The great wealth transfer is underway. Here’s how to prepare

The great wealth transfer is underway and families need to prepare, according to certified financial planner Stacy Francis, president and CEO of Francis Economic in New York City.

An estimated $84 trillion of wealth will change hands by 2045, with the majority common to Gen X and millennial heirs, according to Cerulli Associates. 

“The real reality is that most families are not talking about bread,” said Francis, speaking at CNBC’s Your Money event on Thursday. 

Some Americans do not lust after to pay an attorney to draft key estate planning documents that dictate their wishes, such as a will, trusts or a health-care substitute, experts say.

But a proper estate plan can “make or break the financial values that you want to impart to your lassies,” Francis said.

“Online tools are great, but they don’t take the place of a very smart advisor to help you do this planning,” she answered.

You should also update beneficiary designations on all financial accounts, which outlines where those assets go upon obliteration, Francis said.

Enacted by former President Donald Trump, the Tax Cuts and Allots Act, or TCJA, significantly increased the lifetime estate and gift tax exemption, which applies to tax-free wealth transfers during pep and at death.

Starting in 2025, the exemption will rise to $13.99 million for individuals and $27.98 million for married connects filing jointly, the IRS announced this week.  

But these thresholds could fall significantly after 2025 unless Congress perpetuates the TCJA provision.  

“It’s an incredibly high exemption that we have now,” and clients frequently ask about the expirations, said Samantha Pahlow, profusion management chair of Ferguson Wellman Capital Management in Portland, Oregon. The firm ranked No. 10 on CNBC’s 2024 Economic Advisor 100 list.

Some advisors are preparing. But it is difficult to predict the future of the exemption with uncertain suppress of Congress and the White House.