Women and The Great Wealth Transfer

Over the next two decades, more than $84 trillion is expected to pass from the Silent Generation and Baby Boomers to their heirs. This is the largest intergenerational wealth transfer in history, and is being coined “The Great Wealth Transfer.” 

This is particularly significant for women because they are projected to receive and control the majority of those assets, whether as surviving spouses or as daughters and granddaughters inheriting wealth. By 2030, women in the United States are expected to control roughly $34 trillion in financial assets. 

In this episode, WHZ Managing Partner, Advisory Leisl L. Langevin, CFP® CDFA shares what women and their families can do now to prepare to make the most of this opportunity into the future.

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Welcome to you and your Money. Today's episode features Leisl Langevin, managing Partner advisory at WHZ Strategic Wealth Advisors. Today we're talking about something that's being called the greatest wealth transfer in history, and how women are expected to be at the center of it. Set the stage for us, Liesl. What exactly is happening? Yeah. Well, over the next two decades, Wayne, more than $84 trillion is expected to pass from, we call it the Silent Generation and Baby Boomers to their heirs. And this is the largest wealth transfer in history, and that's why it's coined The Great Wealth Transfer. But it, it presents both some opportunities as well as some, as some potential risks, which we'll talk about today. But it's really about passing along wealth and, and those that are inheriting it, and maybe making sure that you can plan strategically because something what can happen is families can lose their wealth to taxes, or if that inheriting generation is not ready to accept it, they you know, they struggle often to manage it. But we've partnered with so, of course, KKC Law. They're out of Vernon, Connecticut, and we've done a special series on YouTube and we've gotten a lot of great feedback on it, but it's called Getting Ahead of The Great Wealth Transfer, and we cover some of the key topics we'll talk about today but we go into a little more detail. But our first episode dropped on February 25th, so we'll be releasing an episode every other Wednesday until the end of April, so definitely be sure to check that out, and you can find it on our website, which is whzwealth.com/wealthtransfer. some good content in there. Sounds like a really valuable series to follow. Thanks for sharing about that.$84 trillion, that's an extraordinary It is. It is. And given that it's Women's History Month, we thought it would be good to also just point out that it's significant for women because they're projected to control a majority of those assets and whether it's a surviving wife in a husband-wife relationship or as daughters, granddaughters inheriting this wealth. So we'll have a couple stats on Leisl, why are women positioned to receive so much of this Well Wayne, there are a few key drivers of this, and that's because women in a husband-and-wife relationship, women tend to live longer than men. As we know, statistically that's true, and so they often become the surviving spouse and the primary decision-maker for the, the household later in life. Also they are participating at record at record highs in the workforce, and so their earning power has grown substantially and this has allowed them to save more. And it's stated by 2030, women in the US are expected to control roughly $34 trillion in financial assets, which is up from $10 to $11 trillion. And that number I gave earlier, the $84 trillion number, that is that's over the next two decades and that's about 70% of the the total $124 trillion that will pass down to the next generation. So women would control about $84 trillion in the next two decades, which is eh, you know, just a, that's a a big number. So this sounds like both a financial opportunity as well as a responsibility. It is, yeah. it's very empowering but it does present some challenges. It we've seen in research that women, they feel unprepared typically to manage significant inheritance and or a financial windfall, and because, eh, the reality is though when we actually work with female clients and they they tend to outperform some of their male counterparts because what they, they do is they stay invested it's interesting to see. But sometimes it's more of a confidence thing than, than ability. Is that right? Why do think that is, that women outperform men in investing success? Well, so women tend to trade less frequently, so they're what they do is once they're in a portfolio strategy, they won't sell in the downturns or or try to take money off the table in the upturns. They let their strategies play out over time, and so that's really interesting to see. They tend to be more stable in that way. They'll pick their strategy based on their risk tolerance and we help them with that so that's interesting. They also tend to have more of a balanced portfolio, so it's, it's usually more disciplined, a a little less risky typically, and so that helps to keep the portfolio from so much volatility, and downs. So but that, typically those two things produce meaningful long-term results for any investor. So when you trade less frequency and you're, less frequently and you're not trading when markets are going down or up and then you have more of a balanced portfolio, over time, that can really play out. And so I mentioned it's more about confidence, and that's because so it's interesting. Women are, they tend to be more of the final decision-makers but they've historically been less involved in finances over time, so and that's, that's starting to change, too, but