Even though parts of the great wealth transfer are already happening, there is sometimes uncertainty about whether heirs are ready.
About two-thirds of the advisors who are involved in wealth transfer planning are wealth management professionals or trust and estate attorneys, with 2.5 advisors involved in the process on average, according to a new report. The great wealth transfer is expected to pass a historic $124 trillion in assets by 2048 to younger investors, according to an estimate Cerulli Associates reported in December 2024.
More than half of respondents use tax advisors or CPAs, while 19% use a family office manager or CEO, and 19% use a business succession specialist, according to
"Family dynamics, administrative requirements, long-term objectives, sophisticated tax strategies and potential regulatory changes all contribute to the complexity of the process," BNY Wealth wrote in the report.
Wealth transfer planning includes assessing when heirs will be ready to gain access. According to the survey:
- 46% have minimum age thresholds
- 43% will require a review or sign-off from a trustee or advisor
- 33% will require completion of education or training
"Feeling confident in an heir's ability to manage future responsibilities often starts with trust in their judgment and decision-making," according to the report. "Many families also see an important role for trusted financial professionals, with more than half of those who feel confident in their heirs saying that professional guidance helps provide added structure and perspective over time."
When asked why they think heirs are ready to manage wealth:
- 66% of said it is because "they
manage their own finances responsibly " - 60% said it is because they have discussed financial expectations with their heirs,\
- 53% said it is because heirs "demonstrate strong financial literacy"
- 51% said they believe heirs are prepared because they are supported by financial professionals
- 38% said heirs are prepared because they have engaged in formal money management education
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To close the gap in conversations, BNY Wealth recommended starting wealth transfer conversations before the need arises, establishing a formal governance structure for the family, prioritizing the education of the next generation,
As for the
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The great wealth transfer that the industry has been expecting has turned out to be slower and more complicated than anticipated because of longer lifespans, particularly among ultrahigh net worth individuals who have better nutrition and health care, BNY Wealth wrote. Heirs often inherit "through phased transfers involving gifts, trusts, family governance and partial business transitions, while families face longer periods of decision-making around succession, healthcare, longevity risk and intergenerational expectations," according to the report.
Wealth owners intend to transfer 17% of their wealth, on average, over the next five years, 18% over the next six to 10 years, 21% over the next 11 to 20 years and another 21% in more than 20 years, the survey found. They plan to transfer 55% of their assets at death or afterward.
Illiquid assets, such as real estate or privately held businesses, might delay wealth transfers, and facilitating transfers might require thoughtfully preparing for a sale at an appropriate time.
