The Great Wealth Transfer: Wealth Transfer and Estate Planning Strategies

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Key takeaways:

• The Great Wealth Transfer represents an estimated $124 trillion by 2048, creating both opportunities and complexities for families.
• Understanding your personal goals, getting organized, creating a plan and communicating with your heirs is key to a smooth transfer of assets.
• A well-structured estate plan, supported by experienced advisors, can help align financial decisions with personal objectives and long-term legacy goals.

Approaching the Great Wealth Transfer with intention

The Great Wealth Transfer refers to the historic transition of wealth expected to occur as Baby Boomers — Americans born between 1946 and 1964 — pass assets to younger generations and charitable organizations. As this significant shift unfolds, thoughtful legacy planning and estate planning strategies can help individuals and families preserve wealth, align financial decisions with their long-term values, and support the financial future they envision for generations to come.

According to Cerulli Associates, an estimated $124 trillion is expected to transfer between generations and charitable organizations through 2048. As wealth moves at this unprecedented scale, individuals and families are increasingly exploring wealth management and trust/estate planning strategies designed to help preserve assets, navigate financial complexity, and support long-term legacy and financial goals amid broader economic change.

On a family level, this shift also introduces complex decisions that can shape financial outcomes and family dynamics for generations. With so much at stake, thoughtful planning can help ensure that wealth transfers reflect personal values and support long-term legacy goals.

The following article outlines key planning considerations as families prepare wealth to transition from one generation to the next.

Establish giving goals

Successful wealth transfer strategies begin with clearly defined and shared goals. Financial and legacy priorities provide a compass for how assets are distributed and help your loved ones better understand your wishes.

Common giving goals include:

• Family: Supporting children or future generations through education, housing or long-term financial stability.
• Loved ones: Providing for partners, friends or close personal relationships.
• Philanthropy: Contributing to charitable organizations or causes to leave a lasting impact on the world.

Balancing these end-of-life giving goals with lifestyle and retirement needs is equally important, ensuring that current and future expenses remain fully supported. A comprehensive wealth plan can help align giving strategies with ongoing financial security.

Organize your estate

Once goals are established, organizing your estate becomes a critical next step. A well-structured plan helps to efficiently guide assets to the right parties, minimize confusion and reduce potential estate tax exposure.

Estate planning and documentation

Many estate plans start with a will, which outlines how assets should be distributed, appoints an executor to administer the estate and may name a guardian for minor children. Legal requirements vary by state, making careful preparation essential.

Trusts can outline additional details on how assets should be managed and distributed over time. A will is often paired with a revocable trust to help provide structure for asset transfers, designate a trustee to oversee administration, and, in some cases, avoid the time and expense of probate. In combination, these documents form the foundation of a strong estate plan.

With so many moving pieces, estate plans benefit from ongoing review and should be updated following life events, changes in assets or shifts in personal priorities.

Tax planning and mitigation

Understanding estate taxes is another important step of planning. Under current law, a defined amount of wealth may pass free of estate, gift and generation-skipping transfer taxes . In 2026, this Federal Estate Tax Exemption is $15 million. Assets exceeding this threshold may be subject to a 40% estate tax.

Other factors like marital and charitable deductions and state-level estate taxes can also affect tax exposure. Tax advisors and other estate planning experts can help navigate these complexities in any planning discussions.

How to plan your transfer

Not only does generational wealth planning provide you with the opportunity to think through different scenarios and align decisions with your evolving goals; it also can help you reduce the tax burden on your estate.

Common tax mitigation strategies include:

1. Lifetime giving

Transferring assets to family and loved ones during your lifetime can be a helpful way to reduce estate taxes. The IRS’s lifetime and annual gift tax exemptions can provide a structured way to do so.

It is also important to note that gifting appreciating assets, such as stocks and real estate, during your lifetime at a lower value before they appreciate can keep the growth out of the taxable value of your estate.

2. Irrevocable trusts

Transferring assets to irrevocable trusts is another way to reduce your taxable estate. A Qualified Personal Residence Trust (QPRT), for instance, can be used to transfer personal real estate to heirs. Additionally, a Spousal Lifetime Access Trust (SLAT) can allow you to transfer funds into a trust with your spouse as the initial beneficiary, removing assets from your taxable estate.

Additional vehicles, such as the Intentionally Defective Grantor Trust (IDGT), Grantor Retained Annuity Trust (GRAT) and Irrevocable Life Insurance Trust (ILIT) are also common vehicles for transferring assets.

Because trust-based strategies are often complex, they often require the advice of legal and estate planning experts. Consult with a professional advisor to see if one of these trust structures is right for your situation.

3. Charitable giving

Charitable giving can be a strategic way to achieve legacy goals, leave a lasting impact and reduce your tax burden.

By donating to a qualified charitable organization, you may be able to:

• Reduce your current income tax liability by receiving an income tax deduction for your charitable donation.
• Reduce the overall amount of your taxable estate.
• Eliminate capital gains on an appreciated asset.

Some individuals incorporate tools such as donor-advised funds, private foundations or charitable trusts to structure their giving over time.

Communicate with heirs

No matter the intricacies of your wealth strategy, open communication is a critical component of a successful wealth transfer. Without it, even well-designed plans can lead to confusion or unintended tension among family members.

Helpful practices include:

1. Creating space for open discussion. Often, the most important step is to make sure everyone is heard. By connecting with your family and loved ones and taking steps to engage in an honest conversation, you can unearth questions and address concerns.
2. Establishing a shared vision. The goal of your conversation should be a shared vision that helps unify your heirs and create a sense of purpose and responsibility for your loved ones.
3. Providing financial education and context. By planning early, you can free up time to provide your heirs with the knowledge and tools they need to manage their inheritance wisely. Share financial best practices, as well as logistical information on where and how to access assets.
4. Introduce trusted financial advisors.  If you’re working with a trusted financial advisor, it can be helpful to make introductions early. Giving your heirs an opportunity to form a relationship with your advisor can provide continuity and support when your time comes.

Clear communication helps align expectations and supports a smoother transition of wealth.

Begin planning to preserve wealth for future generations

How to preservePreserving generational wealth often begins with an intentional and well-structured plan. Effective wealth transfer strategies typically combine wealth management, trust and estate planning, tax considerations , and clear family communication to help align financial decisions with long-term goals and values. When approached thoughtfully, these strategies can help families preserve wealth across generations, reduce uncertainty, and create a lasting legacy for the future.

For more information, contact your Fifth Third wealth management advisor.