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Baby boomers are set to drop a huge windfall on Gen X and millennials over the next 20 to 30 years.
However, before this deluge of wealth — to the tune of $72 trillion in assets — lands in the hands of the middle-aged generations, there’s another group of Americans in line to inherit the riches first: spouses and partners, principally women.
In this instance, the movement of money to spouses or partners has been dubbed the "horizontal wealth transfer” since the wealth isn’t changing generations — yet. A 2024 Global Wealth Report from UBS revealed that an estimated $9 trillion is going to transfer intra-generationally in the coming years, with the funds moving from one spouse or partner to another.
This means that, by 2030, this horizontal wealth transfer will likely have reshaped wealth management in the country — a landscape that has largely been dominated by men.
Here’s why this is happening — and what it means for the economy.
What does this wealth transfer mean?
For many wealthy baby boom couples, men are the primary decision-makers regarding money matters. McKinsey’s research shows that men make key financial decisions in two-thirds of all affluent households in the United States — while around one-third of financial assets across all households are currently under the control of women. That’s more than $10 trillion.
By 2030, however, their research shows women are estimated to control around three times that amount, or the majority of the $30 trillion baby boomers will collectively own at that time.
McKinsey’s report suggests this massive transfer of wealth to (mostly) women will be of "such magnitude that it approaches the annual GDP of the United States."
If you expect to inherit a substantial sum from your spouse, proper financial planning goes a long way toward managing your wealth and securing your future.
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When women take control of wealth after their partners’ deaths, it will affect the global financial economy. Data shows women are more likely to seek professional financial advice, are less risk tolerant when it comes to investing, and are more likely to give money to groups supporting women.
Estate and taxes
One of the biggest challenges Americans will likely face is navigating the complexities of estate planning.
If you or your family members don’t have a will in place, you might have to pay exorbitant probate fees and other charges. Not to mention, family disputes over inheritances can cause rifts between loved ones, in addition to the financial strain.
Plus, if you inherited under intestacy laws rather than through a will or trust, or if your current will leaves everything to your now-deceased partner, estate planning should also be a top priority after you inherit a windfall.
Also consider that estate taxation laws differ between states, which might be difficult to deal with without having a will or living trust.
LegalZoom is an online platform that can help you avoid these issues, helping you create an estate plan at an affordable price.
On their platform you can create a will and living trusts, grant power of attorney, and provide advanced health care directives. Their simple and cost-effective process means you can bypass the need to find, hire and pay for a lawyer the old-fashioned way.
You can create a basic will for as little as $99 by answering a few quick questions, reviewing and verifying the information in the documents created by LegalZoom, (either by yourself or with a lawyer), and then signing.
Plus, if you are unhappy with LegalZoom’s services, you can request a full refund within the first 60 days.
Creating a careful plan for how to distribute funds among children, grandchildren, and other beneficiaries is essential.
Making the right financial moves will ensure that – if you benefit from the horizontal wealth transfer – you can preserve inheritances until you’re ready to pass along this wealth to the next generation.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
