Great Wealth Transfer

The Great Wealth Transfer refers to the unprecedented intergenerational shift of wealth currently underway, primarily in the United States, but with global implications.

🔍 What Is It?

The Great Wealth Transfer is the largest transfer of wealth in history, as baby boomers and the Silent Generation (those born before 1946) pass down their accumulated assets to younger generations — primarily Gen X, millennials, and Gen Z.

Estimated total: Over $84 trillion is expected to change hands by 2045.
Heirs vs. Charity: About $72.6 trillion will go directly to heirs, while nearly $12 trillion is projected to be donated to charities

1 Money.com

2 Wikipedia

💰 What’s Being Transferred?

Assets that will be passed down:

Cashand other liquid assets
Real estate
Investment portfolios (stocks, bonds, retirement accounts)
Businesses and business interests,
Personal property and heirlooms

🌍 Why does It Matter?

This massive shift has broad economic and social implications – noteworthy are

Wealth concentration: The top 10% of households will receive the majority of the wealth, with the top 1% holding as much as the bottom 90% 2 Wikipedia
Changing values: Younger generations are more likely to prioritize social responsibility, sustainability, and impact investing, potentially reshaping financial markets 1 Money.com
Economic ripple effects: It could affect housing markets, education, healthcare, and even politics, as wealth influences access and opportunity 2 Wikipedia

🧭 How to get ready for it and Prepare better

Since this might affect your own financial planning or inheritance strategy, it is important to prepare better because it involves both financial and emotional planning to ensure a smooth and responsible transition of assets across generations. For both those giving and receiving wealth, preparation is key. Prepare Prepare Prepare

Estate planning: Wills, trusts, and beneficiary designations are essential.
Tax strategies: Tools like Roth conversions and step-up in basis rules can minimize tax burdens 3 Bankrate
Financial literacy: Education and planning crucial because many heirs may not be financially prepared for this transfer.

Some quick key steps to prepare beter include list below and ends with a well created and personalized family checklist or template for your family’s wealth transfer plan outlining a basic estate planning roadmap. Start with:

🧭 1. Open Family Conversations 1cnbc.com

Talk about money early and often: Many families avoid discussing finances, which can lead to confusion or conflict later
Set expectations: Clarify what heirs can expect to receive and when, and discuss the values you want to pass along with the wealth. Manage well

📜 2. Create or Update Your Estate Plan 1cnbc.com

Wills and trusts: Ensure you have a valid will and consider trusts to manage how and when assets are distributed. Well documented and in appropriate trusts to avoid probate isues later too.
Healthcare proxy and power of attorney: These documents are essential in case of incapacity.
Beneficiary designations: Regularly update update and update these on retirement accounts, insurance policies, and bank accounts

💼 3. Work with Professionals 1cnbc.com

Financial advisors: Help with investment strategy, tax planning, and wealth preservation.
Estate attorneys: Draft and review legal documents.
Accountants: Assist with tax-efficient strategies for gifting and inheritance

🧠 4. Educate the Next Generation

Financial literacy: Teach heirs about budgeting, investing, taxes, and estate planning. Start early.
Use a checklist: Evaluate their understanding of key financial concepts and identify areas for improvement 2 hancockwhitney.com
Family finance meetings: Regularly discuss the family’s financial goals and legacy plans 2 hancockwhitney.com

🧾 5. Plan for Taxes and Legal Changes

Estate tax exemption: Currently high (nearly $14 million per individual in 2025), but may drop after 2025 unless extended 1cnbc.com
Gifting strategies: Use annual gift exclusions and lifetime exemptions to reduce taxable estates.
Prenuptial agreements: Especially important if you want to protect family wealth from marital disputes 3 ubs.com

🧩 6. Customize Based on Heirs’ Readiness

Tailor strategies: Use trusts or conditional inheritances for heirs who may not be ready to manage large sums.
Align with values: Some families tie inheritance to education, employment, or charitable involvement 2 hancockwhitney.com

Consider ending the road map by consulting with a financial planner and an accountant to help determine the right approach for receiving the inheritance. For example, if you are to receive and accept certain assets, like money in an IRA or 401(k) it will leave the receiver with a big tax bill burden because the receiver will have to pay taxes on its distributions because these distributions from these type of accounts are considered income, not capital gains, and could push you into a higher tax bracket. This type of inheritance is not received as a step-up basis, i.e., it is the cost basis which would remain the same as the original owner. There are several other examples of assets that need the same level of scrutiny such as global inheritances, time share, etc. In fact, some assets and situations require a special trust to be drawn up. This is critical to understand, so consider reviewing all of this with your financial planning team specializing in estate planning. If you still want to know whether or not this is important to think about it, I leave you with this one thought:

According to USA Today, “Why should people think about inheritance now? The so-called great wealth transfer has begun. Nearly $124 trillion in assets will change hands through 2048, according to estimates by the consulting firm Cerulli Associates. Recipients are expected to inherit some $106 trillion of that amount, mainly from baby boomers, with the rest going to charity.” – https://www.usatoday.com/story/money/personalfinance/2025/06/27/how-disclaim-inheritance-why/84330310007/