By Dave Kopyc
Over the next two to three decades, the world will witness one of the largest intergenerational wealth transfers in history. An estimated $85 trillion is expected to pass from Baby Boomers to their Gen X and Millennial heirs in the United States alone. This unprecedented financial shift is reshaping how individuals approach retirement planning, inheritance, tax strategies, and financial legacy.
As people live longer and families become more financially interconnected, preparing for this massive wealth transition is essential—not just for those passing on assets, but also for those who will inherit them. Effective retirement planning now means more than just ensuring you don’t outlive your savings. It also means positioning your wealth in a way that aligns with your values, minimizes tax liabilities, and ensures smooth succession.
Baby Boomers, born between 1946 and 1964, collectively hold more than half of all U.S. household wealth. Much of this is tied up in real estate, investment portfolios, family businesses, and retirement accounts. As this generation enters advanced retirement or passes away, these assets will gradually transfer to younger generations.
Estimates from Cerulli Associates indicate that roughly $84-85 trillion will transfer through inheritances and estate planning by 2045, with $72.6 trillion going directly to heirs and another $11.9 trillion to charities. For both givers and recipients, planning is essential to preserve this wealth.
For retirees with significant assets, estate planning must be an integral part of retirement strategy. A comprehensive estate plan includes wills, trusts, power of attorney, and healthcare directives, ensuring that assets are distributed as intended and legal hurdles are minimized.
Trusts, in particular, offer tax advantages and control over how and when heirs receive assets. Revocable living trusts allow flexibility during life, while irrevocable trusts can reduce estate taxes. High-net-worth individuals should also consider gifting strategies during their lifetime to reduce the taxable estate.
With the lifetime estate and gift tax exemption currently at $13.61 million per individual (as of 2025), many affluent retirees are leveraging this window to gift assets to heirs before potential future reductions. However, once the exemption sunsets in 2026 (unless legislation extends it), it could drop to about $6–7 million, potentially increasing tax exposure.
Retirees should work with financial advisors to employ tax-efficient strategies like Roth IRA conversions, charitable remainder trusts, and donor-advised funds. Managing required minimum distributions (RMDs) from retirement accounts can also reduce taxable income and preserve capital.
Receiving a significant inheritance can be both a blessing and a challenge. Without proper financial literacy or guidance, heirs may squander what took decades to build. Planning is crucial for recipients to make the most of their inherited wealth.
Heirs need to understand what they are inheriting—whether it’s real estate, investments, retirement accounts, or a business. Different assets have different tax implications. For instance, inherited IRAs require distributions, while real estate may benefit from a stepped-up cost basis.
A sudden influx of wealth can impact retirement timelines, investment strategy, and lifestyle. However, instead of relying solely on inheritance, younger generations should continue building their own retirement plans—maximizing 401(k)s, Roth IRAs, and other vehicles—to maintain financial independence.
One of the most overlooked elements of retirement and inheritance planning is open family communication. Many families avoid conversations around money, death, and legacy, leading to confusion, disputes, and misaligned expectations after a loved one passes.
Retirees should hold intentional discussions with heirs, clarifying estate plans and sharing the values behind their financial decisions. Legacy planning is not only about transferring money, but also about passing on stories, lessons, and philanthropic goals. Tools like ethical wills or family mission statements can help solidify a legacy beyond wealth.
With so many moving parts—changing tax laws, volatile markets, and complex family dynamics—working with a team of professionals is more important than ever. A coordinated approach involving financial planners, estate attorneys, tax professionals, and even family counselors can ensure that wealth is preserved, protected, and purposefully passed on.
Advisors can help retirees:
• Navigate changing estate tax laws
• Create trusts and legal documents
• Plan charitable giving strategies
• Educate heirs on financial management
• Adjust portfolios for longevity and legacy
For younger generations, advisors can help integrate inheritance into a holistic financial plan, optimize tax strategies, and plan for their own retirement and legacy.