The Puritan poet Anne Bradstreet once wrote, “Wisdom without an inheritance is better than an inheritance without wisdom.”
As Baby Boomers age, it’s estimated they’ll leave a tidal wave of wealth to their heirs, perhaps as much as $68 trillion by 2030. But is the next generation ready for that wealth?
Anne Bradstreet’s wisdom likely stemmed from Ecclesiastes 7:11-12, highlighting wisdom's value alongside an inheritance. This biblical perspective underscores the importance of preparing heirs with wealth and the wisdom to manage it.
Research indicates that while Boomers are poised to make the greatest wealth transfer in history, they may need to prepare their heirs adequately. A study by Edward Jones revealed that while 48% of Americans plan to leave an inheritance, only 27% have discussed wealth transfer with their heirs, leaving many millennials and Gen Zers unprepared.
Longer lifespans mean Boomers might consume more of their assets due to rising healthcare costs, potentially reducing what’s available for inheritance. This reality necessitates early and ongoing conversations about wealth transfer to set realistic expectations.
The Edward Jones study identified four ways Boomers might transfer wealth:
Boomers must start discussing their plans with their adult children to ensure a smooth wealth transfer. Passing on financial wisdom is crucial, preparing heirs to be faithful stewards. Family conferences, possibly facilitated by a Certified Kingdom Advisor®, can be an effective way to start these conversations and ensure ongoing communication as circumstances change.
Preparing the next generation to manage inherited wealth involves more than just transferring assets; it requires imparting the wisdom to steward those resources responsibly. By fostering open communication and providing financial education, Boomers can help their heirs honor God and manage their inheritance wisely. Teaching them that everything belongs to God and instilling values of stewardship, provision, and generosity is the greatest inheritance they can leave.
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