The Great Wealth Transfer - What is it? How does it effect you? | The Powers Playbook Ep. 6

One of the largest wealth shifts in American history is already underway.

In this episode of The Powers Playbook, we break down the concept of The Great Wealth Transfer — the massive transfer of assets expected to move from the Baby Boomer generation to Gen X, Millennials, and Gen Z over the next two decades.

Economists estimate that $80–$100 trillion in wealth will transfer between families during this time, and a huge portion of that wealth is tied directly to real estate.

Understanding how this shift works — and how to prepare for it — could have a major impact on your family's financial future.

In This Episode

• What The Great Wealth Transfer actually means
• Why Baby Boomers own nearly 40% of all U.S. homes
• How real estate will play a major role in generational wealth
• Why millions of homes may be inherited over the next 20 years
• Why 50–70% of inherited homes eventually get sold
• How families can prepare for wealth transfer conversations now
• The importance of estate planning and family trusts
• Why holding onto inherited real estate can build long-term wealth

Why This Matters

For many families, real estate is the largest asset they will ever own.

As properties pass from one generation to the next, the decisions families make about those assets could determine:

• long-term financial stability
 • generational wealth
 • investment opportunities
 • and future real estate ownership

Without proper planning, however, those assets can quickly become complicated due to probate, taxes, or family disputes.

That’s why conversations about estate planning, trusts, and asset protection are more important than ever.

A Key Takeaway

If your family may inherit real estate in the future, start the conversation early.

Understanding how assets will transfer — and having a plan in place — can help families avoid legal complications while protecting the wealth that previous generations worked hard to build.

Questions About Real Estate or Wealth Planning?

If you’re navigating inheritance, family property transfers, or long-term real estate planning, we’re happy to help guide the conversation.

📧 info@powersre.com

About The Powers Playbook

The Powers Playbook explores the connection between family decisions, real estate, and long-term wealth building.

Each episode provides practical insights to help you think strategically about your financial future.

Subscribe for more conversations about real estate, generational wealth, and financial planning.

