This is the largest transfer of wealth in history and we NEED to talk about this.
Before 2026, over $1 trillion worth of assets will pass to Gen-X and Millenials through estates. We have heard where there is a will there may be a way, but without a will, the government decides what happens to everything we leave behind once we pass. It can take YEARS to sort through and distribute an estate to the recipients and nobody will receive a dime until the executor files estate taxes and sorts through what's left behind.
So what happens next?
After years of student debt, unstable careers, and maybe a couple of mortgage payments under our belt, what do we do with $1 trillion? We could channel the Barenaked Ladies and create "If I Had a Trillion Dollars", circa 2022 inflation.
There is a shocking amount of silence on the subject because it is hard to talk about money, but it is essential to communicate and set expectations. Those who hold the wealth can share the legacy they hope to leave behind. Your partner needs to know where to find important documents and who to contact if anyone has a health scare. Your dependents may not be mature enough to know the details, but their parents and potential guardians should understand their legal responsibilities and ensure it's legally binding so the courts follow your instructions to the letter.
With inflation and complex family dynamics, the value of estates has increased and we are seeing more estates contested in court. When there are multiple marriages or unequal distribution among kids, things can get gruesome. Many of us would like to leave behind something positive; our friendships, our generosity, or maybe the family cottage. You have every right to do what you want with your estate, but you can save relationships long after you are gone by communicating your plans. You can leave the message on the executor's shoulders and let the pieces fall where they may, but that will be the last memory you leave. Are you planning to leave everything to your long-term partner because your adult children have the means to support themselves? Do you have a godchild you intend to support through their education? Who will take in your beloved pet? These are hard decisions to make, and even more difficult a conversation to start but vulnerable transparency allows your loved ones to understand and support your wishes.
Finally, it allows your heirs the gift of preparation. You can fulfill your plans while still alive to see the positive impact your support has on their lives, and they will not be paying estate tax on the gift. However, if you know you cannot financially support your long-term partner and leave the house to your kids and their growing family, let them know. Nobody is entitled to anything, but we make assumptions. Now, assumptions make an ass of us all but try to prevent familial disputes.