The $124 Trillion Wealth Transfer Is Coming. Is Your Family Ready?

Trillions of dollars are expected to pass from baby boomers to their children over the coming decades, and a new Wells Fargo study is showing that families aren't talking enough about what comes next. Joining us now to break it all down is Lorne Moulton-Ford, National Private Wealth Planning Director for Wells Fargo Wealth and Investment Management. Thank you so much for being here, Lorne. Thanks for having me. Of course. So we're so excited to kind of dive in here and learn all about what this 2026 wealth transfer study really found. So you were looking at some of the biggest obstacles to passing down wealth that are often personal and not really financial. So tell us a little bit about what surprised you most about these findings and where families are really unprepared for what's coming next. Well, I think two things surprised me the most was, and the first was that four and five parents say all their documents are in place, yet only one and two have completed the necessary steps to actually implement their plan. And we see similar numbers from parents when we ask them if they actually understand the plan. The other thing that was very surprising is the disconnect between parents' intentions and the children's experiences. 29% of parents who had inherited wealth reported negative family experiences, and 61% among adult children have already experienced negative consequences. You know, that tells us that the next generation is seen far more complex than parents may recognize. So wealth transfer is not simply a financial transaction. It's a family transition. The relationships surrounding the money may be the most vulnerable part of the plan. Yeah, it really does seem that way. And that disconnect that you mentioned really seems to be at the core of that. I mean, some of your research, three and four parents say they're comfortable discussing their wealth transfer plans, but I believe only 21% have actually had that detailed inheritance conversation with their children. So why do you think that disconnect is so big? And also what do you think can be done to actually initiate those conversations? Well, both generations are worried about sending the wrong message. Adult kids are worried that if they ask about the inheritance, they're going to make them appear greedy. And some of them are just uncomfortable talking about it. You know, parents have different concerns. They're worried about how much to disclose. They're worried about demotivating their kids. They're worried about creating entitlements. They're worried about discussing that plans could change. But the result is that there there's a stalemate in which everyone, you know, really recognizes the importance of the conversation, but no one really feels comfortable starting it. Yeah, that's such a hard, really initial hurdle to get over there. Thinking about that kind of, I don't know, I guess these different perceptions that each have of the other and not wanting to be perceived in a certain way, it really does create this issue of getting that conversation started. So what have you found is something that people can do tangibly to say, all right, we're going to sit down and actually have this conversation that's so important. Well, let's start with the why and not how much. Parents can talk about what the family's wealth is intended to accomplish, security, education, entrepreneurship, philanthropy, opportunities for future generations. You know, that approach reflects, I think, an important point of agreement in the study. Eighty-six and eighty-four percent of the parents and kids said that the values are more important than money when considering what one generation passes to the next. So a useful opening might be. You know, before we discuss accounts or numbers, we want you to understand what this wealth means to us, the opportunities we hope it creates, and the responsibilities that may come with it. You're saying that 44% of the parents say that they don't fully understand what their estate plan even does. So looking at those documents themselves might not be enough to actually really understand the full picture there. So what do you think needs to be done to really ensure a successful wealth transfer when it comes to even the parents themselves understanding what their will plan is? Well, when we start with the documents, you have to start with an inventory of assets. You have to make sure those assets are titled into the documents. We have to confirm that. And like you said, the parents have to understand what those documents mean. I think there's a traditional way we do it. We go to an attorney, we have these documents drawn up, and you just hear from the attorney talking and say, this is what these documents are accomplishing. And we know that people learn differently. We learn audibly, visually, and kinesthetically. So you actually have to bring these documents to life. You have to show them visually and sort of stress test the estate and share what are the dollar amounts, what are the accounts that are going to each kid visually. So, you know, everybody can learn and understand those documents and people actually can make informed decisions. Yeah. And in terms of the adults then understanding, or I guess we should say the older generation understanding what their plan then looks like. Talk to us a little bit about the importance of children now understanding that too, especially if they're named as executors, trustees, given power of attorney, some of these terms that a lot of people have heard, but don't really know practically what that means. What's your advice there for actually getting people to understand what their expectations are in their parents' wealth plan and estate plan? Well, you know, parents don't have to start with disclosing every account balance or the full value of the estate. But like you said, children do need to understand the purpose and the broad structure of the plan. They need to know if they're expected to serve as an executor, trustee, financial agent, or health care agent. They need to know if they're expected to assume a particular responsibility, where the documents are, who are the professional contacts, and how and why the decisions were made, particularly if distributions are not equal. The conversation needs to begin while the parents can explain their reasoning and respond to questions, not after a crisis, which is the worst time. Yeah, that's so important that that crisis moment is not going to be the best time for anyone to be learning or explaining what's going on in that moment. So having those conversations before is so important. And thinking about who's the best person to have those conversations with from a professional standpoint, obviously financial advisors, a big part of that. Is there anyone else, whether it's a family attorney or some other position that you recommend or think would be helpful for people to kind of incorporate into these discussions? Yeah. Well, you know, we start with the financial advisors, attorneys, CPAs, trusted family friends, you know, anyone who can provide structure and reduce pressure on either generation. You know, our study said that about 84% of adult kids I believe that speaking to their parents' advisor would help them feel better prepared. Only one-third of the children have actually met the parents' advisor. So having that agnostic resource in the room is going to be critical in order to bridge the gap, in addition to dealing with and focusing on the places where we have commonality, right? The values, not focusing on dollar amounts, focusing on roles, and then moving forward from there. Yeah, such an important place to start. I mean, you've suggested this kind of framework of moving from documents to dialogue to action. If someone's watching this and is saying, all right, this applies to me, I need to get on this. I need to have this conversation from either side, really. What do you think is the first thing that they should do to really get the process started and really have this conversation that needs to be had? Well, schedule one family meeting and have it focused on purpose, roles, and process, not account balance. I'm sorry. I'm going to start over. Schedule one family meeting focused on purpose, roles, and costs, not account balances. Parents might explain what they want their plan to accomplish, identify who may be asked to serve in key roles, and agree on what information will be shared next, and then move forward from there. And then if you want to bring in that trusted advisor, whether it's a financial advisor, an attorney, a trusted friend, in order to reduce Reduce pressure on either generation. We see that as a valuable resource for these family. It's such good advice to start there and have that really initial point to have this conversation get underway. We really appreciate you walking us through all of these results and giving us all of these tips as people move forward in this big wealth transfer that we're seeing at Uren Walton-Ford, National Private Wealth Planning Director, Wells Fargo Wealth and Investment Management. Thank you so much for your time today. Thanks for having me.