The amounts are staggering. Over the next 20 years or so, U.S. households are expected to pass an estimated $124 trillion in financial assets to heirs and other beneficiaries, according to Cerulli Associates, a financial services research firm. That includes some $85 trillion going to the Gen X and millennial offspring of boomer and Silent Generation parents, with many trillions more headed to surviving spouses and charity.
Experts are calling it the greatest wealth transfer in history, and the drumbeat heralding its arrival grows louder every day.
To explore how American families are navigating this inheritance wave and offer smart advice to help them meet the challenge, Kiplinger commissioned an exclusive, national survey of more than 5,000 older parents and adult children, conducted by the research firm Morning Consult.
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What we discovered is a mix of big hopes and deep uncertainty as the older generation prepares to pass down the assets they’ve built over a lifetime, the younger generation stands poised to receive them and concerns grow on both sides that outside factors could erode that wealth before it changes hands.
The results also make clear there is a big gap in expectations and knowledge between older and younger family members about the money and property at stake — in part because both sides are deeply reluctant to talk to each other about it. Among the survey’s key takeaways:
- Nearly half of older parents expect to leave their kids a meaningful inheritance, but the majority of adult children don’t think they’re getting anything or aren’t sure what might be left for them.
- The amounts involved for most families are not the life-changing windfalls recent headlines suggest but still have the potential for serious impact, from enabling the younger generation to buy a home to helping put their own kids through college.
- Many parents worry that a shaky economy and their own healthcare costs will upend their plans to pass down wealth — even as the children, facing big expenses of their own, wish their elders wouldn’t wait so long to send money their way.
- Plans for gifting and inheritances live mostly in the dark because parents and kids would rather talk to each other about almost anything else — only sex and dating are more awkward topics.
- As a result, uncertainty casts a cloud over the inheritance process and keeps many families from taking the steps needed to make the most of these assets — moves that could also help parents and adult children forge an even closer bond.
“People are grappling with being asked to make important decisions that will impact their wealth and the assets they want to pass to future generations without having perfect information,” says Valerie Galinskaya, managing director and head of the Merrill Center for Family Wealth.
“The individuals and families I see excel and do this most effectively don’t wait for uncertainty to disappear. They build their plans and then adapt as life unfolds.”
Here is what you need to know to ensure that you and the people you love plan for inheritance in a way that not only creates a smooth and effective transfer of wealth but also helps bring your family closer in the process.
The Great Wealth Transfer won’t be great for everyone
Lest anyone feel bad that the assets parents intend to leave to children in their family can’t be counted in eight or more digits, rest assured those megasize amounts that pundits are quoting about the Great Wealth Transfer aren’t all they’re cracked up to be.
More than half of the expected inheritances coming down the pike over the next two decades will be concentrated among the richest 2% of U.S. households, Cerulli estimates, leaving a lot less to be divided among everyone else.
How much less? About one-fourth of the parents who expect to leave an inheritance to their children estimate their estate will be worth less than $100,000, and about half put the total at less than $500,000, according to the Kiplinger–Morning Consult survey.
Just over one in 10 valued their estate at $1 million or more. Homes made up the greatest share of the wealth to be passed down, followed by life insurance, liquid savings and investments.
The numbers get whittled down even further when you consider that in many families these assets will be divided among more than one child. Roughly one in four parents thought each of their children would inherit less than $50,000 from them, with 44% estimating the amount per child would be less than $250,000.
Bequests in seven-figure territory were rare, cited by just 5% of the parents who expect to leave an inheritance. These findings are largely in keeping with Federal Reserve data, which shows that about half of heirs receive less than $50,000 and 30% of inheritances range from $50,000 to $249,000.
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“That big, huge $124 trillion number is irrelevant to the vast majority of people — but it’s not that there’s nothing coming, either,” says Teresa Ghilarducci, professor of economics at The New School for Social Research, who puts the number of adult children who can expect an inheritance at about 30 million.
That’s a lot of potential heirs, but relatively few of them know what to expect. While nearly half of parents 55 and older expect to leave a meaningful inheritance for their children, only about one-fourth of adults ages 25 to 60 with at least one living parent think they’ll receive one, the Kiplinger–Morning Consult study found.
