Older generations have already begun transferring trillions of dollars in wealth to their families and to charity in a process that many wealthy families aren’t as prepared for as they should be.
Estimates vary on exactly how much money will move from one generation to the next and when, but one thing is clear: it’s a lot. The UBS Global Wealth Report 2025 estimated that $83 trillion will transfer over the next 20 to 25 years, while Cerulli Associates estimated in 2024 that $124 trillion will transfer through 2048.
A July report from Visa Business and Economic Insights, meanwhile, finds that of the approximate $93 trillion in wealth held by baby boomers today, only $36 trillion will pass on to Gen X and millennials. Visa’s figures subtract liabilities, exclude the top 1%, and account for retirement, donations, taxes, and fees.
Whatever the figures are, it turns out that this “great wealth transfer,” as it has long been called, is less a “single moment than a prolonged transition,” BNY Wealth said in a report released on Wednesday.
“There’s a big disconnect between intention and execution,” Alvina Lo, head of Advice, Planning & Fiduciary Services at BNY Wealth, said in an interview.
The wealth management firm’s report is based on a Harris Poll survey of 501 individuals with at least $10 million in investable household assets conducted in March.
A key reason for this lack of execution is that 48% of those surveyed believe their heirs are only “somewhat prepared,” “not very prepared,” or “not prepared at all” to handle an influx of wealth.
Wealthy survey respondents ages 45 and older believe their heirs are even less prepared than wealth owners who are younger, because they “have more appreciation for family dynamics and the conversation that needs to happen before they’re ready to pass their wealth on to the next generation,” Lo says.
The survey found, for instance, that 17% of respondents said discussions about transferring wealth had already caused conflict within their families, while another 27% expect such conversations to create conflict.
“It’s a little chicken and egg,” Lo says.
Conversations around death and money are uncomfortable and can raise issues, so people avoid them, making it harder to properly plan.
“It’s incumbent upon advisors to help our clients break that cycle,” she adds.
Years ago, wealth managers spent much of their time explaining the technical aspects of estate planning—educating clients about what types of structures are best “and convincing them why they should do some planning,” Lo says.
Today, many know what they should do—and, according to the survey, 44% of respondents have used artificial intelligence to figure out how to do it—but they need help getting through the difficult conversations required to implement a strategy, she says.
Among the reasons wealth owners cited for delaying plans were concerns that heirs lack experience handling significant amounts of money (45%), are too young or dependent on others (44%), or aren’t financially literate (42%), among other concerns.
Those who break through those barriers to have conversations with heirs, and put structures in place, are more likely to pass wealth on earlier, Lo says.
Another reason for the delayed transfer is that people—especially those with resources to afford better healthcare and nutrition—are living longer. That means passing wealth along is taking place over longer time periods, requiring “multidecade planning, stewardship, communication and gradual asset transfer,” the report said.
Even though 55% of those surveyed don’t intend to give their wealth away until they die, Lo said she has seen a clear trend over the last 20 years of families becoming increasingly open to giving up wealth earlier. Often this begins with annual gifts to children and grandchildren, helping them buy homes or covering private school tuition.
Yet another reason the ultrarich delay wealth transfer is that two-thirds have money tied up in a single asset, usually real estate or a privately held business. Data from the Federal Reserve’s Survey of Consumer Finances and Financial Accounts of the U.S. show that baby boomers—roughly aged 62 to 80—hold $19.5 trillion in real estate and $8.1 trillion in unincorporated businesses.
Passing those assets along to others requires thinking about the tax implications of selling, among other concerns. According to BNY, within 20 years, 62% of those surveyed expect to sell or divest a significant portion of their real estate holdings and 55% will divest their privately held assets.
One strategy for owners who plan to sell their businesses is to place the business in a trust, Lo says. This kind of pre-transaction planning accelerates gifting, and reduces taxes because future appreciation in the business will be out of the owner’s estate. “Here is where an analytical approach helps move a client from intention to execution,” she says.
Write to Abby Schultz at abby.schultz@barrons.com