A Mammoth Wealth Transfer Awaits the Area, Study Predicts

Its authors say there are no definitive studies with which to compare theirs, but they believe this is the largest transfer of wealth for the region because of rapid growth, soaring house prices, more two-income families and higher-paying jobs.

Experts in the regional economy say the study reflects the swelling size of the professional class of relatively young workers and the relative lack of inherited "old money" in the Washington area. But the concentration of potential future bequests among affluent households could exacerbate the widening gap between rich and poor.

"It does seem that wealth begets wealth," said Tim Priest, executive director of the Greater Washington Initiative, the Greater Washington Board of Trade's economic development arm.

The aging baby-boom generation and the wealth of the current generation of retirees -- generally considered the most affluent in U.S. history -- have focused attention in recent years on how their money will be distributed. The center's national study drew widespread attention several years ago when it predicted that $41 trillion would change hands through 2050.

Charities launched vigorous campaigns to persuade aging donors to remember them in their wills, investment advisers geared up marketing campaigns, and millions of baby boomers had visions of easier retirements.

But other researchers have questioned the center's research methods, saying that longer life spans, rising health care costs and other expenses will eat into nest eggs.

The AARP has branded the national dollar estimates "a pipe dream."

"What we've found is that many baby boomers kind of hope that they won't have to save because they'll get bailed out by their parents' [inheritances]," said John Rother, policy director for the AARP, the nation's largest organization for seniors. "And we're saying, 'Not likely.' "

As a further brake, some say, today's retirees are less willing than past generations to sacrifice to leave a financial legacy for their children.

"Bumper stickers proclaiming 'Retired -- Spending My Children's Inheritance' provide . . . evidence of a diminishing bequest ethic," warned a 2000 Federal Reserve Bank of Cleveland report that questioned the lavish wealth-transfer predictions.

Schervish, however, said the center took into account that retirees' spending would be higher and life spans longer.

The study covers what are known as final estates, meaning the death of a single person or the second spouse in a married couple. It uses government data to look at household incomes, age and household assets, including homes, stocks, retirement accounts and such significant personal possessions as cars and jewelry.