Driving the disconnect: Relatively few families are talking about inheritance. Roughly two in five have never discussed the older generation’s plans for passing along their assets, the survey reveals. And among those who have talked, it’s mostly in generalities, such as whether the parents have a will or who will inherit something, rather than specifics, with details about the assets parents have, their value, or Mom and Dad’s wishes regarding them.
“When families do not talk, everyone makes up a different story,” Ghilarducci says. “That’s when trouble starts.”
“Parents may think they don’t want to burden a child by talking about their death,” says certified financial planner Douglas Boneparth, founder and president of Bone Fide Wealth, a New York City firm that specializes in advice for millennials.
When families do not talk, everyone makes up a different story.
Teresa Ghilarducci
“But not communicating a plan or conveying your wishes to the very person or people who ultimately will be responsible for settling your estate and dealing with your affairs will leave them in the dark and scrambling to figure things out while they’re grieving over the loss of a loved one. It’s an absolute kick in the pants and burdens them more than you could have imagined.”
Lack of knowledge can also prevent the younger generation from making informed choices about their lives, financial experts say. That’s especially true if the parents intend to gift money during their lifetime — say, to help with the down payment on a home or a grandchild’s college education.
“Counting on nothing may seem like the safest approach for adult children, and the easiest emotionally,” says adviser Stephanie McCullough, founder and CEO of Sofia Financial in Berwyn, Pa.
“But if knowing that your parents plan to leave you some money might help you breathe a little easier financially now or do a little more for your own kids, it would be good to have some sense of it.”
Uncertainty prevails — and paralyzes estate planning
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There are plenty of reasons why many families shy away from conversations about money generally and inheritances specifically.
For starters, no one likes to talk about their own mortality or think about their parents dying. Or about the possibility that illness or disability might drain the older generation’s savings.
Then, too, many boomers and members of the Silent Generation grew up in homes where talking about money was considered impolite or taboo. (Our survey found that families would prefer to talk about almost anything else — politics, mental health, you name it — than inheritances. Only sex was a more awkward topic.) And, especially at greater levels of wealth, parents may worry that learning of an inheritance could be de-motivating for their children.
Adult kids also don’t want to raise the subject and risk coming across to Mom and Dad as grasping. “Bringing up a parent’s finances can feel like you’re being greedy or morbid,” Boneparth says. “Millennials want to know but feel like they shouldn’t have to ask.”
Yet the top reason families stay silent, the Kiplinger–Morning Consult survey shows, is uncertainty. More than one-third of parents who haven’t discussed inheritance plans with their adult children say there are too many unknowns about how long they’ll live or how much money they’ll have left.
Overall, the top worries among parents about the inheritance they’ve earmarked for their kids are that, given inflation and other economic pressures, they might not have much left to give and that long-term care or other health costs might deplete their estate. And that was true even at higher levels of income and wealth.
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Another source of uncertainty for many parents is whether and how long they may need to help their kids financially now, given sometimes shaky career paths, high housing costs and, for some, hefty student loans, says David Chubak, head of wealth management and field management at Edward Jones.
The Kiplinger–Morning Consult study confirms that lots of parents are providing that support: More than four in five say they have given their adult kids financial assistance, from helping with expenses or debt to regular gifting.
“The reality is we live in an age of financial uncertainty and anxiety like no other,” Chubak says.
Bundle all of that uncertainty together and it can become paralyzing, stopping parents from crafting an estate plan or talking about any plans that have been made, says Joshua Morris, vice president of thought leadership and research insights at the Fidelity Center for Family Engagement.
Parents in the Kiplinger survey who were uncertain about the value of their estate, for instance, were half as likely to have a will as parents who were confident about leaving an inheritance, and even fewer had discussed estate-planning issues with their kids.
“The senior generation often feel they need everything completely buttoned up before they say anything to their children, so feeling uncertain about one or two things regarding estate planning shuts down dialogue about everything,” Morris says.
