The Great Wealth Transfer Is Coming: Are You Ready?

In this episode:

00:00 – 02:36: Introduction to The Great Wealth Transfer
02:37 – 07:21: Women’s Role in the Great Wealth Transfer
07:22 – 09:15: Why You Should Start the Conversation Now
09:16 – 11:11: How to Create Legacy and Shared Family Values
11:12 – 20:22: Managing Different Generational Financial Values
20:23 – 23:33: The Importance of Preparing for Inheritance as a Family
23:34 – 29:27: Financial Trends + Final Thoughts

In this episode of the Your Money Your Mission podcast, host Kelly Mould, Anne Tidmore, SVP Wealth Advisor and Meg Marciniak, VP Private Banking, explore the significant wealth transfer expected over the next 5 to 10 years. “The Great Wealth Transfer”, estimated to be as high as $80 trillion, is set to have a profound impact on the younger generation and families, with a notable influence on women.

7 Key Takeaways

1. The scale of The Great Wealth Transfer 

The baby boomer generation, having experienced substantial changes over the years, is now the wealthiest in history. As they age, a large portion of their wealth is expected to be passed down to the next generation, primarily millennials. About 55% of millennials are expected to receive an inheritance over the next five years and a significant 70% of these wealth transfers are projected to go to women, given their longer life expectancy.

2. The importance of financial education

Financial education is essential for anyone who will be receiving an inheritance. Advisors and bankers are crucial in providing specialized financial education tailored to the unique needs and objectives of the next generation. Financial literacy can empower the younger generation to make informed decisions and effectively manage their newfound wealth, ensuring it aligns with their personal and family goals.

3. Early engagement with financial advisors 

The episode emphasizes the importance of working with financial advisors, regardless of one's current wealth. Whether it's starting a first job, buying a first house, getting married, having kids or retiring, building a relationship with a financial advisor can provide invaluable guidance and support.

4. The role of technology and human advisors

While technology and online tools are becoming more popular, especially among younger generations, they cannot replace the value of a human advisor. Technology can provide access and control but it lacks the ability to offer personalized advice, emotional support and fraud protection. Establishing a relationship with a human advisor who understands your financial patterns and values can provide a sense of security and confidence, especially during times of transition.

5. Passing values and creating legacy 

The concept of passing values down to your family and creating a legacy is a central theme in the discussion. Baby boomers, who were once primarily focused on investment performance, are now more interested in achieving specific goals and embracing certain values. These values can range from charitable giving and education to maintaining family properties. The only way to ensure these values are passed down is through open and honest communication with the next generation.

6. The shift to giving while living

Another significant trend is the shift towards “giving while living.” Many baby boomers are realizing that they can help their families achieve certain goals and objectives without compromising their own financial security. This approach allows them to see the impact of their gifts and be more involved in the establishment of their legacy. It also provides a more meaningful and fulfilling experience for the givers.

7. The role of open communication and comprehensive planning

Open communication and comprehensive planning are vital in navigating The Great Wealth Transfer. Having conversations about money and values with family members ensures that the next generation understands the significance of the wealth and the legacy.

Comprehensive planning helps in understanding the financial realities and preparing for the logistical and emotional aspects of receiving an inheritance. It also aids in aligning investment strategies with estate planning and long-term financial goals, which can help in preserving family unity and ensuring that the wealth is used in a way that reflects the family's values.

The Great Wealth Transfer is a critical period that requires preparation, education and communication. Engaging with financial advisors early and often and fostering a relationship that aligns with personal values and goals, can help ensure a smooth and secure transition of wealth. Connect with an advisor today.