Over the next few decades, wealth is expected to change hands in an event that is often referred to as the Great Wealth Transfer. Trillions of dollars are projected to move from older generations to their heirs, charities, and institutions. While this transition offers meaningful opportunities for families, it also introduces complex financial, legal, and tax considerations that require careful preparation.
Regardless of whether your family’s wealth is modest or substantial, proactive planning can help reduce uncertainty, preserve flexibility, and support your long-term goals. Below is a practical guide to key considerations families across the country should keep in mind as they prepare for this significant asset transfer.
What Is the Great Wealth Transfer?
The Great Wealth Transfer refers to the large-scale shift of assets from Baby Boomers and older generations to Gen X, Millennials, and Gen Z. It’s a natural result of decades of demographic changes, economic growth, and accumulated wealth combined with the circle of life and all that it implies.
Without proper planning, families may face unintended consequences such as:
- Delays in asset access
- Higher tax exposure
- Family disputes
- Assets being distributed in ways that don’t align with the deceased’s personal values
Preparation is a must if you want to help mitigate these and other obstacles and increase the likelihood of experiencing clarity, communication, and control.
Core Estate Planning Documents Every Family Should Consider
One of the most important steps in preparing for wealth transfer is ensuring that essential legal documents are in place and kept up to date.
Healthcare Directives and Healthcare Power of Attorney (POA)
Healthcare directives are documents that address medical decisions, including treatment preferences. Your healthcare POA designates the person who can make healthcare choices on your behalf if you’re unable to do so yourself.
Financial Power of Attorney (POA)
A financial power of attorney authorizes someone to act on your behalf if you become unable to manage your finances. Establishing a POA can help ensure your bills are paid, investments are managed, and financial decisions continue without interruption.
Will
Your will outlines how your assets should be distributed after death, names guardians for minor children, and even designates an executor to manage your estate once you are gone. Without a will, state laws will intercede to determine how your assets will be divided, which may not reflect your personal wishes.
Trusts
Trusts provide additional control over how and when your assets should be distributed. In many cases, they are used to manage assets for minors. However, they are also beneficial for supporting beneficiaries with special needs or for improving privacy and estate settlement efficiency.
These estate planning documents should be established early and reviewed periodically, especially after major life events such as marriage, divorce, the birth of a child, or changes in financial circumstances.
The Importance of Asset Titling and Beneficiary Designations
There are many cases where assets have been transferred out of an estate in opposition of a will. To prevent that from happening to you, it’s critical to ensure you have set up proper asset titling and beneficiary designations.
Under normal circumstances, accounts like retirement plans, life insurance policies, and certain bank and investment accounts will pass directly to named beneficiaries. However, outdated or missing designations on these accounts or policies can override other estate planning documents, leading to unintended or undesired outcomes.
That’s why it’s imperative to regularly review things like:
- Retirement account beneficiaries
- Transfer-on-death (TOD) and payable-on-death (POD) designations
- Joint ownership structures
Consistency across all documents and accounts can help reduce confusion and administrative challenges.
Planning for the Movement of Assets
Transferring wealth is not always as easy as simply passing ownership from one to another. The timing, method, and structure of moving assets can influence taxes and asset liquidity, along with other long-term financial outcomes.
Common planning considerations include:
- Gifting assets during one’s lifetime versus transferring at death
- Liquidating assets for heirs
- Maintaining sufficient resources for retirement and healthcare
- Managing concentrated positions or illiquid assets, such as real estate or business interests
No matter your approach, you’ll likely have to navigate tradeoffs, pivots, and other planning obstacles that demand thought and negotiation. Regardless, your strategies should ultimately align with both your financial goals and personal priorities.
Tax Considerations to Keep in Mind
Taxes are a key component of wealth transfer planning, and they can be tricky because tax laws and thresholds are known to change over time.
Families should remain aware of:
- Estate and gift taxes, including current exemption limits
- Capital gains taxes, particularly related to appreciated assets
- Income tax implications for beneficiaries receiving inherited assets
- Required minimum distributions (RMDs) for inherited retirement accounts
Because tax rules are complex and ever-evolving, strategies should be reviewed regularly and coordinated with qualified tax professionals.
Communication Is Vital When It Comes to Wealth Transfer
Financial planning isn’t only about documents and numbers. Clear communication is a significant factor that enhances the process of transferring wealth from one person to another.
Discussing intentions, values, and expectations with your family ahead of time tends to help:
- Reduce misunderstandings among heirs
- Prepare beneficiaries for future responsibilities
- Align wealth decisions with family goals and charitable interests
It’s not uncommon for these conversations to feel uncomfortable. However, they do a lot more good than harm during a thoughtful planning process.
Working With a Financial Professional
Regardless of the size of your estate, preparing for your personal wealth transfer will naturally involve multiple moving parts, from managing investments to navigating taxes, assets, and family dynamics. Partnering with a financial professional, like those at Griggers Wealth Management, helps families like yours organize these and other planning elements, evaluate your options, and adapt strategies as circumstances change.
It’s important to understand that planning is not a one-time event. Ongoing reviews with your financial advisor are vital to ensure your strategies remain aligned with your goals, current regulations, and expected (or unexpected) life changes.
Schedule an Estate Planning Consultation With Griggers Wealth Management Today: 866-653-8126
Griggers Wealth Management works with you to create effective strategies that align with personal goals when it comes to transferring your wealth to other family members, loved ones, organizations, or institutions. It’s never too soon to think about the future of your family and the path for your assets. Let our advisors guide you through the process and help you establish a strategy that works for you and your family.
Schedule your consultation with our team today! 866-653-8126
Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.
The opinions voiced in this material are for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
