In the best possible way, many people shared the recent WSJ article The Great $110 Trillion Wealth Transfer Won’t Happen Any Time Soon by Rachel Louise Ensign and James Benedict with me this week. This conversation is happening across America right now. It's in the ether, and families are trying to understand their particular situation within this broader context.
For those who don’t subscribe to The Journal, the most critical concept is “the process may be more of a slow drip than a sudden windfall.” And this makes sense, in that the micro will be driven by individual family situations whereas the macro will show the aggregate result of these particulars.
But what is the result? That depends on the generation:
- Boomers - With Mom and Dad and Grandma and Grandpa living longer, we need to ensure that they are well taken care of, can ride off into the sunset, and secure their legacy
- Gen X - We are the Sandwich Adults, with a delayed inheritance, figuring out how to concurrently raise Parents and Children, and taking our place as the new or upcoming family patriarch and matriarch
- Millennials - These fine folks are figuring out how to thrive in a changing economy and world order, wanting to buy their first home, be debt free, or start a business to move their lives forward
Rooted in these realities, what can we do? First, we need to make sure Mom and Dad and Grandma and Grandpa’s estate is in good order (same with our own, while we're at it). 12M families are about to give $1-5M of inheritance to the Next Generation, but are they? 50% of homeowners do not have a will, which means all of that wealth will go to the tax man and the probate courts.
We must organize, secure, and appropriately share the critical family paperwork in order to protect our wealth and legacies. These are the wills, trust, POAs, life insurance policies, and account information. We must account for the family assets and liabilities. These are the bank accounts, investments, real estate holdings, and family heirlooms which help fortify the next generation and support multigenerational legacies.
And once we’ve organized, we can optimize. There are so many ways to make and save more money as a family. Do you have the best high yield savings account? Would a home equity investment be right for your family? Is there a tax advantaged strategy that should be explored?
The business of your family matters. Our family wealth and legacy matters. Ensuring that our children are given a better life than was given to us matters. We may think we have time, but life always shows us we do not. We must and can help ourselves. We can move our families forward…