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Education | Aug 07, 2023

Our Eight Inheritance Planning Tips for the ‘Great Wealth Transfer’

Steven Kohler


Nancy I. Kunz


“I had an inheritance from my father, it was the moon and the sun.
And though I roam all over the world, the spending of it’s never done.”
― Ernest Hemingway

We have all heard about the "Great Wealth Transfer" expected to occur over the coming decades as baby boomers and older generations pass their assets on to their heirs. But whether recipients of the Great Wealth Transfer are ready for an inheritance will depend on several factors, including preparedness, level of financial literacy, and responsibility demonstrated by the beneficiaries as well as the amount of communication and planning conducted by the current wealth holders.

According to a recent survey by New York Life, 15% of Americans expect to receive an inheritance in the next decade.1 The survey shows they intend to use it for paying off debt (37%), supplementing their retirement savings (35%), and preserving the inheritance to pass it down (26%). But it can be more difficult to plan for longer-term goals like buying a home, growing your family or retiring when day-to-day responsibilities and challenges are occupying your time and attention. Only 42% of adults who expect to receive an inheritance said they feel very comfortable financially handling the new wealth.

If you expect to inherit or have already inherited assets, it's essential to take the time to educate yourself while seeking advice from your advisor. They can help you navigate the complexities of managing an inheritance and reinforce the benefits of focusing on the basics. They will also help with any important changes that can impact the value of your inheritance. For example, you may be affected by higher estate taxes due to current elevated gift tax exclusions sunsetting after 2025.2 In addition, the current 40% maximum gift and estate tax rate will increase to 45% in 2026. This will be the highest estate tax rate since 2009.

There are always going to be new issues like these to monitor and address over time. We have listed some key details to consider in your discussion about inheritance with your advisor:

  1. Provide them with complete details of the inheritance, including the types of assets you've inherited (cash, stocks, real estate, retirement accounts, etc.), their value, and any outstanding debts or taxes related to the inheritance.

  2. Review your short-term and long-term financial goals and determine if an inheritance will catalyze changes to those goals. These may include buying a house, saving for retirement, funding education, or starting a business. Your financial advisor can help align your inheritance with these goals, and create a plan to preserve and grow the inherited assets.

  3. Discuss the tax implications of your inheritance. Certain assets may have different tax treatments, and your financial advisor can help you develop a tax-efficient strategy designed to maximize the value of your inheritance.

  4. Review your existing estate plan or create one if you haven't already. Your financial advisor can collaborate with an estate planning attorney to ensure your inheritance is structured effectively for your heirs and minimizes potential estate taxes.

  5. Review your insurance policies, including life, health, and disability insurance, to ensure you have adequate coverage. This should include protection against rising healthcare expenses and/or access to long-term care that could be needed later in life.

  6. If charitable giving is a priority and you wish to donate a portion of your inheritance, there are several ways of doing so. Your financial advisor can help you explore the most tax-efficient ways to give to the charities that are meaningful to you.

  7. If you have children or plan to grow your family in the future, discuss options for education savings, such as 529 plans or other college savings accounts.

  8. If you plan to share the inheritance with family members, then it will be very important to discuss the best way to communicate these details with them and manage potential conflicts.


Receiving a substantial inheritance can be emotionally overwhelming. Beneficiaries must also be emotionally prepared to handle the responsibility and potential family dynamics that come with the wealth transfer. Effective communication between wealth holders and their heirs is crucial, as it increases the chances that recipients will be well prepared to manage their inheritance.

Each individual's financial situation is unique, and it's essential to have open and honest communication with your financial advisor to tailor a plan that fits your specific needs and goals. As with any significant life event, proper planning, education, and support can play vital roles in ensuring a smooth transition for the recipients of the Great Wealth Transfer.

Thanks for reading.

This material has been provided for general, informational purposes only, represents only a summary of the topics discussed, and is not suitable for everyone. The information contained herein should not be construed as personalized investment advice or recommendations. Rather, they simply reflect the opinions and views of the author. D. B. Root & Company, LLC. does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice that is specific to your situation. There can be no assurance that any particular strategy or investment will prove profitable. This document contains information derived from third party sources. Although we believe these third-party sources to be reliable, we make no representations as to the accuracy or completeness of any information derived from such sources, and take no responsibility therefore. This document contains certain forward-looking statements signaled by words such as "anticipate," "expect", or "believe" that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially from the expectations portrayed in such forward-looking statements. As such, there is no guarantee that the expectations, beliefs, views and opinions expressed in this document will come to pass. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. All investment strategies have the potential for profit or loss. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses. The impact of the outbreak of COVID-19 on the economy is highly uncertain. Valuations and economic data may change more rapidly and significantly than under standard market conditions. COVID-19 has and will continue based on economic forecasts to have a material impact on the US and global economy for an unknown period.

Steven Kohler


Chief Planning Officer

Nancy I. Kunz


Senior Financial Advisor

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