Baby Boomers are those born from just after the Second World War until 1964, and they represent a spike in the birth rate due to soldiers returning home and an economic boom for the United States; the war helped to bring the country out of the Great Depression. Over the decades, Baby Boomers have come to control much of the country’s wealth. Now they’re getting ready to pass it on.
The numbers are astounding. Forbes went so far as to call it “the greatest wealth transfer in history.” It appears that around $30 trillion will pass on to Baby Boomers’ heirs and the subsequent generations.
That doesn’t just mean money, although actual cash will play a big role. There is also the massive transfer of real estate, homes, businesses, business assets, art collections and much more. Everything that this generation has accumulated has to move on in some fashion. Much will stay with the families, but some will also go to charities and other organizations. Much will be paid in taxes.
There are a lot of interesting implications to this. How will future generations use their new-found wealth? For instance, some experts note that older generations trust the stock market more and invest more often. As they pass their money down, will their children be reluctant to invest? Will they cash out the investments they inherit? What will that mean for the market and the economy?
One thing is for certain: With this type of wealth transfer comes the need for careful planning. Make sure that you develop an estate plan that reflects your values and wishes.