“And if you’re not having dialogue, that compounds the uncertainty both generations feel, because without conversation, there’s no flow of information or talking about concerns and wishes.”
What the “kids” really need to know about inheritance
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When it comes to inheritances, parents are usually most reluctant to share specific numbers, such as how much money they have saved or expect to leave to each child, financial advisers say.
“Mom and Dad worry if they tell the kids they have, say, a million dollars, the kids will think they’re rich — the gifts should be bigger at Christmas, they should be doing more for the grandkids, and why aren’t they helping me more when I’m struggling to pay my rent?” says Kurt Supe, a certified public accountant and retirement planner at Creative Financial Group in Indianapolis and CFD Investments.
“Meanwhile, the parents are thinking, We don’t know if we have enough to last our lives, and a long-term-care event could wipe out half of what we’ve got.”
If you’d prefer to keep the amounts to yourself, or you just don’t know what they’ll be, that’s fine, advisers say. And if you choose to disclose, keep it to broad ranges and possibilities, because circumstances can change.
More important than the numbers, though, is sharing practical details, such as whether you have a will and, if so, where you’ve stored it, as well as insight into the reasons for key decisions, such as who your executor will be.
“A lot of times people think about disclosure as a light switch — you’re either on or off,” says Galinskaya at the Merrill Center for Family Wealth. “We prefer a dimmer-switch approach.”
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New research from the Fidelity Center for Family Engagement suggests what younger family members most want to know are details that will bring them peace of mind, instead of anxiously wondering what to expect. While the definition of peace of mind differs from individual to individual, and from family to family, common themes pop up.
For instance, a separate Fidelity study found that 76% of the younger generation want to know whether they are named as beneficiaries — something that applies to retirement accounts and life insurance policies as well as being named in a will or trust — but only 35% of baby boomers have shared this information.
A Merrill report identified clarity around expectations as the top concern of younger family members, including whether parents have specific wishes for how any money they inherit should be used. Adult children with a special-needs sibling might be concerned about whether their parents have made provisions for care when they’re no longer around to provide it.
The key is to identify the issues that might cause confusion or anxiety in your particular family circumstances. And if younger family members approach the subject respectfully, they don’t have to wait for parents to initiate the talk.
Says Boneparth, “The best thing a millennial child can do is give their parents a reason to have a conversation about their estate planning that has nothing to do with money. It’s asking about their wishes, their values and their worries.”
One exception to the suggestion that parents can stay tight-lipped about dollar figures is if you intend to provide financial gifts during your lifetime, because that knowledge might affect the decisions and choices your children make.
“Let your adult children know whether they can expect financial help from you at key moments in their life when a lump sum would really help, such as when they want to buy a house, or when they graduate from college, get married or have a child,” says Ghilarducci. “Be frank and up front about what you have budgeted.”
How families can set up for estate transfer success
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A smooth transfer of wealth requires a clear plan that lays out who your heirs will be and how you want your assets divided among them. It should also appoint individuals you trust to settle your affairs, with legal documents in place to ensure your wishes are upheld. Few families, however, have such a plan in place.
“Most people take the ostrich approach: I’m going to stick my head in the sand and hope I never have to deal with this,” Supe says.
In fact, only four in 10 parents in the Kiplinger–Morning Consult survey say they have a will, just over one-third have designated beneficiaries on retirement accounts or life insurance policies, and a scant 14% have written a letter of instruction outlining their wishes.
Wealthier families are far more likely to have the legal paperwork drawn up, but large swaths of them still go without. About one-third of parents with estates worth more than $500,000, for instance, don’t have a will, and nearly half haven’t documented what they want to happen to their personal possessions.
“A will is not just for rich people,” Ghilarducci says. “Even a modest estate can include a house, retirement accounts, a car and personal property. Somebody has to sort all that out. Parents usually need a will, a financial power of attorney, a healthcare directive and updated beneficiary forms. A simple letter explaining where everything is can save the family a lot of grief.”
Once the documents are drawn up, you’ll need to communicate that information to your children and other loved ones. Let them know where the papers are stored, whether you place them in a digital file, a physical binder or both.
