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Generational wealth transfer slowly getting underway

by | Jan 15, 2014 | Estate Planning |

People in California may have seen a recent financial news article about the tremendous multi-trillion-dollar inheritance boom that is just getting underway here in the United States. According to a recently published paper, the Baby Boomer generation is set up to receive a whopping $8.4 trillion in collective inheritance over the next several decades. This isn’t an isolated phenomenon; it could impact about 2/3 of all baby boomer households, with the average inheritance amounting to a sizeable $300,000 per household.

That is certainly good news for a generation of Americans who are reaching the age where retirement is nearing and the effects of the financial destruction of the late 2000s appear to be dissipating. But getting a large infusion of wealth via inheritance can be a difficult thing to manage, especially for an heir who doesn’t have a viable investment and estate plan of their own already in place.

Everyone should have an estate plan, regardless of their current income level or assets. By having an idea of what a person wants to leave to their heirs, the estate plan provides perspective and guidance for how to meet those goals. It may seem daunting, but even the most complex estate planning challenges can be conquered.

Baby boomers should be aware that receiving an inheritance also creates a tremendous opportunity to create a wealth transfer plan of their own. But, in order to maximize assets and protect against unnecessary taxation, people need to be aware of the tax implications of their financial moves, especially since inheritance tax is still a hot topic for state and federal lawmakers.

Source: iBerkshires, “What to Do If You Inherit,” Jan. 7, 2014

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