A recent study shows American millionaires are giving their heirs a dose of tough love.
New data shows that 82 percent of American millionaires feel each generation should be responsible for creating its own wealth -- up significantly from the 65 percent who said that in 2007, according to studies commissioned by PNC Wealth Management.
And raising successful and hard-working children was priority No. 1 for 84 percent of respondents, up from 75 percent in 2007.
"It's human to want your children to have a better life than you have had, but too much financial support...might have negative longer term consequences," said Steve Pappaterri, senior PNC's managing director of wealth planning, in a statement.
"Ultimately, parents want their children to make their own way in life."
Some more interesting findings from the study:
- Post-recession sentiments: One-third of millionaires anticipate a decline in the wealth they expect to pass on to the next generation, according to PNC's Wealth and Values Survey. But nearly half of respondents said they expect to pass on at least $500,000 of wealth to their heirs.
- Financial legacies: Millionaires expect their finances will be a significant part of their personal legacies. And 86 percent intend to leave something for the next generation, be it passing on property, family heirlooms or ownership/participation in a business. Nearly 50 percent of millionaires expect to pass on assets via trust fund.
- Transfer of wealth: Most wealthy households have at least some plans in place for transfer of wealth: 82 percent have wills, 52 percent have trusts and 52 percent have estate managers. Among wealthy business owners, however, only 15 percent have a formal succession plan in place.
- Childhood financials: Seventy-five percent said their financial situation growing up was average, 12 percent said they grew up poor, and another 12 percent said they grew up wealthy.
- Generational assistance: Sixty-seven percent of millionaires said they got help from their parents, and 91 percent of them plan to do more for their children. With rising education costs, 84 percent said they have or expect to financially support their children's higher education. Many millionaire parents said they strongly support purchases such as a car (61 percent) and down payments on homes (45 percent).