And it’s not a one-and-done exercise; you’ll want to revisit and update, as needed, every few years and after major life milestones.
“The plans that worked for you in your fifties may need to be adapted in your sixties, as well as once you retire, when your children get married or you have grandchildren, and then again in your seventies and eighties,” says CFP Marguerita Cheng, CEO of Blue Ocean Global Wealth in Gaithersburg, Md.
The biggest mistake parents can make is passing down money without communicating the family values that drive your thinking.
Brad Klontz
You will also need to consider how taxes may impact a planned inheritance — an issue that causes a lot of confusion for both generations, the Kiplinger survey shows. None but the ultra-wealthy will owe federal taxes, with the amount exempt from estate taxes now at $15 million for individuals and $30 million for couples.
However, about a dozen states have estate taxes of their own, including Oregon (exemption: $1 million), Rhode Island ($1,838,056) and Massachusetts ($2 million). If you live in one of those states and calculate your net worth in seven figures, you’ll want to consult a financial adviser about ways to minimize the impact.
A more pressing issue for most families: If you plan to leave money in a traditional IRA or 401(k) to your children, they could be in for a big tax hit. Under a recent rule change, heirs other than a spouse now typically have to withdraw all the money in these accounts by the end of the 10th year after the original IRA owner’s death rather than stretching withdrawals over their life expectancy, and they’ll pay taxes on the money at their ordinary income tax rates.
A possible double whammy: Those withdrawals could push heirs into a higher tax bracket.
“The biggest threat to eroding the value of an inheritance for adult children who are beneficiaries of traditional retirement plans is the possible tax hit,” Supe says.
What to do? Supe suggests you might convert all or a portion of a traditional IRA or 401(k) to a Roth account over time. You’ll pay income tax on the amount you convert, but your children will then be able to withdraw the money tax-free when they inherit — a strategy that makes sense if you are in a lower tax bracket than your kids, as is the case for many retirees with offspring who are in their peak earning years.
You’ll want to make sure, though, that your withdrawals from the traditional plan don’t push you into a higher income tax bracket or income tier for Medicare, which could cause your premiums to increase sharply.
McCullough says some people are reluctant to do the conversion and pay taxes up front because they’ve been taught to defer, defer, defer, and it’s hard to break that mind-set. She says, “Think of the taxes you’ll pay as part of what you’re gifting to your children, a way to maximize the value of what they inherit from you.”
Issues that can topple your inheritance plan
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One of the thorniest challenges that many families face in transferring wealth to younger generations: The great now-versus-later debate.
Nearly twice as many adult children in the Kiplinger–Morning Consult study say they’d prefer their parents help them financially now, when their biggest life expenses are upon them, as those who say they favor getting a bigger inheritance later.
With older generations now living longer, healthier lives, it could be a long wait — 10 to 20 years or more — and millennials and Gen Xers are buying homes, raising children and paying for college now. Indeed, Fed data shows that inheritances in middle-class and affluent families most commonly go to recipients in their early to mid-sixties, when those heirs are often closing in on retirement themselves.
Many parents, however, aren’t on board — with good reason. The largest segment of parents in the survey (42%) intend to wait to provide an inheritance, most commonly because they want to be sure they have enough money to support themselves throughout their lifetime. Just 14% said they would rather give more now to see their children benefit from the money.
Then, too, a lot of parents are already providing a generous helping hand. Nearly half of the parents in the Kiplinger–Morning Consult survey report they have provided financial help to adult children on an as-needed basis, nearly one-third have helped with other expenses and one-fourth have assisted with major life events.
Similarly, recent Visa research shows that one in four millennial homeowners received help with the down payment from their parents, and about the same number said they couldn’t have purchased the house without it.
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How can families navigate the competing, compelling needs of both generations? “It’s a balancing act,” says Cheng. “While parents don’t want to give away too much during their lifetime, the flip side is that if you wait until you’re gone, did your money really have the greatest impact it could have?”
Cheng suggests putting parameters around the financial help you offer now. For instance, you might provide money for a specific purpose rather than ongoing, unrestricted gifts — say, supplying the money for a down payment, paying for a grandchild’s music lessons or sleepaway camp, or contributing to a 529 college-savings plan.
