US Families Are 'Woefully Under Prepared' For The Great Wealth Transfer
US Families Are 'Woefully Under Prepared' For The Great Wealth Transfer
Maya Benjamin Sun, August 11, 2024 Yahoo Finance
The greatest intergenerational wealth transfer in history is underway, and people are unprepared, according to Michael Pelzar, head of investments at Bank of America Private Bank.
"Nearly half of wealthy families don’t have the most basic elements of estate planning in place,” Pelzar said. “What that means is that families are woefully underprepared for that wealth transfer that’ll be taking place.”
Baby boomers alone are projected to pass down over $68 trillion over the coming years. However, Pelzar explained that nearly half of wealthy families do not have the necessary preparations in place, such as a will, power of attorney, or healthcare proxy, to allow for easy inheritance.
“When problems arise with wealth transferring from one generation to the next, it’s when communications have broken down or have not taken place," Pelzar said. "People aren’t educated on the value of trust and their benefits."
Older Americans Set To Pass Along Trillions In Assets Chart: LINK
Christina Lecholop, a certified financial planner at CAPTRUST, attributed this lack of action on estate planning to the "expanding and complex" investment universe, a shift in the definition of retirement, a changing understanding of careers, and the geopolitical climate.
"People tend to delay because of uncertainty," Lecholop said. "There's a lot of headlines. There's a lot of noise that can tell people not to take action when I think that they should. And while that's all a very real consideration to pay attention to, it's important to also get started, and when people hold on, they miss out on the opportunities."
Lecholop emphasized the benefits of working with a professional to help understand finances and establish goals and priorities that help dictate investment decisions.
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