While the intergenerational Great Wealth Transfer conjures attractive images of a financial bonanza cascading down through the generations, the reality is that it could be complicated, messy and potentially damaging for family relationships.
The Great Wealth Transfer is widely predicted to see trillions in assets pass from the Silent Generation and Baby Boomers to the younger Gen X and Millennial age groups over time.
In the USA, it is estimated that over $120 trillion in assets is involved between now and 2048[1], as the older generations pass on the wealth they have accumulated over their long and frequently prosperous lives. In the UK, estimates for the wealth involved are between £5.5 trillion and £7 trillion[2], with current annual inheritance flows of £100 billion increasing over time.
Differing family dynamics drive complexity
A UK chartered financial planner said the older generations here usually fall into three categories when it comes to passing assets to the next generation. The first group will do almost anything to avoid paying inheritance taxes, to the extent of giving away all of their assets before their passing. The second group, at the opposite extreme, think their descendants should feel themselves lucky to receive anything at all, while a third group is ready in principle to pass on their wealth but is concerned about how it could disincentivise the next generation. “Their attitude is ‘I’ve worked hard for what I have, if my children inherit considerable wealth, will they work as hard in their lives?’”, commented the financial planner.
For intergenerational wealth transfers, the financial planner explained that it is highly desirable for the older generation to discuss their plans with their dependents while they can. She explained that a common issue is that those with assets to pass on might not, for entirely laudable reasons, want to distribute it equally among their children, some of whom might find this hard to accept.
For example, parents might choose to give more to a son or daughter in more modest circumstances than their high-flying sibling. Or they might want to leave more to their children with grandchildren, to help give them a good start in life. But family members may see things differently and, without careful communication and explanation, this could become a source of rancour and division. At the same time, it is important that older people do not feel coerced into changing their plans against their will, as it were.
One danger here is that a culture of silence develops over how family wealth is to be distributed, if it becomes too painful to discuss. This can lead to even greater problems where family businesses are involved, which could even have potential economic repercussions.
This is more likely to be the case in certain regions, such as the Middle East, where family businesses account for large parts of the economy and the first intergenerational wealth transfers are starting to happen. A recent example of this is the Dubai government’s involvement in a family dispute at the $16bn Majid Al Futtaim business conglomerate, after the death of its eponymous founder[3]. In cases such as this, the problems of wealth transfer are magnified by the scale of the family business and the size of the extended family, but the lessons on the importance of succession planning and family governance for wealthy families everywhere are clear.
The value of advice across generations
Another emerging issue around the Great Wealth Transfer is that the Baby Boomer generation, who have gone through life reshaping social norms to their preference, often want to pass on assets while they are still alive.
One reason for this is that the older generation may want to see their children get the benefits and enjoyment of an inheritance before they pass on. And giving earlier can have a greater impact on the lives of their children and grandchildren.
But increasing life expectancy and the potential for higher expenses in later life, such as care home costs, highlight the need for older generations to get professional guidance, enabling them to give generously while ensuring their long-term financial security.
CoreData’s research in this area has found that the next generation may have different views on financial advice to their parents, with younger age groups preferring robo-advice and digital tools over face-to-face advice from an advisor associated with their parents.
Nonetheless, the UK financial planner said wealth transfers and inheritances can lead to new clients gained as family meetings lead younger family members to appreciate the value of tax planning and the broader benefits of advice.
Governments continue to move the goalposts
A final important point about the Great Wealth Transfer is that governments will find interventions in various forms impossible to resist.
The UK government has already declared its intention to subject unused pension assets to inheritance tax (IHT) from 2027, as it seeks to balance the books.
The policy has already received significant criticism, but given the demographics of an ageing population, increased spending on public services and the size of the asset base in question, this is a nettle that will eventually have to be grasped in one way or another.
Another twist on this was seen in Germany recently, when the German Institute of Economic Research, an independent think tank, proposed a ‘Boomer solidarity tax’ on the pensions of higher-earning retired people to help the country cope with the demographic pressures of the post-war generation retiring. In 10 years’ time, Germany will have 42 pensioners for every 100 workers according to estimates from the national statistics service. Under the proposed measures, Germans aged over 65 would pay a 10% levy on retirement income above an allowance of €902 a month.[4]
In both countries and elsewhere, heated debates will continue over the appropriate taxation of Baby Boomers’ assets, and the fairest mechanisms to fund their pension and healthcare needs. With the Great Wealth Transfer, as with much else, we should remember that life is often not fair and that the goal posts will keep moving.
This heightens the need for both good financial advice and planning for families and individuals, as well as clear and empathetic communication and understanding. Otherwise, for some the Great Wealth Transfer could become a story of frustration and anguish, rather than rewarding intergenerational succession.
Matthew Craig is a senior consultant at CoreData Group, a global specialist financial services research and strategy consultancy. To find out more about our industry insights and research programmes, you can reach him at [email protected]
[1] Cerulli Anticipates $124 Trillion in Wealth will transfer through 2048, press release, December 5, 2024
[2] £7 trillion is changing hands: what the great wealth transfer means for you, Unbiased, May 6, 2025
[3] Dubai ruler steps in over retail empire’s inheritance dispute, Financial Times, February 13th, 2022
[4] German boomers ‘should pay 10% tax on pensions for next generations’, The Times, July 17th, 2025