A new study  has found that many baby boomers plan to spend their money on themselves and forego giving their offspring any inheritance.  “My goal is when they carry me away in that box that my bank account is going to say zero,” said Carol Willison, a 60-year-old Seattle woman.  “I’m going to spoil myself now.”  Upsetting the conventional idea of parents carefully tending their financial estates to be passed down once their wills are read, many baby boomers plan to spend the money on themselves while they still can.

In a survey of millionaire boomers by investment firm U.S. Trust, only 49 percent said it was important to leave money to their children.  The low rate surprised a company that for decades has advised well-heeled people about how to leave money to their heirs.  “We were like ‘wow,’” said Keith Banks, U.S. Trust president.

The decision to leave an inheritance is increasingly faced by many of the nation’s 77 million baby boomers, and it’s becoming all the more complicated because of the difficult economy.  Boomers face the decision of wanting to enjoy their long-awaited golden years and the pressure of various financial concerns, such as fear of outliving their savings and the need to help parents, children or siblings who have money struggles of their own.

“I do not see my baby boomer clients giving up a vacation or wine or dinners out so that they can leave more money to their children, because they feel like they’ve already done it for their kids,” said Susan Colpitts, Executive Vice President of a Norfolk, VA wealth management firm.  “They say, ‘If there’s something at the end I’d love (the kids) to have it, but what’s important for me now is to get what I’ve earned, which is to travel and have a nice bottle of wine,’” Colpitts said.

“How can you say no when a child asks ask for a down payment for a house or money to remodel their house to have a bedroom for a second child?” asks Ken Dychtwald, chief executive of the research firm Age Wave.  “A lot of boomers are finding that family members are taking cash advances on those inheritances right now.” 

Writing on the Encore blog about retirement planning,  Missy Sullivan says that “The survey found that three-quarters of respondents believe their wealth came from their own focus and hard work, while half said they paid a steep personal price — limiting time off, neglecting their families, mishandling relationships.  Maybe that’s why, as they approach retirement, they’re planning to spend more on themselves, traveling (64 percent) and having fun (36 percent).  Boomers surveyed also had doubts about their kids’ readiness to handle the family riches.  Only 31 percent of parents agree strongly that their children can handle an inheritance.  Only 36 percent believe the kids can work together to make decisions about the family wealth after they’re gone.  Fifteen percent have disclosed zilch to the kids, detail-wise, about their wealth.  When asked why, the reasons included fear the kids would become lazy (24 percent), would make poor decisions (20 percent) or would squander the money (20 percent).” 

The size of parental estates can be significant  — a median of $64,000, according to a report from the Center for Retirement Research at Boston College and MetLife insurance.  That’s a handsome amount, but hardly the life-changing Lotto win that will send boomers on a big shopping spree.  “We ran all the numbers, and it’s really unlikely that boomers will inherit an unimaginably large amount of money,” said Anthony Webb, a research economist with the retirement center.

The fact remains that many Boomers inherited less from their parents, thanks in part to the recent financial meltdown.  Boomers who have already inherited an estimated $2.4 trillion avoided much of the market declines.  If investors didn’t have to take their cash out of the market, the investment hit most estates took during the recession has nearly all been recovered.  Nevertheless, the Center for Retirement Research estimated that the $6 trillion originally coming due to boomers had been cut to $5.2 trillion, creating an $800 billion loss.  Additionally, that 13 percent estimated loss in investment wealth, the major factor dragging down boomer inheritances, is the drop in housing prices.  “Real estate took a huge cut, whereas investments have largely recovered for many people,” says Warren McIntyre, a certified financial planner with Troy’s VisionQuest Financial Planning.

According to Marilyn Capelli Dimitroff of Capelli Financial Services, “Once the parents are gone, the kids can’t sell the house.  I’ve had conversations with clients where they just don’t know what to do.  The houses are on the market and on the market, and sometimes the kids live out of state and the houses just deteriorate.  I actually had one family try to give away the home, and they couldn’t do it.”