The Baby Boomer Wealth Transfer to their Children

The Baby Boomer generation, born between 1946 and 1964, has long been regarded as one of the largest and most influential generations in history. As they are now reaching retirement, the process of Baby Boomers passing down their wealth to Millennials/GenZ/GenX, has begun. Trillions of dollars will change hands over the coming years. The beneficiaries of this wealth transfer, primarily Generation X and Millennials, will have the opportunity to inherit assets such as real estate, financial investments, and family businesses. The 2008 recession decimated the younger generations, their earning potential, and their ability to reach certain milestones. The transfer of wealth may help correct that course, somewhat. The magnitude of this transfer also raises questions about how the younger generations will manage and utilize their inherited wealth, potentially shaping their financial futures and societal outcomes in the years to come. If you reside in the United States, you may find some of these options helpful when it comes to transferring your property.

When it comes to housing, however, there may be alternatives to look at, rather than simply passing it through a Will:

  1. Passing down that money in the form of a Trust ( a revocable living trust or an irrevocable trust)
  2. Gifting the house (this can include gifting property while you’re still alive)
  3. A life estate (Life estates can create a kind of joint partnership)
  4. A 1031 Exchange for Investment Properties (deferring capital gains)

You can read more about the options available, here.