Over the next few decades, the largest transfer of wealth from one generation to another will occur. Americans are largely unprepared for it.
Imagine that you had $3.2 trillion. Imagine that you were about to give all of it to someone else. If you did not prepare for how that money would be transferred and what the receiver should do with it, then you might assume that a lot of that money would go to waste.
People who are not prepared to receive large sums of money, do not normally deal with it well. This is especially true, if they are unprepared.
Collectively, that is exactly where the U.S. finds itself today.
The Baby Boomer generation will transfer $3.2 trillion to their heirs. Most people have not made proper preparations.
All of this is according to a new report from the Royal Bank of Canada Wealth Management, as reported by Private Wealth in “Americans Unprepared To Transfer Trillions, Report Says.”
Most Baby Boomers did not talk to their parents about their inheritances.
In turn, Baby Boomers have continued that tradition and are not communicating with their children about what they stand to inherit and how to manage it. Most do not even have wills, let alone any sort of comprehensive estate plan or wealth transfer plan.
While that might not seem like a big deal for any one family, it is a huge issue for the nation as a whole. Without proper preparation, there is a good chance that much of the $3.2 trillion could be wasted and lost.
If you plan to leave an inheritance to your children, it is important that you talk to them about it and what they should do to preserve it. It is also important to go to an estate planning attorney and make sure that the wealth transfer is done properly.
Reference: Private Wealth (Feb. 2, 2017) “Americans Unprepared To Transfer Trillions, Report Says.”