Transcript

SPEAKER_00 0:00

All right. Hi friends, and welcome back to the Powers Playbook. The play we're running today, we're going to be talking about the great wealth transfer. I don't know if you've heard of that before, but we're going to explain it to you today. We're also going to talk a little bit about if you are transferring wealth, how do you do that? How do you ensure that it transfers properly? And what can that mean for you and your family? I don't know if you can hear it today, but I'm coming in at a little less than 100%. So bear with me. We're going to get through it. There may be a couple of extra sniffles, maybe a cough. But we're here. We're here and we're doing it. I'm going to give you a quote right at the beginning. Done is better than perfect. Whatever you're going through, it does not have to be perfect. It just needs to get done and we'll keep moving forward. So that's our mantra for today. Both my kids have uh been sick recently and they love sharing with dad. So here we are. I'm sure you've been through something like this before. You can you can relate. All right, so back to what I'm talking about, the great wealth transfer. This has been something that's been talked about for a little while, but I wanted to bring it to you just because it's going to be a big thing and it's going to involve a lot of real estate. So what is it? The great wealth trans wealth transfer is something that is going from the baby boomer class down to your uh Gen X, Millennials, Gen Z, um, into those others. And what it basically is, is the baby boomers who are anybody born from 46 to 64, basically, that period of time. So after the war, uh they call it because everybody came home and boom, they had a bunch of kids. So they were they're the baby boomer generation. Now, these are um just for instance, these are my parents were born in those years. I'm 37 years old. I'm a millennial. So if you're in this out, you know, relative age group, you're probably experiencing the same thing. This group of people, believe it or not, accounts for 38 to 40 percent of all U.S. homeownership right now, today. That's a that's a staggering number. 38 to 40% of all U.S. homes are owned by the baby boomer generation. So this wealth transfer is basically them unfortunately passing away and giving their assets down to their kids, grandkids, charity, uh, you name it, whoever their heirs are going to be in this situation. And uh economists are basically telling us that it's going to be the greatest transfer of wealth in American history. Which is mind-boggling if you come to think about it. Like, what exactly does that look like? Uh, if you read different reports, they're averaging anywhere from $80 to $100 trillion in wealth will be transferred between now and the 2040s. So you you're looking at the next 20 to 25 years of time that this wealth is going to be transferred. Now, the reason I'm telling you this is because what are people's genuinely generally largest assets when they purchase? It's real estate. There's a ton of real estate going to be involved in this transfer. It's believed that it could be around 32 million homes that will be transferred in this time. Right? So what does that mean? It just means that we're gonna see a lot of people come into equity, not necessarily by buying a home, but maybe inheriting a home. Right? So if you if your parents have owned a home and they're they have their home free and clear, they're not paying anything on it, all of a sudden they're no longer around, they give that house down, there you go. So we're gonna have a lot of homes being inherited um over the coming 20-year period. Now, it does not tell you this because it's like, you know, inventory, like, whoa, it's gonna go way up. No, this is gonna be a gradual thing. It's gonna happen over time. You know, hopefully this generation lives as long as possible, right? Uh, humans in general are living longer than they used to. So there's no exact like timing of this, but it is going to be a really interesting thing to see how it affects our economy, how it affects the real estate industry, what it does to inventory, and just over the years whether it really has a larger effect than what our normal back and forth ebb and flow of real estate sales is going to be. So just something kind of cool to watch and see how it unfolds. Um, it also is going to unfortunately it's gonna continue to make the wealth difference in our country even greater, in my opinion. Meaning that those families who bought real estate and have wealth to transfer who are already in the 1% or the rich of the rich are just going to get richer. Those that are in in the lower income or never owned a home or have been renting, they're going to also, again, not get richer. So I believe it's almost going to widen the playing field from an affordability standpoint, which will be really, you know, interesting to see from an economic aspect of how those families and you know the wealth disparity in our country, I don't see it getting any closer, I guess is what I'm saying over time. Um, and that's just to, again, give you the information of kind of where it's headed. Um, it's also something to think about people who are, you know, in my generation or millennials or even the generation younger than me, their outlook may not be to buy their own home. Their outlook may be to inherit their first home. So that may be something that you hear more and more from that group. It's just like, oh, well, you know, we already live in mom and dad's house, and then, you know, as they get older, they just want to gift it to me. Actually, come to think of it, I've heard that quite a few times in in the last few years from people who are in that situation where they have different generations living in the same household, and they're gonna basically pass it down to their kids. So, really cool, by the way. I mean, I think it's awesome that that this generation gets to share uh with the next, which is uh a really neat thing that's gonna happen. Now, in that, not all inherited homes will be sold, of course. Um, you know, some will be kept, some will be lived in, some will be turned into rentals. Um, I did see a stat though that says 50 to 70 percent of inherited homes are eventually sold. So I think that was kind of