Recently, we came across this article about the massive intergenerational wealth transfer that is currently underway and what this UBS report tells us about it. Your family may be navigating a gradual wealth transfer over the next few decades as well, so you may find the points discussed of interest.
The next two to three decades are expected to mark the largest wealth transfer in modern history, with an estimated $83 trillion in private assets moving between generations. The scale of this transfer is certainly notable, but what is perhaps more interesting is how this transfer is occurring—and how the next generation is changing what wealth transfer looks like.
The article highlights that for the next generation, wealth transfer looks less like a reactive event after a family member has passed and more like a gradual shift in responsibility, with heirs taking over specific roles before assets formally transfer to them. As responsibility shifts earlier, do does communication. Families are beginning to involve heirs sooner, even in adolescence, as inviting them into conversation earlier helps to promote smoother transitions and reduces conflict later.
Another key point the article makes is that, as responsibility shifts, the next generation is changing their families’ investment priorities. Traditional assets like bonds, stocks, and real estate are still important to them, but heirs are shifting their attention to values-based investing. They want to invest in organizations and funds intended to make social or environmental impacts.
We appreciate this article’s discussion of how the next generation is reshaping wealth transfer, especially as it pertains to their shift in investment priorities. If your family is looking for investment opportunities that align with sustainability and social outcomes, reach out to your advisor to discuss values-based investing options. At BlueRock Wealth Management, we believe it is important to take the time to understand what matters most to you and tailor your financial plan to your values.