parents' personal keepsakes, family stories and final instructions are more important than the oft-publicized trillions of dollars they're expected to inherit.

But conversations about how personal keepsakes will be passed down and how parents' last wishes will be carried out are among the least likely of inheritance topics.

Seventy-seven percent of boomers said understanding their parents' values is very important, 65 percent said enacting their parents' last wishes is key and 34 percent felt receiving their parents' sentimental treasures is very important, according to a telephone and online survey of about 1,200 boomers, conducted for Allianz, the insurance company, by Harris Interactive. For this study, boomers are those 40 to 59 years old.

But just 10 percent of boomers said it was very important their parents bequeath financial assets or real estate.

And 96 percent of boomers said their parents don't owe them an inheritance; 95 percent said they're not counting on an inheritance for their financial well-being. However, 73 percent said their parents' personal possessions are very important, and 91 percent said so are family stories.

"People want to deal with the emotional values of what a legacy is, not just the financial values," said Mark Zesbaugh, chief executive of Allianz Life Insurance Company of North America.

Older Americans had similar things to say: Seventy-seven percent felt it's very important to pass along their values, 53 percent said clarifying their last wishes is key and 30 percent pointed to treasured personal possessions as important. The study surveyed 1,345 people 65 and older.

The only difference between boomers and their parents is that parents are more likely to think financial assets are a very important bequest: 39 percent of elders said so vs. just 10 percent of boomers.

But when discussing inheritance, more boomers and older Americans focus on finances rather than the issues they say are more important.

Just 37 percent of boomers said they've talked with their parents about their parents' last wishes and 46 percent said they've talked about divvying up the parents' personal possessions. But 60 percent said they've talked with parents about distributing financial assets.

When forced to choose just one bequest, no one opted for money, said Ken Dychtwald, a consultant on the study, and chief executive of Age Wave, a consulting firm focused on boomers and older adults.

"We forced the issue," Dychtwald said. "We said if you could only focus on one, what would it be? Not one person said money.

"We're not saying money isn't important and people don't enjoy receiving some financial windfall, but ... the focus on inheritance is the wrong paradigm. What people have an appetite for is to pass a large part of themselves along to the next generation, and that dialogue is not happening."

The issues that aren't getting discussed can prove to be among the most intractable when heirs are left without instructions.

When asking questions of boomers who had already lost both parents, the study found there are "five times as many issues and discussions that arise in the transference of the personal possessions of emotional value," Zesbaugh said.

"It's grandma's china that causes more of an issue than does the transference of the financial assets," he said.

Financial planners see that problem often.

"We've seen situations where those mementos ended up causing more conflict than money," said John Williams, a certified financial planner and founder of Williams Financial Group, in Charleston, W.Va.

Older adults should consider casually chatting with their beneficiaries to assess whether any items hold particular interest, Williams said.

"Approach your family members one- on-one and say ... 'I was just wondering, if something were to happen to me, are there some things that you hold near and dear to your heart?' " he suggested.

"You have to be very careful and not make any promises. ... You may find each of them does desire to have the same object."

If aging parents have made no mention of estate plans, adult children can broach the topic, but success may depend on the relationship they have with their parents, and how they present the topic.

When it comes to personal mementos, if you do decide to raise the issue, be polite. "It all depends on the way you raise it," said Kelly Young, an estate-planning attorney with Lane & Young, in Charleston, W.Va.

She suggested saying, "I want to make sure this stays in the family, and it would really mean a lot to me to have it someday."

Given that many in the survey are interested in passing along more than just money, they might consider an ethical will, said Malcolm Greenhill, a certified financial planner and principal of Sterling Futures, a wealth-management firm in San Francisco.

"Ethical wills are statements about values and stories that they want to communicate to their heirs. What's their personal philosophy on life. What worked for them, what didn't," he said.

While hashing out who gets which memento might be a good idea, it's not always necessary for parents to divulge specific details regarding financial bequests.

"It's a personal choice," Williams said. "We do have some clients who are very, very open about this. They involve their children because it's a personal choice, (but) a lot of parents are very, very private."