Baby Boomers Predicted to Transfer a Staggering $84 Trillion in Wealth, One Family at a Time

By Mary Alice Miller
During the next two decades, 78 million baby boomers will transfer $84 trillion in wealth. Of that amount, 85% of this wealth transfer, or $72 trillion, will go directly to their children and grandchildren, not taking into account end-of-life care.

Baby boomers, born between 1946 and 1964, hold half the nation’s $140 trillion in wealth. The Silent Generation, born before 1946, holds $18.1 trillion. The Silent Generation is now in its 80s. Their wealth transfer will accelerate as they pass away.

Inheritance doesn’t need to wait until someone passes. Heirs are increasingly benefiting for family wealth from elders due to the popularity of ‘giving while living’, including property purchases and repeated tax-free cash transfers of estate money.

The top 10% of wealthy households will give and receive the majority of collective wealth transfers. However, for those in the working class, the bottom 50% of households will account for only 8% of wealth transfers. The transfer of a paid-off home or a small amount of money can boost lower-income workers.

Due to government policies like redlining and house covenants, the vast majority of those who hold and transfer wealth are white. Black people and other people of color have managed to acquire comparatively smaller amounts of wealth through home ownership and retirement pensions due to collective bargaining.

It is important to educate your heirs to nurture and preserve their assets for important causes and their heirs.
Recently, Assemblywoman Latrice Walker hosted an event on estate planning conducted by Mitch Mitchell, Associate Counsel for Trust&Will.

Mitch Mitchell emphasized the importance of setting up how you want your assets distributed so that your family members don’t have to deal with the logistics while they are grieving. The plan should also include naming caregivers for minor children, people with disabilities, and pets. Most important, said Mitchell, is setting up an advance directive and appointing someone to carry out your wishes in the event you become sick or incapacitated.

Mitchell explained the difference between a will and a trust. “A will is a legal document that determines what happens to our property when we die. A named executor takes the will to probate or surrogate’s court. The court validates the will, and the court appoints the named executor. The executor can gather assets like bank accounts, and once they receive the funds they pay expenses and creditors, then distribute assets,” said Mitchell.

“But,” he added, “Probate can be slow. Often, it takes 9-10 months before you get a hearing to see a judge. Often, people hire an attorney to help them through the process.”
A trust, on the other hand, “doesn’t have to go to court,” said Mitchell. “A trust is created then assets are funded into the trust. The trustee has the authority to manage the trust. The trust can be active while you are alive. It is a tax benefit and an incapacity tool. Trust beneficiaries get any assets in the trust, and the trust can set conditions such as if you have younger children and you don’t want them to get access all at once.”

Will are public documents while trusts are non-public, said Mitchell.
“Everyone over the age of 18 needs an estate plan, especially for health issues,” said Mitchell. “Make an estate plan when big life events happen, such as getting married, having children, accumulating business assets, purchasing real estate, and medical concerns.

Mitchell cautioned that people need to make sure their plans are current and updated. Without a big life event, the estate plan should be revisited every three years.
“I think it is important for people to do succession planning. A lot of times many in our families, particularly our seniors, die without a will and their property has to now go through the City (Surrogate’s court). If they don’t have any children, many times the property will go to the public administrator and then it gets owned by the City and the City does whatever they want to do with the property,” said Assemblywoman Latrice Walker.

“We believe we can do more successive planning related to setting up a trust, putting things in your trust for your family, extended family members, or leaving it to your church. In a lot of other communities, their institutions are able to acquire property because people leave endowments to the institution. I think it is time that we learn and we build our own institutions so that our property doesn’t just get bought,” she added.

The state legislature is “trying to make estate planning affordable and easier. You have to make sure you do it right; otherwise, people will contest your will,” said Walker. “We have a bill that would allow people to do electronic wills. We are working on the signing and notarization portion. We have electronic notaries, but not for wills.”