The “Great Wealth Transfer” may not be so great after all. While economists have predicted up to $84 trillion in assets will transfer from baby boomers to younger generations over the next two decades, many boomers aren’t planning to leave their homes—often their most valuable asset—to their children. Here’s why this generational shift is happening.
1. Rising Healthcare Costs Are Depleting Retirement Savings
Healthcare expenses have skyrocketed, with medical care costs increasing by over 114% since 2000, significantly outpacing the 81% rise in overall prices. Many boomers spend their nest eggs on medical bills instead of preserving them for inheritance. Medicare doesn’t cover dental or vision care, and even small copays add up quickly when managing multiple health conditions. As Judi Koncak, an 83-year-old retiree, puts it, “I thought we’d spend our golden years sitting on a beach in Hawaii with Mai Tais, even if in wheelchairs.” Instead, her husband’s stroke, surgeries, and cancer treatments depleted their savings, leaving little for their children.
2. Longer Lifespans Mean Extended Retirement Funding Needs
Americans are living longer than ever before, requiring retirement savings to stretch further. According to health policy experts, 60% of healthcare costs come after age 65, and those over 85 use three times more healthcare services than people between 65 and 75. This longevity creates financial uncertainty, making many boomers reluctant to commit to leaving substantial assets behind. The fear of running out of money is a powerful motivator to hold onto assets rather than promising them to children who might be counting on an inheritance.
3. Long-Term Care Costs Can Quickly Deplete Home Equity
The average annual cost of nursing home care exceeds $108,000 for a private room—more than twice the typical annual income for people over 65. Home care isn’t much cheaper, averaging around $42,000 annually for just 30 hours of weekly care. As retirement expert Jason Fichtner notes, “If someone’s sitting on a $250,000 house, and it’s paid off, and they get into their 80s and they need long-term care, long-term care can cost $10,000 a month right now. That’s going to buy you 2, 2½ years of long-term care.”
4. Many Boomers Prioritize Their Own Financial Security
A Northwestern Mutual survey found that only 11% of boomers consider leaving an inheritance their top financial goal. After working hard for decades, many feel entitled to enjoy their assets rather than preserving them for the next generation. As financial planner Melissa Cox explains, “A lot of older people are saying ‘I’ve done my due.’ They had to work their tuchus off for what they have. I’ve heard people saying, ‘I don’t want your financial plan to be my death.'”
5. The “Me Generation” Philosophy Extends to Retirement
Baby boomers have been dubbed the “Me Generation” for a reason. A Charles Schwab survey of wealthy Americans revealed that 45% of boomers agreed with the statement: “I want to enjoy my money for myself while I’m still alive.” This contrasts sharply with millennials and Gen Xers, of whom only 15% and 11% respectively shared this sentiment. This generational attitude difference reflects deeper values about wealth and family responsibility.
6. Many Lack Proper Estate Planning
According to Northwestern Mutual, two-fifths of boomers have no will, and half don’t know how much money they’ll need for a comfortable retirement. Without proper estate planning, homes often end up in probate—a lengthy, expensive process that can diminish the value of the inheritance. This lack of planning means many homes may be sold to cover final expenses rather than transferred to children.
7. Reverse Mortgages and Home Equity Loans Reduce Transferable Value
Financial pressures have led many boomers to tap into their home equity through reverse mortgages or home equity loans. These financial products provide needed cash flow but reduce or eliminate the equity that might otherwise be passed to children. While only 9% of boomers in a Freddie Mac survey said they planned to use home equity to fund retirement, economic necessity often changes these plans as healthcare and living costs rise.
8. Some Boomers Use Their Homes as Bargaining Chips for Care
Some aging parents implicitly or explicitly use their homes as leverage to ensure their children provide care or attention in their final years. This transactional approach to inheritance creates uncertainty about whether the home will actually be transferred and under what conditions, leading to family tensions and complicated estate situations.
What This Means for Future Generations
The reality is that many in Gen X, Millennial, and Gen Z cohorts may need to adjust their expectations about receiving property inheritance. The anticipated wealth transfer may end up in the healthcare system rather than younger generations’ bank accounts. As Kathy Kiersted, a 64-year-old facing high healthcare costs, observes: “There’s no middle class, either you’re upper class or lower class. Children from high-net wealth families will come out of this generational wealth transfer with money, but that’s an upper-class thing, not afforded to every class anymore.”
Are You Prepared for Your Financial Future?
Have you had conversations with your parents about inheritance expectations, or are you a boomer making decisions about your estate? Share your thoughts and experiences in the comments below.
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Travis Campbell is a digital marketer/developer with over 10 years of experience and a writer for over 6 years. He holds a degree in E-commerce and likes to share life advice he’s learned over the years. Travis loves spending time on the golf course or at the gym when he’s not working.
Blended families combine members from previous and current relationships, often leading to complex dynamics and unique challenges in estate planning. To avoid potential disputes and ensure that all family members are treated fairly, it’s crucial to approach a blended family will with thoughtful strategies tailored to the specific needs of your family structure. Below are twelve practical ways to structure a will and manage inheritance in a blended family context.
Begin with open conversations about inheritance planning with all family members involved. Discussing everyone’s expectations and concerns can help prevent misunderstandings and conflicts after your passing. This transparency helps to manage expectations and build trust among family members.
In blended families, fair does not necessarily mean equal. Consider the needs and circumstances of each family member. For example, younger children may need financial support for education, while adult children might benefit more from immediate financial assistance or property.
Clearly specify certain items or amounts of money to go to specific individuals in a blended family will. This can help in balancing out perceived inequalities. For instance, heirlooms, jewelry, or even specific sums of money can be designated to certain children or family members.
Consider purchasing life insurance policies that designate different beneficiaries, which can ensure that both your biological children and stepchildren are provided for.
Instead of distributing all assets at once, consider staggered distributions at different stages of beneficiaries’ lives. This can help in providing support when it’s most needed, such as college funding or down payments on a first home.
Ensure your spouse has sufficient resources to live comfortably if they survive you but also consider the ultimate distribution of remaining assets once your spouse passes away. This might involve trusts or specific directives in your blended family will.
If you have minor children, it’s crucial to specify guardianship clearly in your will. Discuss these decisions with potential guardians to ensure they are willing and able to take on the responsibility.
Make sure to mention all children—biological, adopted, and stepchildren—in the blended family will, even if the inheritance amounts differ. Omitting a child can lead to disputes and feelings of resentment.
As relationships and financial situations evolve, so should your will. Regular updates every few years or after significant life changes (like remarriage or the birth of another child) can keep your estate plan current and relevant.
Given the complexities involved, consulting with an 
Consider including personal letters to explain your decisions regarding the distribution of your assets. These letters can provide context and comfort to family members, helping them understand your choices and reducing potential conflicts.
Estate planning in a blended family requires careful consideration and sensitivity to the individual needs of all members involved. By implementing these twelve strategies, you can create a comprehensive plan for your blended family will that ensures your assets are distributed fairly, supports your family’s long-term well-being, and maintains harmony among loved ones.
