News that Sting won’t be leaving much of his fortune to his children prompted widespread agreement around the web.
Wealth is bad for kids, commentators and pundits said. Earned success is the American way. Today’s rich don’t believe in creating dynasties like in Europe or Asia—they prefer to give their money to charity.
But a study released on Wednesday shows that today’s wealthy are still leaving plenty of money to their kids—especially to millennials.
The U.S. Trust Insights on Wealth and Worth surveyed 680 people with investible assets of $3 million or more, two-thirds of whom have more than $5 million in investible assets.
The study found that 6 in 10 respondents think it’s important to leave a financial inheritance to the next generation, and that millennials may be the biggest beneficiaries.
Six in 10 millennials who responded to the survey grew up in households that were wealthy or upper middle class, and nearly half have received financial inheritances.
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Of course, given their age, the millennials haven’t had as much time as boomers and Gen-Xers to create their own wealth—and they may catch up. A study of young millionaires is naturally going to skew in favor of inherited wealth.
On the whole, the American wealthy aren’t trust fund kids. More than three quarters of all respondents (millennials, Gen-Xers, baby boomers and older generations combined) created the majority of their own wealth, according to the U.S. Trust study. Specifically, 84 percent of Gen-Xers and 78 percent of baby boomers earned the majority of their wealth.
Only 16 percent of the American wealthy are in their third or fourth generation of wealth.
Still, although America is not creating new multi-generational dynasties such as the Astors or the Rockefellers, they are leaving plenty of money to their kids.
—By CNBC’s Robert Frank