The great wealth transfer: What baby boomers need to know

Trillions of dollars in financial assets are expected to change hands in the upcoming decades as baby boomers give inheritances to their loved ones. It's being called the great wealth transfer.

For the older generation, this shift presents both opportunities and responsibilities with estate planning. Before the time comes, you can decide how your assets will be handled by your heirs and beneficiaries.

Whether you have a lot or a little, passing down your wealth thoughtfully is important. Preparation gives you control to maximize what you have to give and make it a smooth transition.

The great wealth transfer refers to a major shift in financial control as one of the largest generations, baby boomers, pass their assets to heirs and beneficiaries in younger generations.

It's a big deal because baby boomers control about half of the nation’s total wealth, and they're crossing a point where most are the common retirement age of 65 or older.

Wealth transferred between 2025 and 2048 is estimated to total $124 trillion, with over $105 trillion flowing to beneficiaries and $18 trillion to charities. Real estate, retirement accounts, investments and businesses are among the accumulated assets of baby boomers that recipients will inherit over the next two decades.

Your assets—including retirement savings, your home and other property—are too important to leave to chance. An estate plan clarifies who gets what, coordinates beneficiary designations, and can reduce taxes and probate delays.

When a person passes away without estate documents, courts will use state law to determine how the assets will be distributed. These decisions happen during the potentially long and costly probate process. Legal disputes between loved ones could arise, assets can lose value in the shuffle and heirs can face avoidable tax burdens.

Thoughtful estate planning can help control some of these outcomes. Preparing documents ahead of time ensures your assets are set to pass down your assets as you wish, aiming to preserve family harmony amid your legacy of generosity.

Estate planning involves reflecting on all that you've worked for, speculating what you want to do with it and taking legal steps to finalize your wishes. Here are some core considerations for wealth transfer strategies.

The most common way people transfer assets after death is by having documented instructions, usually with these methods:

• Use a will to state who receives specific assets and name an executor to settle the estate. You can leave anything you own to anyone, whether it's family, friends or an organization. When it's submitted to probate, your will becomes a public record. While the terms can be contested and your estate must pay your debts and taxes before anything is given away, bequeathing assets in your will can make their transfer smoother than not having any documentation.
• Coordinate beneficiaries on life insurance, IRAs and payable‑on‑death or transfer‑on‑death accounts. Beneficiary designations control those assets even if the will says otherwise. Some property, such as life insurance payouts and retirement assets, doesn't need to be included in a will or go through probate because it can pass through a beneficiary designation. This is the easiest way to transfer wealth because who you name will directly receive your assets upon your death.
• Create a trust when you want control over timing or use. A revocable living trust can streamline administration, while an irrevocable trust can remove assets from the taxable estate when structured and funded properly.

Your estate will be subject to federal estate taxes if its value exceeds the exclusion amount. Starting in 2026, that figure is $15 million per person.

If you’re concerned your taxable estate will be more than that, you might consider gifting assets to your heirs during your lifetime to decrease the tax obligation.

Transferring wealth by gifting is subject to federal gift tax, but only for amounts beyond the annual $19,000 exclusion, up to a $15 million lifetime exclusion (for 2026).

Generally, your debts and any estate taxes will have to be paid with estate funds. Plan for liquidity to cover taxes, debts and expenses so heirs don’t have to sell assets under pressure. Options include cash reserves, a well‑structured life insurance policy, or an irrevocable life insurance trust to keep proceeds outside the estate.

Estate planning is often most effective with a collaborative team that includes your financial advisor, an estate planning attorney and a tax professional. They can work with you to ensure you have all the information to determine which options are best for you. 

The other side of the great wealth transfer: What recipients need to know

What does the inheritance wave mean for heirs? Find out how they can prepare for and protect these new assets.

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The great wealth transfer is also an opportunity to pass on the financial know-how you’ve picked up in your lifetime. Educating your children, grandchildren and other loved ones about financial basics and long-term planning can help them understand how to be good stewards of their inherited wealth. 

Start conversations early to help your beneficiaries understand the social, economic and philanthropic values that have guided you throughout your life. Share examples of how you’ve used your financial resources responsibly and with intention to support the people and organizations you care about.

Hold family meetings to align expectations and share your intentions. Consider a letter of intent, a list of accounts and professionals, and guidance on values and giving. Discuss whether strategies like portability for spouses, step‑up in basis or trusts for grandchildren fit your goals.

It can be valuable for your beneficiaries to understand your intentions and work out any conflict while you can all talk about it together.

Without a clear estate plan, your loved ones may worry about what they're expected to do with your assets. Not only can it be stressful to take over someone else's lifetime of finances, but asset value and real money can be lost:

• Legal fees can add up if family disputes over who gets what delay the court in approving asset distribution.
• Maintaining certain property without being able to use it, like a house or investment account, can be costly if the estate is tied up in probate for months or even years.
• Your estate may end up paying more for tax liabilities than necessary without a tax-efficient strategy.
• Medical, funeral and other final expenses may fall to family members to pay out of pocket if joint accounts or a death benefit aren't readily accessible.
• Beneficiaries who aren't ready to handle a windfall may misspend their inheritance.

Estate planning aims to resolve these issues before they become problems. While some amount of fees and taxes are unavoidable and you can't completely control how assets will be used after you're gone—having your wishes documented can make the great wealth transfer easier for your loved ones.

You've worked hard for what you've accumulated, and it’s a blessing to have something to pass on to future generations. Making moves to secure your legacy is a thoughtful way to continue to make the most of what you have.

Preparing for the great wealth transfer means more than drafting documents—it’s about protecting the future. Talking with a Thrivent financial advisor can help you come up with a strategy that aligns with your values and prepares your heirs for success.