The baby boomer generation has accumulated the largest total amount of wealth in American history. They control roughly $84 trillion.
This is causing all sorts of problems for younger generations, but those issues won’t last forever. Naturally, as this generation passes away, Baby Boomers will transfer their wealth down to members of the millennial or Gen Z generations. This process has been referred to by many as the “Great Wealth Transfer”, referring to the fact that it is the largest single transfer of money between generations in American history.
What types of assets are included?
It’s not just financial assets that will be passed down, although those do make up a large portion. Baby Boomers are also going to transfer real estate, personal property, vehicles, jewelry, businesses and many other assets to the next generation.
How could this cause problems?
The downside of this transfer is that it is likely to cause estate disputes. With so much money changing hands, it is inevitable that some beneficiaries will not see eye-to-eye about how the money should be passed down or distributed. This is especially true in situations where someone passes away intestate, meaning they do not have an estate plan. But even with an estate plan in place, disputes are possible.
As such, if you’re making a plan this year, it’s very important to address these comprehensive assets and to consider what disputes they could cause among your family members. Often, having conversations and making plans in advance can help your adult children avoid these complications. Just make sure you know about all of your legal options.