Recently there’s been a statistic going around the financial press that the Boomers and Silent generation control over 50% of the net worth in this country, even though demographically, these two generations make up about 20% of the population. As we all know, we can’t take it with us, and so according to Cerulli Associates, an estimated $84 trillion will be passed down to millennial, Gen X and Gen Z heirs over the next 20 years! Nearly 20 percent of that total – about $16 trillion – is projected to be transferred within the next decade.
Are your heirs prepared?
The risks of being unprepared may be devastating to generational wealth. Heirs who unexpectedly inherit and manage wealth often face immense stress, compounded by the emotional weight of losing a loved one. This vulnerability can make navigating complex financial challenges even more difficult.
Don’t wait until it’s too late – assess your situation, determine the gaps your heirs may have in financial literacy, and start preparing them to responsibly manage their future inheritance.
Why Early Preparation Matters
It’s no secret that financial literacy remains low across the United States, with less than 50% of the TIAA Institute-GFLEC Personal Finance Index questions answered correctly, on average, by U.S. adults in 2025. Financial literacy is particularly troubling among millennials and Gen Z – the generations most likely to soon inherit the bulk of the wealth.
Sudden wealth syndrome is an identity crisis often faced by individuals who have to manage wealth unexpectedly. In fact, there are some well documented cases of lottery winners going bankrupt a few years after they won, because they weren’t ready for the responsibility of managing a large amount of money brings. Inheriting large sums of money without proper planning may inflict severe consequences on the inheritors, from isolation to guilt over their sudden wealth and extreme fear of losing it.
By preparing your beneficiaries to receive your wealth, you may:
• Prevent conflict among family members.
• Enhance the likelihood that your family’s values and wishes are honored, preserved, and passed down.
• Help family members avoid financial stress.
• Equip heirs with the advisory team and tools needed to preserve your family’s wealth for generations to come.
How to Prepare Heirs for an Inheritance
Helping your children feel confident and capable of managing your wealth should start long before they receive it. Here are a few steps you can take to prepare your heirs for financial success:
1. Practice discussing finances early. This should traditionally be done when your kids are young, however if they are older there’s still value in having dialogue about money. Open communication is the basis of financial confidence. You may normalize the conversation by talking about money with your children before it’s tied to the stress of inheritance. Sharing your approach to saving, spending and giving may help build trust between you and your children while preparing them to handle wealth responsibly.
2. Bridge the gap between your financial advisor(s) and your children. Introduce your children to the team who helps manage your finances. When your children inherit your wealth and inevitably want guidance from a trusted professional, they’ll know to turn to your team of advisors who understand your values and financial priorities.
3. Review financial and estate plans together. It’s important for your children to understand the decisions you’ve made in the financial planning process, but it’s equally important for them to understand why. Explaining what goals you’ve prioritized and how each component of your plan fits together to achieve those goals may prevent confusion or conflict in the future.
4. Discuss your legacy. It’s not all about money. Talk openly about the values that guided your choices and how you envision your wealth making an impact in the future – through charitable giving, educational investment, or community involvement. Discussing your legacy at length may help heirs view their inheritance as a responsibility to preserve it and hopefully grow the family’s wealth more than just short-term monetary gain.
The Value of Financial Advisors during Wealth Transfer
Navigating the complexities of next-gen wealth planning isn’t easy for families. Financial advisors may play an invaluable role in this process by:
1. Offering objective guidance. Conversations around money, the reality of aging and the hope for the legacy you’ll leave behind can be both emotional and uncomfortable. Financial advisors may provide perspective, helping to facilitate discussions from an unbiased, professional point of view.
2. Leveraging deep industry knowledge. Advisors generally serve as a resource for families to lean on. They focus on long-term goals and help each individual family member understand their role in upholding your legacy and the purpose behind your family planning decisions at a more holistic level.
If you haven’t started preparing your heirs to receive guidance toward their future inheritance, starting now may make all the difference.
Connect with our advisors to help prepare the next generation to handle your family’s legacy with care and purpose.
Derek Amey serves as Managing Partner and CIO at StrategicPoint Investment Advisors in Providence and East Greenwich. You can e-mail him at damey@strategicpoint.com.
The information contained in this post is not intended as investment, tax or legal advice. StrategicPoint Investment Advisors assumes no responsibility for any action or inaction resulting from the contents herein. Derek’s opinions and comments expressed on this site are his own and may not accurately reflect those of the firm. Third-party content does not reflect the view of the firm and is not reviewed for completeness or accuracy. It is provided for ease of reference.
Certain statements contained herein may be statements of future expectations and other forward-looking statements that are based on SPIA’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words “may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue” and similar expressions identify forward-looking statements. Forward-looking statements necessarily involve risks and uncertainties, and undue reliance should not be placed on them. There can be no assurance that forward- looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. SPIA assumes no obligation to update any forward-looking information contained herein.