Baby Boomers have about 70% of the disposable income in the United States. This generation has amassed trillions of dollars that must eventually move down to the next generation.
This process, often referred to as the biggest wealth transfer the world has ever seen, is going on now. It’s happening already. But it is far from over. Things like this take time. Many Baby Boomers are right around retirement age. That means that the next 15 years or so should see the majority of this wealth move to their children.
How will this wealth transfer happen?
Wealth can be transferred in many ways. Business owners may sell their businesses and leave the money to their kids, or an owner may leave the entire company and all of the assets it controls. Those with cash on hand may split it between their heirs, and those who have it tied up in investments may just turn their portfolios over to their children. Still others will put money in trusts and leave it to their heirs with some level of control, as the trust dictates exactly when and how it changes hands.
At the same time, many physical assets will be passed down. Baby Boomers with million-dollar homes have to decide who gets those homes. They have to leave art collections and car collections. Many of these items will in turn be sold and converted into cash, though some will doubtless be retained by their new owners.
Planning ahead is essential
All of this promises to be complicated, with more than $30 trillion on the line, so all involved absolutely must know what legal options they have. A well-planned estate can help ease the way for the next generation and protect your family’s future.