A monumental financial shift is quietly reshaping the U.S. economy. An estimated $124 trillion is expected to change hands by 2048 in what’s often called the Great Wealth Transfer. The scale of this change creates opportunity for families – but it also raises practical questions about taxes, timing, control and communication.
Those planning to pass on wealth may be wondering: How much should I give while I’m alive versus how much should I leave behind? What is the most tax-efficient approach? And how do I set expectations so an inheritance supports my family’s financial future rather than complicates it?
Our new white paper, “The Great Wealth Transfer: The Givers,” helps you navigate these questions as you plan for this transition. Part one of a two-part series, the paper provides a guide for those preparing to pass on wealth.
In this article, we’ll cover some of the paper’s key highlights: core building blocks of estate planning, an overview of the transfer tax landscape, how to clarify what you want your wealth to accomplish and how to bring your family into the conversation, so the plan has a better chance of succeeding.
To understand why this transfer is happening now, it helps to start with the simplest explanation: Americans have accumulated more wealth than ever before. U.S. household wealth has remained near a record high, reported at $183 trillion in Q1 2026, supported by rising home prices and equity markets (despite periodic dips).
Intergenerational transfers are also a steady, ongoing flow rather than a single event. Family wealth consultant James “Jim” Grubman has estimated that roughly $1.5 trillion to $2 trillion transfers annually, broadly consistent with the long-run pattern of about 1% of total wealth moving each year.
Finally, demographics matter. As older Americans age into later-life planning (and, for many families, into liquidity events and estate settlement), planning questions that were once theoretical become immediate: What is being transferred – and to whom, when and under what conditions?
The baby boom saw nearly 80 million people born between 1946 and 1964 – making it substantially larger than the generation that preceded it and Generation X, which followed. Those baby boomers and older generations – roughly those age 61 and older in 2026 – hold substantial assets and are increasingly transferring wealth during life as well as at death and are the primary givers in this wealth shift. Cerulli Associates estimates nearly $124 trillion will transfer by 2048, with the majority going to heirs (roughly $105 trillion) and a significant portion to charity (roughly $18 trillion).
Recipients of this wealth include Gen X (born 1965 to 1980), millennials (also known as Generation Y; born 1981 to 1996) and Generation Z (born after 1997) – roughly those age 60 and younger in 2026.
Two quick points can help put the Great Wealth Transfer in context:
- The transfer is concentrated: A relatively small share of households holds a large share of assets. Per the Federal Reserve’s Survey of Consumer Finances, only about one in five Americans has received an inheritance.
- “Next-generation” often doesn’t mean 20-something-year-olds. Many inheritors in this transfer are in their 50s and 60s and already have children or grandchildren of their own.
There’s also an important shift happening in terms of the decision-makers themselves. Because women tend to outlive men, a significant share of assets is moving under women’s control as a result of a “horizontal” transfer to surviving spouses. McKinsey has estimated that by 2030 women will control about $34 trillion, or 38% of total U.S. assets.
Many estate and gifting choices are made – or revisited – during major life transitions such as retirement, widowhood or a change in household finances. That makes it even more important to work with an attorney to keep documents current, beneficiary designations aligned and the plan easy to administer for the person who may ultimately be responsible for carrying it out.
The upshot of all this? Planning matters – and it can make a wealth transfer more likely to be successful. But it doesn’t need to be intimidating. The goal is to match tools and tactics to your life, your family and your values.
A strategic estate plan helps ensure your assets are distributed according to your wishes and that your affairs can be managed if you become incapacitated. It can also help minimize taxes, reduce administrative friction and prevent disputes – especially when your intentions are communicated clearly.
Most foundational plans include several core documents:
For many high-net-worth families, planning may also include an irrevocable life insurance trust (ILIT). Even more advanced approaches might involve irrevocable trusts, family entities (such as a family LLC) and other specialized structures. Regardless of complexity, though, the most important aspect of an estate plan is regular maintenance: Revisit documents with an attorney after major life events, significant changes in wealth, moves across state lines or other meaningful changes in family circumstances.
What to consider when developing a wealth transfer strategy
Before focusing on the “how,” consider the “why.” Your wealth ultimately goes to one of four places: yourself (through what you spend over your lifetime), other people, charity and taxes. Changing one category affects the others. Spending more reduces what’s left for heirs or philanthropy. Likewise, giving more to charity can reduce taxes, but it may also reduce what individual beneficiaries receive.
As you define your estate planning priorities with your attorney, considering four levers that shape most strategies:
- When you transfer (during life, at death or both)
- How tax-efficient you want to be
- How much control or protection you want built in (often via trusts)
- How – and when – you will communicate your plan to family and beneficiaries
Even a well-drafted plan can go awry if the people involved don’t understand the intent or don’t feel aligned with the plan overall. Clarity early on can prevent misunderstandings later.
