Parents, worried about your adult kids' economic prospects? You have plenty of company.

An excellent article in the The New York Times Magazine (June 22, 2014) addresses the perplexing realities of today's "boomerang generation." Author Adam Davidson echoes the concerns I hear from many of my estate planning clients as they consider how they want their assets distributed and how to best protect their loved ones.

It's Official: The Boomerang Kids Won't Leave explains that today, one in five adult children in their 20s and 30s live at home with parents. Among all young adults, 60% receive some degree of financial support from parents. Add to this generation's employment challenges the fact that many are in debt. Nearly 45% of 25-year-old college graduates have outstanding debt, with an average balance of $20,000, says Davidson.

The article goes on to say that this could well be a permanent state of affairs, not just a temporary blip as a result of the great recession. The author points to the great systemic, structural changes in the American economy over the decades: the decrease in available jobs due to technology, and competition with foreign workers in a global economy. Those that make it to the top 10% will do just fine, he says, but the rest are likely to stay... well, stuck. Davidson writes:

"This uncomfortable fact, which many economists have recently accepted, suggests that we are living not simply in an unequal society but rather in two separate, side-by-side economies... For those at work in the much larger pool, there will be falling wages and far greater uncertainty... Today, about a third of young adults will earn a four-year-degree, and many of them - more than a third, by many estimates - are unlikely to find lifelong secure employment sufficient to pay down their debt and place them on track to earn more than their parents."

In other words, the old adage that America's next generation always does better than the prior one may no longer apply. And that is bound to influence how today's parents and grandparents go about planning their estates. Almost all my clients say they want to preserve assets and leave something for their kids. In a world where job prospects and financial security are in diminishing supply for so many,  that desire takes on increased urgency.

Read the original article here.  

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