The Great Wealth Transfer: Are the Next Generations Ready?

FaithFi: Faith & Finance | Feb 27, 2025

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Show Notes

The Puritan poet Anne Bradstreet once wrote, “Wisdom without an inheritance is better than an inheritance without wisdom.” These words are just as relevant today as they were in the 17th century, especially as we approach one of the largest wealth transfers in history.It’s estimated that Baby Boomers will pass down as much as $68 trillion to their heirs by 2030. But is the next generation prepared to manage this wealth wisely? Research suggests that many are not. Let’s explore what this historic transfer means, the potential challenges, and how families can prepare.

Biblical Wisdom on Wealth and Inheritance

Anne Bradstreet was undoubtedly inspired by Ecclesiastes 7:11-12, which says:

“Wisdom is good with an inheritance, an advantage to those who see the sun. For the protection of wisdom is like the protection of money, and the advantage of knowledge is that wisdom preserves the life of him who has it.”

While passing down financial assets is important, passing down financial wisdom is even more crucial. However, research shows that many Boomers are not equipping their heirs with the knowledge needed to manage this wealth effectively.

A recent study by investment giant Edward Jones found that:

48% of Americans plan to leave an inheritance.
50% will leave money and property to their children only.
36% will pass down assets to both their children and grandchildren.

While these numbers show a strong intention to pass down wealth, the study also revealed some concerning trends:

Only 27% of Americans have discussed wealth transfer with their heirs.
35% said they don’t plan to have that conversation at all.

That means millions of Millennials and Gen Z-ers may inherit significant wealth without the financial wisdom needed to steward it well. Experts warn that it is more important than ever for families to discuss wealth transfer and seek professional guidance when necessary.

Four Common Approaches to Wealth Transfer

Although this is the largest generational wealth transfer in history, not all heirs will receive as much as they might expect. One major reason for this is increasing life expectancy—Boomers are living longer and consuming more of their assets, particularly due to rising healthcare costs.

The Edward Jones study identified four main ways wealth is being transferred:

1. Traditional Giving

This is the most common method, where parents pass their wealth—cash, stocks, real estate, and other assets—directly to their children. However, conversations are needed to ensure both generations understand the plan. Parents should also be mindful of using enough assets to maintain their own healthy and secure lifestyle in retirement.

2. Giving While Living

Rather than waiting until death, some Boomers are helping their children and grandchildren now by:

Paying for education
Assisting with a home purchase
Covering major expenses like vacations or medical costs

While this can be a blessing, it also raises concerns. Some heirs may wonder if there will be anything left for them later. Early conversations about financial plans can help alleviate these concerns and ensure realistic expectations.

3. Generational Skipping

Some Boomers are choosing to pass wealth directly to their grandchildren instead of their children. This may be done to:

Pay for education
Help start a business
Set up an investment account

A surprising one in four respondents in the Edward Jones study believes their grandchildren will be better stewards of wealth than their children. However, skipping a generation in inheritance can strain family relationships. Open communication is key to ensuring no one feels left out or overlooked.

4. No Inheritance Left

Some Millennials and Gen Z-ers may find there is little or nothing left for them to inherit. Longer life spans and increasing costs may require Boomers to use up more of their assets in retirement.

Financial experts generally recommend retirees withdraw no more than 4% per year from their retirement savings to preserve their assets. However, that may not always be possible, especially with rising medical expenses.

How to Prepare for a Successful Wealth Transfer

Open and proactive communication is the key to a smooth and responsible wealth transfer. Here are some steps families can take:

1. Have the Conversation

Boomers should sit down with their adult children and discuss their financial plans. This conversation should include:

An overview of assets and how they will be distributed
Any expectations about financial responsibility
A discussion of family values regarding stewardship and generosity

2. Hold a Family Conference

One conversation may not be enough, as financial situations and family needs evolve over time. Regular discussions—perhaps with the help of a financial advisor—can help keep everyone on the same page.

3. Seek Professional Guidance

For families needing help navigating wealth transfer, a Certified Kingdom Advisor® (CKA®) can provide expert financial planning with a biblical perspective. A CKA® can help structure inheritance plans in a way that honors God and ensures responsible stewardship.

4. Instill Biblical Financial Wisdom

Money management isn’t just about numbers—it’s about values. Future heirs need to understand that:

God owns everything, and we are stewards of His resources.
Managing wealth wisely means providing for family needs.
Generosity and giving back to God are part of faithful stewardship.

The upcoming wealth transfer is unprecedented, but wealth can quickly be mismanaged or squandered without financial wisdom. The best legacy Boomers can leave is not just money but the knowledge and faith to steward it well.

If you need help navigating these discussions, consider working with a Certified Kingdom Advisor®. You can find one at FaithFi.com by clicking “Find a Professional.”

By combining wealth with wisdom, we can equip the next generation to handle God’s resources faithfully and responsibly.

On Today’s Program, Rob Answers Listener Questions:

My friend's son is in a lot of trouble. His wife recently passed away, leaving him with a mountain of medical bills that he is overwhelmed by. He has moved into depression and is considering bankruptcy. Can you provide any advice or wisdom to help him navigate this situation?
I'm concerned about taking $575,000 from a traditional IRA and putting it into a Roth IRA over the course of 5 years. I'm worried about being able to pay the taxes on that. After the 5 years, will I have to pay any more taxes on the money in the Roth IRA, or will it be able to grow tax-free from that point forward?
My wife is now in a memory care facility, and I have documentation from her neurologist. Can I get any medical deductions on my taxes with this documentation? Also, I had to sell 40 acres of my farm for $297,000 to help pay for her healthcare. What kind of tax implications can I expect from that sale?

Resources Mentioned:

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