it, it is still a thing. So this isn't just about wealth, it's about education. Yeah, exactly, and, and empowering women and, and all investors of all ages and building that financial literacy and having them participate in financial planning meetings, and we always encourage both spouses to always be in, in financial meetings because making, decision-making and especially being aligned to your spouse is so critical. So having that knowledge is really, really important. It's also, too, a little bit about behavior, so you can have a, a lot of knowledge, but you also have to have the behavior to save and to spend within your and things like that. So definitely when families combine communication, education, and also strategic planning, it's wealth is much-Um, it'll pass to the next generation and also typically the family values are carried That makes sense. And I imagine receiving an inheritance typically occurs during an emotional time while you're grieving the loss of a loved one, Right, exactly. And that can make the process of managing that wealth so much harder. Usually they'll have mixed emotions about it and it, you're feeling like,"Oh my gosh, I just had, my loved one pass away and now I have this, all this money to manage. What do I do of it, do with it?" So preparation ahead of time is so important, both from the perspective of the older generation who knows what wealth they will pass along, and then for the younger generation who's set to inherit it. And it's becoming a little more common now, but families historically have have not had these detailed conversations ahead of time about what's in their estate plan, what might this mean for their taxes what's their investment strategy and, and financial plan and, and what assets might pass on to that next generation. So I, we're definitely seeing that the conversations are becoming more it's still a We're discussing the Great Women's Wealth Transfer with Leisl Langevin from WHZ Strategic Wealth Advisors. So Leisl, what should families be doing now to prepare? Yeah, having that conversation. And if a family feels, you know, they, they're not sure how to have their conversation then they can involve, for example, a financial advisor. But it's, it's having that first conversation and then making sure that things are current, so your estate plan powers of attorney, beneficiary designations. Anytime there's life events, always looking at And then third, building that financial plan and before the assets transfer so you know exactly what the next generation will inherit and then they can have an idea as well. And and during that, that financial plan building, you can address things like taxes making sure that risk tolerances and investment strategies cash flow needs, long-term goals, all those But we're, we do this all the time and we facilitate family meetings with our, our clients and their next generation. and it's always It's an interesting conversation, but I think an empowering one. Leisl, you mentioned taxes. I imagine that's a big piece of It is, absolutely. And so there's, there's so many different types of accounts now and different types of investments and they all come their own tax implications and some are more tax efficient to give to that next generation. So we're thinking through things maybe if they're charitably inclined, for example, maybe we give the charity, have them be the beneficiary of a less tax-friendly account and have the next generation be the inheritor of, more tax-friendly accounts. So it's things like that, having that proactive strategy that allows families not only to preserve more of their wealth, because of course that's, that's what we want to see, but also, again, I mentioned values and vision for their family and that's so key in getting that down to the next generation. For someone listening today, whether they expect to inherit assets or plan to pass assets along, what's the first practical step they should Yeah, and I, we think it's the, having the conversation. And you can start by just talking with one if you have children, the next generation, talking with one of them and then maybe opening it up to a whole family conversation. But we do find that the more knowledgeable that next generation is, the, the better it is. And if you need, again, help with guiding these to make it feel less awkward, we can be that, that one to lead the But again, families who prepare now, they're more likely to preserve their wealth over the long term. I mean, there's some stats out there about after a couple of generations wealth family wealth sometimes spent, all of it. So it's, it's something that you want, want to avoid. So again, and if you check out our website and tune into that series that we have, Getting Ahead of the Great Wealth Wealth Transfer on YouTube and it's on major podcast platforms, but it's whzwealth.com/wealthtransfer and there's some really helpful and valuable in there to get your family started off right with those conversations. For more information regarding wealth management and customized financial planning with WHZ Strategic Wealth Advisors, please visit whz wealth.com whz strategic wealth Advisors offer securities and advisory services through Commonwealth Financial Network Member FINRA sipc, a registered investment advisor Fixed insurance products and services offered through CES Insurance Agency. They practice at 697 Pomfret Street Pomfret Center Center, CT 06259 and 392AMerrow Road, Toland, CT 06084. They can be reached at 860-928-2341. WHZ Strategic Wealth Advisors do not provide legal or tax advice. The tenured financial services team strives to support clients in achieving their financial life goals while providing absolute confidence and unwavering partnership for life.