Over the next twenty years, a wealth transfer will occur that exceeds $30 trillion as the Baby Boomer generation passes the remainder of their wealth to the Millennials and subsequent generations. The Baby Boomers (born 1946-1964) are considered the wealthiest generation, currently controlling 70% of the disposable income in the United States.

It is imperative families develop a plan to transfer assets since the transfer of wealth is inevitable. For most families, their wealth was acquired during this lifetime and not inherited from the previous generation. 

When starting to plan for transferring their wealth, pre-retirees should prepare for their retirement first, healthcare costs second, and their remaining transferring assets last. Although some individuals choose not to involve their family members that will become the beneficiaries of their assets, including qualified tax and legal professionals is essential. But don’t write off including your heirs in all aspects of wealth transfer planning if you’d like more than just one generation to benefit.

Preparing your heirs to take over your estate and eventually passing their remaining assets on to their beneficiaries is equally important. Heirs unprepared to manage money, investments, or seeking financial guidance from qualified financial professionals seldom have enough inheritance left over for their heirs. Some families choose to 'train' heirs by teaching them how to invest in giving assets away through philanthropy wisely. 

Without financial education, frequent investment decision-making, and a purpose to preserve the inherited wealth, many estate transfers rarely survive.  The complexities of wealth preservation are not taught in school or other institutions and can only demonstrate through modeling, professional guidance, and the generation's intention to pass their wealth forward.

Suppose the generation set to inherit from the Baby Boomers does a good job preserving what they inherit. In that case, it could provide financial benefits to others for the next thirty to forty years. And that’s worth planning.

We spend a lot of time preparing for building wealth but not passing it on to subsequent generations. If you would like guidance on The Great Wealth Transfer and plan with your beneficiaries, meet with your financial professional for guidance.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

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