interesting to think about. I wonder if that will change. And and the reason I I think that could be the case is because affordability now versus then is vastly different. I think that's the number one reason why that group, the Baby Boomer Generation, owns so much real estate is because think about how the affordability was and what it was like to buy a home when they were ready to do so. You know, we're talking about if they still own it, something they could have purchased for $100,000 that's now worth $400. You know, something of that nature. Obviously, it depends on how long they've owned, but I would assume a lot of them own multiple properties now. Um, which by the way, my parents need to own more homes. Now that I'm thinking about this in uh in my head, I'm thinking, man, I I should have uh talked them into buying more houses, have more to inherit. So, food for thought for all of you who are uh have parents in this generation, it may be time to start having this conversation with them, right? And actually, you know, asking, hey, what's gonna what's gonna happen to these assets? What's gonna happen to your estate? Have you thought about this? Um, it's really easy to go through life and not have these conversations. Um, it would be a lot more beneficial for you and your family to have them, right? Set a plan in place, understand how assets need to transfer. What can you do to get ahead of this so that it doesn't just you know fall into your lap and you're like, oh, I had no idea this was coming. So we want to prepare for these things. Also, if they have the means to potentially help you get into some sort of homeownership or an additional property before they're gone, why not consider that now? That would be the other thing I would I would tell you. If if there is so much owned real estate and so much equity involved, how could we utilize that as a family to now grow the net worth of of our kids, their grandkids, and so on and so forth? So just some really good and interesting conversations to have. Uh, when I looked at these numbers, I was like, wow, that is such a big amount of wealth to be transferred money-wise, not only, but then how much of it is actually in real estate is is incredible. It's it's more than we've ever seen before. So have those conversations, you know, get ahead of it, figure out where it's at. Those of you who have multiple siblings, by the way, even more important for you. Um, from what I've seen in my years of being in the real estate business, the more the more siblings and the more time that goes by without these items getting discussed or figured out, sometimes the more strenuous the relationships become because unfortunately they'll start saying, you know, then there's there's competition. Like any like anything in family, like, well, this is mine, well, that should be mine. If we can have these conversations ahead of time, we can avoid some of that. Because ultimately, I'm you know, I'm I'm assuming here, but I'm thinking the parents probably want this to be an easy transition for their family and their kids, not a not a more difficult one. Um, so that's kind of the next piece of this is like okay, well, if my parents own one house, two houses, three houses, four, whatever it is, how do I go about making sure that it does transfer? Do they want, are they already planning to transfer it to me? Do they want to? Do they have other you know ideas? What what are those? And so I think the the first thing is find out, right, what is the what is the estate or the portfolio look like and what does that mean? Now, of course, other assets can transfer as well, you know, cash, uh, cars, stocks, bonds, I mean, you name it. There's all kinds of different asset classes. We're gonna focus specifically on real estate for this conversation because that's what we do, and I want to make sure that you're prepared. So, first thing, have the conversation, figure out where they're at, what's coming, and what you need to do to get in place. There are different things that you can do to set in place. The the number one thing that you can do is establish a trust, a family trust, something that states where the assets go. If the owner of the trust, which would be the baby boomers in this case, in our in our scenario here, who will be the trustees? Will that be one sibling? You know, will it be one child? Will it be multiple children? Are grandchildren involved? You can map this out any way that you want to, but you will definitely want to establish a trust. Um, state laws are different, right? If you're in a we're we're in Nevada, so I'm gonna tell you what I know from Nevada, but other states are different if you're watching this. Figure out your state laws, but no matter what, a trust is the most, it's the highest form of protection that you can get for real estate. Because if it's in a trust, it goes from one trustee to the next trustee down the line, and we don't have to involve court or probate or will or whatever else might be involved that's not an actual legally recorded entity. A trust can be a legally recorded entity which allows you to make decisions even if the original trustee is no longer there, it falls down to the next one, right? So we can get into more detail on trusts um in potentially another episode. This one I'm just gonna kind of lay the framework for you. All right, so want to establish a family trust. Who makes the decisions? Where did it where does it go? You know, is this a personal property, is an investment property? Because we need to answer those questions. Um, in that a trust, you're gonna have an estate planning or trust attorney set this up for you. If you do so, it's gonna cost you some money. Okay. But a little bit of money now to avoid going to court and paying attorneys later is going to save you thousands of dollars. Okay. So if you get nothing else from that, uh this is the one thing I hope you take from this. Talk to an estate planning attorney, establish a family trust. It will save you leaps and bounds in the long run. It will also allow you to make your decisions while you're still here. Okay. Any of you that have children, I don't care how young you are, if you have children and you own assets like real estate, you should establish a family trust. Because God forbid something bad