This shift will create winners and losers and potentially lead to greater inequality. Those with fewer children will have their estates divided into fewer, but bigger pieces. Those with more children will see their estates divided into smaller pieces, while those whose parents do not have property will be left out entirely. Inflation and other economic pressures will increase the demand on those estates from children of the deceased and increase the chance of bitter litigation. What does this mean for you?
For Boomers: An Estate Plan
If you are of the boomer generation and own real estate or other assets, it means that you, luckily, will have assets to pass on to your loved ones. However, it becomes all the more important to make sure that your estate plan is designed to avoid litigation. The unfortunate reality is that the more property you have, the more reason your children, spouse or other family members have to fight, especially if your wealth transfer is accompanied by greater inequality, rising house prices, and inflation. For some people, being financially squeezed or unable to get into the property market produces a sense of aggrievement that can justify a lawsuit that they otherwise would never have considered. That lawsuit can tear families apart and drain your estate, sending your funds to lawyers rather than your loved ones.
Though there is never a risk free approach to estate planning, a well designed estate plan can reduce the chances of litigation. This is particularly the case if you are planning on an unequal distribution or if you need to make special provisions for children who have drug or alcohol problems and may not be trusted to spend a bequest wisely.
For Their Children: Difficult, But Necessary Conversations
For children of the boomer generation, the same concern – that of avoiding litigation – can also be pressing. Though you should never push your parents into a certain disposition (and this could be seen as undue influence which could invalidate a will), it can be very important to make certain that they do have a plan and have made the necessary legal arrangements.
Expert Advice Is Crucial
For everyone involved, consulting with experienced estate planning attorneys, financial advisors, and tax professionals can be crucial in creating a well-structured estate plan. Tailored strategies can help minimize taxes and ensure a smooth transfer of assets.
The social consequences of the great wealth transfer may be far reaching, but those consequences are beyond the influence of most people. What you do have influence over is your own assets and your family. It is important to use that influence to make sure they are protected as much as possible from the inequality that may follow.
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Disclaimer: This blog post is for informational purposes only and should not be construed as financial or legal advice. Consult with qualified professionals to create a personalized estate plan suitable for your specific circumstances.
