Faith & Finance - The Great Wealth Transfer: Are the Next Generations Ready?

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 hea