happens to you, you need to be making decisions on what goes where, who takes care of your kids, where your assets go, how they get from you to them. Um, all very important conversations and things that you're going to want to detail while you still can. Okay, so please think about establishing a family trust for that. Um, secondarily, if you have rental properties, how can we get them into some sort of entity like an LLC or something else that's not your name to protect you in the long run? And then also, what other managing members can we have of those entities so that they get transferred accordingly as well? You may not want to put investment assets into a family trust. There are legal reasons why, which we can get into one in a one-on-one if you wanted to uh talk with us about that. Um quick disclaimer, by the way, just so I can have this recorded. I am not an attorney. I am not a CPA, I am not a tax person, I am not giving any legal advice. I'm simply telling you what I've learned. I'm a licensed real estate agent, I don't pretend or know to be anything other than that. All right. Hopefully that is okay if anybody sends this to an attorney and says, well, Aaron told me. Um, so uh just wanted to make sure I disclose that. Um so on the on the rental properties, LLCs are great. Any way to protect the asset in a name other than your personal name is a great way to go. You can accompany those with a trust, maybe a separate one, but that's likely an attorney question with how you want to set up your your dealings and your wealth. Um, but very important conversations that need to be had. And I just when I thought about this transfer of wealth, I'm thinking, like, they're talking to me. Right. And so I'm thinking, hopefully, if I'm talking to you and you are, you know, anywhere close in age to me, or you are somebody in close to age of my parents, or somewhere in the middle, you're likely going to be affected by this in some capacity. And so I just want you to be prepared. I want you to understand what's coming. And I also want you to enjoy your time with them as long as you can and allow them to protect you and you protect them and make sure that all the hard work that they put in and the money they spent and the years they spent can positively affect the rest of the family moving forward in a really big way. Okay. So keep that in mind. Now, on the other side of that coin, I don't know if you heard what I said, but 50 to 70% of inherited properties will eventually sell. Why is that? Well, I don't know about our generation versus theirs, but we're a little bit more like uh, I don't know, what do I want to say, bougie? Or like we just seem to want everything to be updated and perfect, and we have all these expectations. Well, I don't know if you've been into a house that a you know 60, 70, or 80-year-old lived in lately, but it's probably not the most updated. So are you okay to inherit those, right? Most people are gonna want something that's ready to go. They're not necessarily gonna want to own multiple properties or deal with uh renting them out or you know, so on and so forth. Now, I know that the group listening to this is gonna want multiple assets, right? They are gonna want to think about keeping those properties. So I'm here to to implore you if you're inheriting property and there is any way that you can hold on to it, please do. It's going to be a fantastic thing for your family. Your kids could live in it one day, right? You can rent it while they're going through school and then use it, sell it later, and pay for college. Like, whatever it is, you can fix that property up, you can then rent it out for more. Like more assets are better than less assets. So if there is any way, if you're in the group that's going to inherit these properties, that you can keep them in the family, I'm asking you to please find a way to do it. Because it can have a huge impact on your family long term. And I think that would be one of the things that separates you and maybe puts you in a higher class of wealth, and your kids get to benefit from that. I mean, why would you not want that? I mean, just imagine your, you know, parent is no longer here and gifts you a five hundred thousand dollar free and clear piece of real estate. Like how could you be in a better position than that? That's fantastic. Let's figure out a way to make that work for us. What can we turn that into? Right? What can we utilize that to create? And maybe for some of you that is selling it, right? And if you're going to, then what's the long-term goal of that? What are you hoping to get out of it? What do you want to do with the money? So I'm just saying, spitballing all of these examples so that I can try to make you think a little bit about what it may mean long term and wealth and building wealth and what that one property may turn into rather than just inheriting, selling, and moving on. So think about that, food for thought for you. Um, as we move forward again, like I said, this is going to be a gradual thing. This isn't something you're gonna see, you know, tomorrow. But as the years go by, I think you're gonna hear more about this. And so I thought it was was um, you know, interesting and made enough sense to give some extra additional information on what might be coming, the injection it might have on the market, and the options that you would have if you're in this group or in this class of some sort, and um just give you a little bit more information. So hopefully it was beneficial for you guys. If you have this scenario upcoming in your lives and you want to ask a question or just get a little bit of understanding of what the heck I'm talking about, if you don't, um just reach out to us. Uh, easiest way is our email. It's info at powersre.com. We'll get back to you and kind of help you through that process. If your parents are kind of, hey, I want help with this. I know I want my son or daughter to get this house, but I'm not quite sure what to do. We can we can help you kind of solidify that process so that there's no missing pieces and they can easily take it over without any additional money spent, going to court, all that kind of stuff. So reach out to us if you need to. And I appreciate all the support. And we'll catch you guys on the next one. Love ya.