Preparing for the Great Wealth Transfer: Strategies for Beneficiaries
Over the next couple of decades, trillions of dollars are expected to change hands as baby boomers pass down their wealth to younger generations. Dubbed the “Great Wealth Transfer,” this shift is one of the largest financial events of our time and it presents both a unique opportunity and a serious responsibility for those on the receiving end.
At Seaside, we’ve walked with families through the emotional and financial realities that come with inheriting wealth. Whether you’re expecting to inherit or it’s already happened, knowing how to handle that transition can make a huge difference in protecting and growing what’s been passed down to you.
1. Pause Before You Make Big Financial Moves
An inheritance can stir up all kinds of emotions: grief, relief, gratitude, even stress. It’s natural to want to “do something” with the money right away, but acting too quickly can lead to decisions you might regret later.
What to Consider: Take time to process the emotional impact of the inheritance before making major financial decisions. Avoid quick purchases or investments, and instead focus on understanding the full picture of what you’ve received.
2. Understand What You’ve Inherited
Not all inherited assets are treated the same. You might receive retirement accounts, investment portfolios, real estate, or even business interests. Each comes with its own tax implications, rules, and timelines.
What to Consider: Work with your team at Seaside and your tax professional to get clarity on the type of assets you’ve inherited. For example, inherited IRAs have required distribution rules and the 10 year rule to consider, while other assets may receive a step-up in basis, which can significantly reduce your tax liability if sold.
The tax strategy around inherited assets can be very complex. Getting it right can be the difference between overpaying in taxes, and saving a lot of money on your tax bill.
3. Create a Game Plan for the Money
Once you’ve had time to reflect and gather details, it’s time to develop a plan. This is where thoughtful decision-making comes in—deciding how the money fits into your life goals, values, and long-term needs.
What to Consider: You might use some of the inheritance to pay off debt, build a stronger emergency fund, invest for the future, or give to causes you care about. Having a written plan helps ensure the money serves you well—not just now, but for decades to come.
4. Be Aware of the Emotional Ties
Inherited money often comes with emotional weight. It may represent a parent’s life work, a grandparent’s sacrifice, or the legacy of someone you loved. That can make decisions feel heavier than normal.
What to Consider: It’s okay to acknowledge those emotions and even integrate them into your financial plan. Maybe you want to honor your loved one by funding education, supporting family, or donating in their name. Just be intentional about how those choices align with your overall goals.
5. Protect What You've Received
Just as important as growing inherited wealth is protecting it. That means evaluating your insurance, estate documents, and potential risks to make sure the money doesn’t disappear due to unforeseen circumstances.
What to Consider: Review your estate plan, update beneficiaries, and explore trusts or other tools that could help protect assets and pass them down efficiently when the time comes.
Wrapping It All Up
The Great Wealth Transfer represents an unprecedented opportunity for many families—but it also comes with responsibility. By approaching inherited wealth with clarity, purpose, and a bit of patience, beneficiaries can carry their loved ones’ legacy forward while building financial security for the future.
This commentary reflects the personal opinions, viewpoints and analyses of the Seaside Wealth Management, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Seaside Wealth Management, Inc. or performance returns of any Seaside Wealth Management, Inc. client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Seaside Wealth Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.