The Wealth Transfer of the Century Is Underway. Here Is Where $84 Trillion Is Going.

The nation’s estate planning lawyers’ offices are busier than they have been in decades. It’s due to something much more intimate rather than a legal scandal or change in regulations. The aging of an entire generation brings with it the silent, difficult task of determining the ultimate destination of a lifetime of labor. This moment’s numbers are astounding.

Over the next 20 years, an estimated $84 trillion in wealth will be transferred to charities and their heirs by Baby Boomers, the massive post-war generation that established careers during America’s most prosperous decades. After accounting for inflation and the surge in asset prices during the pandemic, some researchers now estimate the actual amount to be closer to $124 trillion by 2048. In any case, the figure is so big that it hardly seems real.

However, the effects are already being felt in financial advisory offices, law firms, and family dining rooms, where previously avoided conversations are now inevitable.

This change has been closely monitored by Boston-based wealth management research firm Cerulli Associates. According to their analysis, Baby Boomers and older Americans now own about 61% of the country’s wealth, up from 54% just three years ago. When the handoff occurs, it will be massive due to the concentration at the top of the age pyramid.

$72 trillion of the total is expected to be inherited by Gen X and Millennials combined, with the remaining funds going to charitable institutions. Perhaps no economic development in contemporary American history will have such a profound impact on personal finance.

The timing has an almost poetic quality that is also a little unsettling. Over the next ten years, Gen X—the generation that saw 38% of its median net worth disappear during the financial crisis between 2007 and 2010—is expected to inherit almost $1.4 trillion annually. more than any other group of people. Suddenly, a generation characterized by hard-won pragmatism and financial anxiety stands to gain the biggest windfall of their lives, frequently while still covering their children’s college expenses and taking care of their aging parents’ medical needs. It’s not a coincidental squeeze. Being caught in the middle, as usual, is, in a way, the defining characteristic of Gen X’s financial experience.

In contrast to Gen X, who will receive $39 trillion, Millennials are expected to receive the largest total haul over the course of the next 25 years—roughly $45.6 trillion by 2048. This generation saw their early savings stagnate, postponed marriage and homeownership, and joined the workforce during the Great Recession. Although the wealth transfer won’t make up for those lost years, it will most likely alter millions of households’ financial paths in ways that are still unpredictable.

What this change means for women in particular is one of its more notable aspects. According to the Cerulli report, widows from the Boomer generation are expected to receive approximately $40 trillion in “horizontal transfers”—wealth that moves between spouses before it ever reaches the following generation. With an average spousal transfer of about $1.4 million, more than 28 million women are predicted to take on the role of primary asset managers in their families as they outlive their husbands.

Over the same time period, younger women of all generations could inherit an extra $47 trillion. It’s difficult to ignore the fact that this is one of the biggest increases in female financial control in American history, among other things, and that it’s occurring due to demographics rather than legislation or protest.

For years, the legal sector has been discreetly getting ready for this. The biggest law firms in the nation have hired 40% more trust and estate attorneys since 2019, according to Firm Prospects, a legal market analytics platform. Compared to a short time ago, when trust and estate practices were declining at many firms as a result of low demand, that represents a dramatic reversal.

Now, it’s the other way around. Due to the complexity of taxes, family disputes, charitable giving tactics, and the sheer number of assets that require appropriate legal structure before they can be moved, estate planning has evolved from a specialty to one of the most sought-after areas of legal work in the nation.

With laws like the Trust and Estate Dispute Resolution Act (TEDRA), a framework created especially to direct the settlement of estate disputes, Washington State has attempted to get ahead of this. It is one of the increasing number of states admitting that the inheritance laws were not designed to handle a transfer of this magnitude.

Naturally, the distribution of wealth is not equitable. The richest 10% of Americans own the majority of this $84 trillion. The wealth of the top 1% is equal to that of the bottom 90% put together. The inheritance discussion is genuine but more modest for the majority of middle-class families: a house, a few retirement accounts, or even a small business. Even so, those smaller transfers are often surprisingly complex and carry a great deal of emotional weight.

Observing all of this gives the impression that America is about to enter a phase of significant financial restructuring. One estate plan at a time, quietly and steadily, the Great Wealth Transfer of the Century has already begun.