The much-anticipated great wealth transfer is on the horizon, but there are nuances within this trillion-dollar shift that may be overlooked. This week, I speak with experts to explore whether the transition will be smooth or if future regulations could slow it down to a "wealth trickle," potentially sidelining overlooked groups like Generation X.
We’re also excited to unveil the second episode of Wealth & Wisdom, where I sit down with wealth management industry influencer Josh Brown of Ritholtz Wealth Management. We discuss the evolution of the wealth management landscape, including the subtle differences between high-net-worth and ultra-high-net-worth individuals.
As always, we appreciate any comments, ideas and insights that would make this newsletter more useful. I look forward to growing this family office community with your help. Please email me at [email protected].
HANDPICKED: What you may not know about the great wealth transfer
By KRISTEN OLIVERI
The much-anticipated great wealth transfer is coming, as we’ve been told. But nuances within this trillion-dollar shift may have been overlooked.
While many in the family office and wealth management industry focus on preparing women to manage future family offices and inherit generational wealth, an often-overlooked group is Generation X, who stand to play a crucial role in this transition. As discussions revolve around empowering women, a debate looms on whether the transfer will be smooth or whether future regulations might create a “wealth trickle” instead, leaving some — like Gen Xers — on the sidelines.
Regulatory challenges: Will wealth transfer become a wealth trickle?
The great wealth transfer could face potential roadblocks that many have yet to acknowledge. Sandra Swirski, founder of Washington-based Integer LLC, warns that next year’s tax reform bill could put that transfer at risk.
“Congress faces a massive fiscal cliff on Dec. 31, 2025,” Swirski explained. “Lawmakers on both sides of the aisle are signaling that raising tax revenue, possibly in the trillions, will be necessary to avert this crisis. And where will they look to find that revenue? Wealth, in all its forms: estates, investments, endowments and income.”
The 2025 fiscal cliff isn’t the only concern. Long-term issues, like the federal deficit and the impending bankruptcy of Social Security and Medicare in the mid-2030s, are also pushing lawmakers to consider drastic measures that could further threaten the transfer.
Kathleen Grace, CEO of the Boca Raton, Florida-based Fiduciary Family Office, draws parallels to past estate and income tax legislative sunsets in or close to an election year. “It reminds me of 2012," she said. "I’ve been in practice almost 35 years. If you recall then, it feels like similar hope for last-minute legislation while prompting many to preempt with gift transfers and other estate planning.”
Grace sees the estate tax and similar measures as potential bargaining tools in a broader political agenda. “Is this a critical political issue?" she said. "I don’t think so, but both sides have used sunsets as a bargaining tool in exchange to pass other legislation in the past, and they will in the future.”
Grace also noted how the estate tax itself isn’t a priority for immediate revenue generation: “The estate tax isn’t both parties’ focus for immediate revenue because one has to die for the government to get any portion of that tax. And given the high exemption today, the revenue is less than 1% of the total federal revenues, which means approximately 7,000 returns will owe estate taxes.”
The real focus, Grace believes, will be on income tax revenue to pay for the incoming party’s legislative agenda and, of course, balance the budget.
So why isn’t this risk being discussed more openly? Swirski points to a lack of awareness and distractions like the upcoming election.
“The funny thing about this election is that both Democrats and Republicans are calling for more tax revenue,” she said.
Grace echoes this sentiment, predicting potential volatility ahead: “Nobody knows at this point, but what we do know is to brace ourselves for this volatility.”
She suggests that a “hail Mary” move may occur before the December 2025 deadline to extend current policies, but much remains uncertain.
In terms of how family offices should prepare, Swirski said: “We need to connect the dots for the community and raise awareness. By leveraging collective influence, the community can push lawmakers to see the broader implications of targeting wealth transfers, which are crucial for philanthropy and women's economic empowerment.”
Generational perspectives: What happens to Gen X?
While much of the conversation around the great wealth transfer focuses on millennials and Gen Z, Gen X seems to be an afterthought. But why is this 65-million-strong generation so often left out of the discussion?
Ken Spruill, director of the Center for Family Philanthropy and Wealth Education at Philadelphia-based Glenmede, highlights the cultural factors at play. “If you look at the numbers — Gen X is 65 million, Gen Y is 72 million and Gen Z is about 70 million — some of this neglect stems from cultural visibility," Spruill said. "Who you see and hear in larger conversations tends to skew younger.”
Gen X grew up before the internet became mainstream, he pointed out. And by the time it did emerge in the early 1990s, many Gen X habits were already set, leaving them slower to adopt the digital technologies that defined the lives of millennials and Gen Z.
Keith Bloomfield, CEO and founder of New York-based FFT Wealth Management, which oversees $32 billion in assets, has a unique perspective on wealth transfer. With a focus on serving single-family offices and ultra-high-net-worth individuals, FFT works closely with families navigating the complexities of intergenerational wealth.
"Many baby boomers who created the wealth or were involved in setting it up have children who are not actively managing it," Bloomfield said. "Gen X is often unprepared to receive this wealth.
"Part of the issue is that much of the wealth is tied up in irrevocable trusts, which can restrict access. It’s typically not for day-to-day expenses, more for major life events like buying a house or maintaining a lifestyle.”
Another factor is that while Gen X will inherit trillions of dollars — estimates suggest $27.4 trillion for the 65 million Gen Xers, compared with $29.6 trillion for the larger Gen Y — they are often left out of wealth transfer conversations. “There’s a tendency to focus on boomers, who are more vocal, and younger generations, who are more tech-savvy, leaving Gen X in an awkward middle ground,” Bloomfield said.
This hands-off approach to wealth for Gen X can be problematic, as families avoid conversations about mortality. “No one likes to talk about mortality, but it’s a reality," Bloomfield said. "As the creators of wealth age, we encourage clients to bring the next generation into these discussions. It’s a huge responsibility, and without proper preparation, wealth can be lost quickly. Ninety percent of third-generation heirs lose their wealth."
This neglect could have serious implications. With many Gen Xers now entering their prime earning years and their parents preparing to pass down wealth, Spruill said, it’s critical that they start engaging in serious financial planning. This includes conversations with their children — many of whom are now young adults — and preparing them to be responsible stewards of future wealth.
The big positive that Bloomfield is witnessing with Gen Xers who are motivated to prepare themselves for this wealth transfer is that they are inclined to engage their kids in the conversation much earlier than generations prior. These Gen Xers are taking responsibility for their own wealth, he said, which makes for a hopeful future.
Both Spruill and Bloomfield agree that for Gen X, it all starts with education and tasks such as an inventory of current assets and potential inheritances, setting clear goals and aligning family values around wealth.
“It’s important for Gen X to think not just about what they want to leave behind," Spruill said, "but how they can prepare the next generation to receive it.”
Related reads:
> Gen X stands to be main beneficiary of $31 trillion wealth transfer, says Altrata | Crain Currency
> Wilmington Trust's Alvina Lo discusses bridging the wealth gap and getting ready for the great wealth transfer | Crain Currency
> UBS expects $83 trillion to shift amid ‘great horizontal wealth transfer’ | Crain Currency
Wealth & Wisdom: Josh Brown discusses expansion of the wealth industry
By KRISTEN OLIVERI
In this episode of Wealth & Wisdom, Editor Kristen Oliveri sits down with Josh Brown, CEO of Ritholtz Wealth Management, for a wide-ranging discussion. They cover his latest book, You Weren’t Supposed to See That, and his insights on the evolution of the wealth management market — including the nuanced differences between high-net-worth and ultra-high-net-worth individuals.
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In case you missed it: Wealth & Wisdom: Don Peebles talks family legacy
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