For years, financial experts have been preparing for The Great Wealth Transfer, a projected $110 trillion in assets passed from Baby Boomers and older generations to their heirs. Wealth managers and financial advisors have looked forward to a wave of potential new clients – but the size of that wave and the timing might be delayed.
Decades of rising markets and business growth have pushed older Americans’ net worth to record highs. Bequeathable wealth – assets that can be passed down to heirs – surged from 256% of GDP in 1997 to 424% in 2021.1 The expectation has often been that Millennials and younger generations are on the verge of receiving an unprecedented wave of inherited wealth over the next two to three decades, one of the largest intergenerational transfers of wealth in history.
But there’s a catch: the money isn’t moving nearly as quickly as many assume. According to recent data, the transfer could be more of a slow drip than a sudden windfall, stretching transfers over decades rather than years.
Why the wealth transfer is taking longer than expected
The evidence suggests that today’s heirs are waiting longer than prior generations to receive inheritances. But this isn’t the result of a single trend. A combination of demographic shifts, spending habits, estate-planning strategies, and economic factors are slowing the pace of wealth transfers and pushing inheritances further into recipients’ later years. Here are the primary drivers behind the delay.
- People are living much longer: This is the biggest cause of the delay. A Baby Boomer who retires at 65 may now live into their late 80s or 90s. Sources indicate that roughly 70% of people turning 65 will need some form of long-term care and 20% will need care for more than five years.2 Medicare does not cover most non-skilled assistance with activities of daily living, which means households often self-fund care. Some retirees intentionally hold onto large portfolios to prepare for costs related to assisted living, in-home caregivers, or medical expenses.
- Spouse receives wealth first: In many cases, wealth passes first to a surviving spouse, delaying the transfer to other generations another several years. It is estimated that $54 trillion will be transferred to spouses before later passing to heirs.3 Spouse-first inheritance is nothing new, but when combined with longer life expectancies it has much larger delaying effects.
- Older Americans are spending more: Previous generations often tried to preserve wealth primarily for their heirs. Many retirees today are more willing to spend their savings on travel, second homes, or hobbies. In addition to spending heavily on personal enjoyment, affluent retirees are offering financial help for children and grandchildren, such as paying for college or down payments on homes instead of leaving one large inheritance. The table below shows how one generation’s wealth will be reduced by varying expenses before it reaches the next generation, resulting in a much smaller inheritance pool.4
- Estate planning is becoming more sophisticated: Trusts and estate plans increasingly distribute wealth over many years, at specific ages, upon achieving milestones, or across multiple generations. Instead of a single inheritance event, wealth may be released gradually.
- Changing strategy for high-net-worth individuals: The wealthiest populations often own businesses that won’t be sold immediately, use trusts that delay distributions, donate substantial amounts to charity, and employ tax-efficient strategies that spread transfers over decades. They may also postpone transfer decisions for non-financial reasons: incomplete planning, uncertainty about heirs’ preparedness, and communication gaps all further the difficulty of deciding not just who inherits but when and how.
- Tax law changes: The One Big Beautiful Bill increased the federal estate and gift tax basic exclusion amount to $15 million for calendar year 2026. That is a large threshold, so for many affluent-but-not-ultra-wealthy households, federal estate tax pressure is lower than many planners expected a year earlier.
While the amount of wealth itself hasn’t disappeared, it is remaining in the hands of older generations much longer than previous models predicted. Plus, with many retirees heavily invested in stocks and appreciating assets, their portfolios continue to grow due to rising stock markets, so their wealth might continue accumulating past retirement. All of these factors are reshaping expectations for heirs and financial professionals alike.
Implications for wealth managers
The delay changes the opportunity for wealth managers more than it eliminates it. Instead of a sudden transfer from Baby Boomers to Millennials, wealth is likely to move later, more gradually, and often first to a surviving spouse. That means wealth managers need to rethink both client retention and next-generation acquisition.
Spouse-first estimates mean the immediate “next client” is often the surviving spouse rather than the adult child. Firms that build capabilities in widowhood planning, family governance, inherited IRA rules, business-succession advisory, and next-generation education are likely to capture more of the eventual transferred assets.
Since the inheritances will increasingly arrive when recipients are in their 60s rather than their 40s or 50s, the advice they need changes. Instead of using inherited wealth primarily for home purchases or accumulating retirement assets, recipients may already be approaching or entering retirement themselves. Retirement income, tax planning, healthcare, charitable giving, estate planning and transferring wealth to their own children become more important.
The delay will give wealth managers more time to build relationships with heirs, potentially a major advantage. Rather than waiting until an inheritance occurs and competing for the assets afterward, advisors can engage children and grandchildren years earlier through family meetings, financial education and estate-planning discussions. The objective should be to make the advisor a relationship of the family, rather than solely a relationship of the wealth creator.
The Great Wealth Transfer may ultimately be remembered not for its size, but for its timing. While headlines focus on the $110 trillion expected to change hands, the more important reality is that much of that wealth will remain with older generations far longer than previous models predicted.
For Gen X, Millennials, advisors, and business owners alike, the lesson is clear: plan for a future in which wealth arrives later, moves more gradually, and demands greater preparation. The transfer is coming, but patience may prove just as valuable as inheritance.
Contributions to this article by: John Orsini, MarshBerry Director
Sources:
2. https://acl.gov/ltc/basic-needs/how-much-care-will-you-need
