The Great Wealth Transfer is a financial process that has already begun and will continue over the next two decades. During this time, it is estimated that approximately $84 trillion in assets will be passed down to younger generations. Much of this wealth will come from the Baby Boomer generation and be transferred to Generation X or Millennials.
This has been called the Great Wealth Transfer because never before in history has such a large sum of money changed hands. This process is expected to be complex, making advance planning essential to make sure everything proceeds as smoothly as possible.
Key areas to consider
One crucial area to think about is how assets should be transferred. If you are creating an estate plan, do you want to leave assets directly to beneficiaries in your will? Or would it be better to place the money in a trust that can govern how and when the assets are used?
It’s also important to consider potential tax implications. For instance, can reducing the value of an estate lower the taxes that must be paid? How should outstanding debts be addressed before someone passes away?
Finally, remember that much of this wealth will be in the form of tangible assets. Do you need to transfer homes, vacation properties or other real estate to the next generation? Should you create a business succession plan to pass ownership of a small business to your children?
Making a comprehensive plan
These are just a few key areas to consider, but they highlight how complex this process can be. Be sure you know the right legal steps to take to create a comprehensive estate plan for your family.