What is considered the greatest transfer of wealth in history is happening today—one family at a time, from one generation to the next. According to a study by Edward Jones, in collaboration with NEXT
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According to Cerulli, the Great Wealth Transfer is the forecasted hand-off of trillions of dollars from the older Silent Generation and aging Baby Boomers to their young Generation-X, Millennial, and Generation-Z adult children and grandchildren over the next 20 years. Cerulli pegs the transfer to come mostly from Boomers totaling nearly $84 trillion, with about $72 trillion going to heirs and $12 trillion to charities. That’s a lot of money. Well, it may not all be money. The Great Wealth Transfer will include cash, equities, real estate and other forms of wealth, as well as, for many, memories. Adult children assuming an eventual transition of wealth may be feeling uncertainty on what, how, and in what form the exchange may take place.
“Talking with loved ones and planning ahead are the most important parts of the wealth transfer process,” says Lena Haas, Principal, Wealth Management Advice and Solutions at Edward Jones. “Having a transparent conversation with family members and developing a clear plan can make all the difference between the legacy of love and care, and the legacy of potential hurt and confusion.”
The Great Wealth Transfer is happening now but not entirely in the way you think it might happen. Yes, there will be wealth in the traditional sense, but many aging Boomers have other ideas, including shared family travel and experiences they and their families can enjoy today, together.
Giving While Living
While not discussed very often or loudly, the Great Wealth Transfer is about the passing of more than money; it is as much about the passing away of grandparents and parents. Many older adults are not waiting for their existential end to give. Instead, many are choosing a different strategy outside the traditional hand-offs of wealth memorialized in wills and trusts, they are choosing giving while living.
Giving while living is not a new idea. Without thinking about it, parents routinely redirect savings that might have gone to retirement and family wealth to their children’s college funds. Later, those same parents may pay for weddings. Parents and grandparents may help purchase a new home for a young couple. However, a trend that has gained significant momentum is the shared gift of travel.
Multigenerational Travel
Travel has exploded since the end of the pandemic. Call it revenge travel, but every generation is eager to hit the roads and runways. One key trend in the travel industry is multigenerational travel, where typically older adults organize, finance, share experiences, and make memories with their adult children and grandchildren.
According to Jim Staples, president of Orbridge, a destination travel specialty firm, “One of the biggest trends we are seeing is that generational travel has increased substantially. Boomers are bringing big and small family groups more on experiences.”
The 2023 U.S. Family Travel Association Survey of 3,300 parents and grandparents indicates that 50% of those surveyed have taken a multigenerational trip in the last three years. Moreover, more than half (54%), particularly grandparents, report being the primary planner and organizer of the trip. A full 50% of respondents indicate they pay for the trips with children and grandchildren, while another 48% say they share the costs with family, with only 1% reporting that their children pay for the trip.
For aging Boomers, travel is not about the trip but about using wealth today to give a gift of shared experiences and making memories together as a family. As Orbridge’s Staples notes, “We hear from our clients over and over that the parents or grandparents want to experience this (travel) alongside their family. People view travel as a way to connect, create and share memories, and bond. As those with the financial resources age, they want this bonding time with their children and grandchildren…experiencing something brand new at their older age with the people they love is irreplaceable.”
It may not just be adult children and grandchildren on mom’s and dad’s travel manifest. Staples notes that, “Momentum can build in these family departures where once a portion of the family commits to a departure, sometimes extended family members, cousins, nieces, etc., then choose to join the departure as well, so as not to miss out on making memories.”
But hold on, before Millennial and Gen-Z adult children pack their bags to hit the road with mom and dad, they might have to wait their turn. According to AARP, “skip-gen” travel may be on the rise. In a 2019 survey, 61% of grandparents reported being interested in vacationing with grandchildren alone and skipping the middle generation.
The Great Wealth Transfer will undoubtedly live up to its name in the coming decades; it will be a great volume of wealth. However, the popular imagery of large checks, homes, or portfolios being the only wealth transferred is not incorrect as much as it is incomplete. Giving while living is a gift that aging parents and grandparents may provide to their families but is also something that they can enjoy while here. The shared family experiences, memories, heartfelt conversations, hugs, and inevitable selfies often accompanying a family trip are real wealth that cannot be quantified.