Regardless of when you pass on your wealth, there will likely be taxes involved. The federal government and many states impose taxes on wealth transfers at death, and the federal government and the state of Connecticut impose a tax on lifetime gifts. The federal government and a small number of states also impose an additional tax on transfers to beneficiaries two or more generations younger than the giver. (This is known as the generation-skipping transfer, or GST, tax.) Transfers between spouses are generally tax-free, with special rules in certain circumstances.
Most Americans will never owe federal transfer taxes due to generous exemptions and exclusions in the tax code. The federal lifetime gift and estate exemption in 2026 is $15 million per individual. This means (in 2026) your first $15 million of gifts are exempt from tax, and whatever amount is left of your exemption after you die is applied to gifts from your estate. Any gifts or estates above the exemption amount are taxed at a flat 40%.
There’s also an annual gift tax exclusion ($19,000 per recipient per donor in 2026) that is independent of your lifetime exemption – giving the $19,000 does not reduce your $15 million lifetime exemption. You can also take advantage of the “Med-Ed” exclusion, which allows certain medical and education payments to be excluded from both gift and GST tax when paid directly to providers (subject to specific rules).
Giving during your lifetime can be meaningful to you as well as to the recipients of your generosity – you can see the impact of your generosity and share in your beneficiaries’ experience. Doing so also allows you to communicate your intent and expectations to them directly rather than relying on a letter or instructions discovered after your death.
Lifetime giving can also reduce the size of your taxable estate. And, in many cases, lifetime gifts can be “cheaper” than transfers at death because of how transfer taxes are calculated: Gift tax is generally imposed on the amount given and paid from other assets, while estate tax is imposed on the entire estate before distributions are made.
How to decide if lifetime giving works for you
Lifetime giving should start with a simple question: Do you have the financial capacity to give? “Enough” is different for every family. A personalized financial plan can help you assess whether you can transfer assets without risking your own lifestyle, flexibility or long-term care needs. You’ll want to project asset growth, expected inflows, and expected or desired spending across your lifetime, including stress tests for longevity and market drawdowns. Only after that work does it make sense to decide how much to give during your lifetime, how frequently and under what structure.
One advantage of passing on assets at death is the step-up in tax basis to fair market value (FMV), which can significantly reduce capital gains taxes when beneficiaries later sell inherited assets. Rules vary based on state property regimes and how assets are titled.
It’s also a misconception that you must choose between leaving assets in your will or in a trust. But it’s common for people to create “testamentary trusts” in their will, which go into effect after their death. This can provide control and protection without requiring that assets be held in trust during their lifetime.
In other situations – especially where probate is costly or cumbersome – a revocable trust can help your family streamline administration, avoid probate and even manage assets in the event of your incapacity.
Title your assets properly to avoid surprises
How assets are titled can determine how they transfer – sometimes regardless of what a will indicates. For example, assets titled jointly may pass directly to the named person, while others may have to go through probate.
Probate is the legal process in which a court validates your will and the administration of your assets after you’ve passed. Probate processes vary by state, and owning property in multiple states can trigger multiple probate proceedings.
Many families aim to reduce probate exposure by ensuring assets are held in “nonprobate” form where appropriate. This could include assets held in joint ownership with rights of survivorship, POD/TOD (payment on death/transfer on death) accounts, accounts and insurance policies with beneficiary designations, and assets held in most trusts.
Once you’ve clarified your purpose and how much you’re able to give, the next decision is whether to give outright – with no restrictions – or to give through a structure that limits access or adds protection.
Some common tools include custodial accounts for minors (simple, but control shifts at age 18 or 21 depending on state law), 529 education savings accounts (tax advantages for qualified education expenses, but additional taxes and penalties for nonqualified uses) and certain trusts designed for minors that can provide more structure than a custodial account.
For larger or more complex goals, families often consider irrevocable trusts, which generally remove assets from the taxable estate and can provide creditor protection and control over distributions. The trade-off is both complexity and important tax nuances. For example, assets in irrevocable trusts generally do not receive a step-up in cost basis, which can affect future capital gains.
Specialized approaches may include grantor trusts, dynasty trusts, ILITs, spousal lifetime access trusts, grantor retained annuity trusts and directed trusts. You can find more information about these in the white paper. The right option for you depends on your goals and your tolerance for complexity. There’s no universal “best” – only what best aligns with your priorities.
The Great Wealth Transfer is a financial event, but it’s also a family event – one that requires careful planning and open communication. Engage your advisors early and often, coordinate with your tax and estate attorney, and bring beneficiaries into an ongoing dialogue so your legacy can flourish in the hands of future generations.
