"The asset can then go to the grandchildren and not be lost in some intervening event where the creditor takes it," Brogan says.
Some parents feel they have already given enough of their money over to their children. They now want to have some fun with it themselves. They're concerned that if they give too much to the children, they won't have enough for themselves.

Colleen Schon, senior vice president of investments at The Barrett Group, a wealth management group of Raymond James in Auburn Hills, Mich., says her clients who have less than, say, $10 million in investable assets, are concerned about how much they will have when they retire, given the economic downturn, and they want to make sure they have enough to not only live but to live it up before they die. In fact about 60% of her clients fall into that category.

One couple came into her office recently and had done the math, she says. They were going to live to be 80. They then added five years on to that figure for good measure. They knew they wanted to take two trips a year until they die, so they knew about how much money they would need. Given all that, they decided to simply gift $13,000 a year to their two grandchildren. If anything is left after they die, their children can have it, but if everything goes as they plan, that will not happen.

"They said, 'I don't want to have anything left. Zero.' If they could take it down to the penny, they would," Schon says. "They feel they've done enough for their children. Now it's their turn."

Schon says that's a change from, say, 20 years ago, when clients lived their lives a bit more parsimoniously because they believed it was their obligation to leave something to their children.

Bradford Winton, a financial planner and portfolio manager with Legacy Solutions Inc. in Kennett Square, Pa., says as many as a third of his clients, when asked whether they wanted to leave money to their children, said, "Sure-if there's anything left over after they've finished with it." He says one client said, "They make more money than I do right now! Why should I short change my retirement?" Another said, "I paid for all their schooling. As far as I am concerned, they owe me." Though he says the more money the client has, the less this line of thinking applies.

"They're more worried about maintaining a certain lifestyle, and they wouldn't want to eat into it just to leave money to their children," he says.

Even his own grandmother has told him that while she's willing to leave money to her children, she doesn't want to jeopardize her current lifestyle to do it.

Susan Colpitts, co-founder of Signature, a multifamily office in Norfolk, Va., with $2 billion in managed assets, says the decline of the family business has also made parents less inclined to leave the family fortune to their kids. With the maturation of the stock and private equity markets-and the fact that many children no longer want to go into the family business-parents can sell the business and take out their cash. In the past, a business was more illiquid, so when a father passed on the business to his son or daughter, he passed on all the equity that was tied up in it.

"Most of our clients are entrepreneurs, people who have built a business, and then either did an IPO or just got very successful. They have very different ideas about what they want to leave to their children in comparison to the prior generations," she says, adding, "When the business is sold, there's a huge liberation that comes with liquid wealth, and they have a choice: Do I want to pass along all this money to my children?"