"Life affords no greater responsibility, no greater privilege, than the raising of the next generation." This quote from former U.S. Surgeon General C. Everett Koop highlights what many people want most: leaving something meaningful behind for their families.

Over the next 20 years, about $84 trillion will move from older Americans to younger generations. Experts call this the Great Wealth Transfer.¹ This isn't just about money changing hands - it's changing how families plan their finances and think about leaving a legacy.

This wealth transfer brings both chances and duties. Whether you're planning to leave money to your family or expecting to receive it, smart planning can help protect that wealth for the future.

Why this wealth transfer is important

Today's wealth transfers are bigger than in the past. Unlike earlier generations who relied mainly on pensions and Social Security, today's retirees have saved money in retirement accounts and investment portfolios. Baby Boomers (people aged 61-79 in 2025) now hold over $82 trillion in wealth.

This happened because people live longer, markets performed well for many years, and companies switched from pensions to 401(k)s and IRAs. While this put more pressure on people to save for retirement, it also created larger amounts of money that will pass to their children and grandchildren.

Planning helps create a lasting legacy

These assets often represent decades of careful saving and investing. Today's wealth transfers include diverse investment portfolios, multiple retirement accounts, and tax-advantaged savings accounts. Add in inherited real estate or family businesses, and each piece needs careful planning for smooth transfers and smart tax planning.

Estate planning is more important than ever. Many people think estate planning just means writing a will and related documents. But thoughtful wealth transfer planning goes beyond just deciding who gets what. It considers how your wealth can make a meaningful impact while minimizing taxes.

Many wealth transfer problems come from unclear plans or unprepared heirs, not from lack of money. A complete wealth transfer plan should include your values and expectations to ensure smoother transitions.

Strategies to improve wealth transfers

Here are some key strategies to consider:

1. Giving Money During Your Lifetime. You can give up to $19,000 per person in 2025 without paying gift taxes. Lifetime giving lets you see how people handle the money and provide guidance. For charitable giving, donor-advised funds offer tax benefits and let you involve family in giving decisions.

2. Education Funding. Investing in education gives young family members tools for success. Payments made directly to schools for tuition don't count against gift tax limits. 529 education savings plans let you contribute large amounts while keeping control of the account. These can pay for K-12 tuition, college, and student loans.

3. Smart Asset Placement. This means putting investments in the right types of accounts - taxable, tax-deferred, and tax-free - to get the best results. You can also use strategies like tax-loss harvesting to reduce taxes. For example, if you have investments with large gains, you might wait until after death for a "step up" in cost basis or gift the asset to charity for tax benefits.

4. Advanced Planning. As wealth amounts grow, more complex strategies become helpful. This might include trusts that distribute money over time or charitable components involving the next generation. These strategies need expert help to ensure good outcomes.

The bottom line? The Great Wealth Transfer is a historic chance to create lasting impact across generations. Whether you're preparing to transfer wealth or expecting to receive it, thoughtful planning can help ensure your family's money serves its intended purposes.

1. https://www.cerulli.com/press-releases/cerulli-anticipates-84-trillion-in-wealth-transfers-through-2045