You often hear people talk about the wealth gap between older generations and younger generations. This has reached historic proportions. Recent reports claim that the Baby Boomer generation, for instance, has around $68 trillion. They are passing that down to their children, a process that has been termed the largest wealth transfer in history.
Not all of this wealth is purely financial assets. For instance, many wealthy people own businesses or significant investments. But it is still clear that they are passing an extraordinary amount of wealth down to the next generation of Americans.
The largest percentage of wealth ever
It is sometimes difficult to measure wealth levels across generations. After all, with inflation, money today is worth less than money was worth 50 years ago. A million dollars really doesn’t go as far as it used to.
However, studies have looked at the percentage of wealth each generation has. What they have found is that Baby Boomers have the greatest percentage. So it’s not just that they have more assets than any other generation, based only on the pure value of those assets. They also have a greater proportion of today’s wealth than any generation before them has ever kept for themselves.
Of course, no generation can truly keep any of their wealth for themselves. It all has to be passed on eventually. That’s why it’s so important for people who are in the middle of this process to understand exactly what legal steps they will need to take. This is going to be not only the largest but also the most complex wealth transfer in American history. Are you (and your estate plans) ready?