If you do choose to gift annually — in 2026, you can give up to $19,000 per recipient, without filing IRS paperwork; couples can give up to $38,000 — make it clear that you’ll revisit your strategy every year and that you may not always be able to give the amount you’ve been giving, or be able to give at all, if your financial circumstances or needs change.
The key, says Galinskaya, is to avoid binary thinking. In other words, do not consider gifting to be an all-or-nothing proposition and that you’ll have to do it forever once you start, or that you’ll always have to give the same amount to each of your children. “There’s a spectrum of options,” she says.
For parents with more than one child, the question of fairness is perhaps toughest of all. Typically, parents are eager to avoid discord among siblings. That’s likely why the vast majority of them in the Kiplinger–Morning Consult survey — 71% in all —said they intend to divide their assets equally among their children.
If you wait until you’re gone, did your money really have the greatest impact it could have?
Marguerita Cheng
Sons and daughters, however, are less convinced that’s the best approach. Although half of the adult children in the survey preferred an even split with siblings, one in five thought inheritances should be based on factors such as how much each of them had helped their parents or gotten financial help in the past (11%) or each one’s financial need (9%).
Many also anticipated trouble ahead, with one-third of the adult children respondents expecting an inheritance to create conflict with their siblings. And experts agree: The risk is high.
“Adult children will often view inheritances through the lens of unresolved issues and patterns in the family, especially if the way assets are divided between siblings comes as a surprise to them,” says financial psychologist Brad Klontz, coauthor of Psychology of Financial Planning. “Someone feels hurt and thinks, Oh, Mom must have loved you more than me, or You influenced our parents behind my back.”
For many parents, it’s their worst nightmare.
The best way to avoid that outcome is for parents to talk with their children in advance about how assets will be divided and, critically, why. “Err on the side of equality unless there’s a good reason not to — and sometimes there is a good reason not to. Maybe one child works in the family business, one puts in more effort, another has special needs,” says Galinskaya.
“A good outcome is less about whether dividing things equally or fairly is best and more about how you communicate your actions and explain the intent behind them.”
Leaving a legacy beyond money
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Experts say that’s generally true of inheritance planning. “The biggest mistake parents can make is passing down money without communicating the family values that drive your thinking,” says Klontz. “That could be and should be the most valuable part of your legacy.”
Make sure the conversations you have as a family about transferring wealth are two-sided and collaborative, not just parents delivering news and rendering decisions from on high, advisers say. “It’s Mom and Dad’s money, and they get to choose what to do with it. But children should have a voice, if not a vote, in the process,” Galinskaya says.
Rather than a single big talk, think in terms of having a series of smaller chats over a long period. “One misconception about the Great Wealth Transfer is that it is a single point in time, the reading of the will, like the movie scene where everyone is in the room and you find out where all the money goes,” says Joshua Morris of Fidelity.
“We like to reframe the transfer as a transition that’s happening over decades as parents move into and through retirement — planning, gifting and adapting plans along the way.”
Fidelity uses the skiing concept of bunny slopes and black diamond trails to suggest how the conversations should move from initially low-stakes, emotionally easy topics — say, what to do with family heirlooms or where the will and other documents are stored — to more challenging subjects around inheritance and estate planning involving how assets will be divided and their value. (For more about the best ways to approach these conversations, see our article on talking to your adult kids about inheritance.)
Each conversation is an opportunity for parents and children to share feelings as well as facts, and for parents in particular to provide insight about what they view as the purpose behind the assets they’ve accumulated, big or small, and their wishes for the next generation.
“Whatever number is attached to the wealth you’ve built, it is the story of your career, the story of your life, and there’s a vulnerability and emotionality attached to sharing your story that brings families closer together,” Morris says.
Fidelity’s latest research bears that out. It found that parents who regularly share planning details and keep family members informed are more likely to report peace of mind and confidence about the future than those who don’t. Adult children will probably feel a lot better too.
Says Morris, “That’s a payoff for families that goes far beyond money.”
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
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