Without the right estate planning, a lot of the expected inherited money may go to taxes and legal fees instead of heirs hoping for a windfall, states Beck, Lenox & Stolzer Estate Planning and Elder Law, LLC. This is backed up via a recent article from Morningstar, “Looking forward to the great wealth transfer? Expect an $84 trillion mess instead.” So, what is the Great Wealth Transfer?
Most people who could potentially leave assets to their heirs or a charity don’t have an estate plan. They might also spend all their money before they die. The big inheritance predicted by personal finance pundits is more likely to consist of life lessons, personal values, or a collection of salt and pepper shakers than the family home or big chunks of cash.
After COVID, people started taking a last will and testament and estate plan more seriously. So many families lost loved ones unexpectedly and were stunned not only by their loss but also by the complexity and cost of settling estates without estate plans, wills, or trusts. That seems to have faded, which will burden another generation.
Some assets can be passed along through a beneficiary designation, like bank or retirement accounts. However, if you intend to pass the family home or a vacation home to the next generation, you’ll need to plan for it.
At the very least, an estate plan should include a will. To make the transfer of property like a home easier and less costly for heirs, you’ll want to meet with an estate planning attorney and have a trust created.
If you die without estate planning, your heirs must go to court to determine how your estate should be distributed. Most people hire an estate planning attorney to manage this process—the same attorney who could have created an estate plan to avoid the time, stress and cost of not having an estate plan.
As of this writing, the current federal estate tax exemption of $13.99 million per person is still scheduled to expire at the end of 2025. If Congress doesn’t act, it will be cut in half, meaning many more Americans will pay federal and state estate taxes. Whether or not this exemption will be extended is yet unknown. High net-worth families have already taken steps to prepare. However, many are still sitting on the sidelines waiting to see what happens. Waiting may turn out to be an expensive decision.
Families with less wealth may lose their retirement nest eggs because of healthcare spending and increased longevity.
The chances of spending down your assets and leaving nothing behind depend on your estate planning. If you want to leave your children and grandchildren an inheritance, make an appointment with an estate planning attorney to learn how to make this happen. If you have no attorney, you are entitled to a free phone consultation with Attorneys Jayson Lenox or Caroline Daiker Stolzer. Schedule today.
Reference: Morningstar (Feb. 25, 2025) “Looking forward to the great wealth transfer? Expect an $84 trillion mess instead”
