COVID 19 Wealth Transfer

COVID-19 coincided with one of the most important events in modern times.

Millions of Baby Boomers were preparing for retirement and to pass their wealth to a new generation, right as the virus and its fallout blindsided the world. Here are three ways that COVID-19 has transformed the largest wealth transfer in history and how this impacts you and your family.

The transfer has accelerated
COVID-19 seems to be more dangerous for people over the age of 65. Of the 231,197 mortalities recorded by the CDC, 183,324 have been of over the age of65+.¹ That’s nearly 80%!

Those numbers represent a staggering amount of tragedy on a personal level. But they also mean that the wealth transfer that’s been predicted for years is off to an early start. Money, resources, and asset values that were supposed to last the 20 to 30 years of retirement for Baby Boomers are now being passed on to Gen-Xers and Millennials.

The transfer has been complicated
The simple fact of the matter is that 44% of Baby Boomers don’t have estate plans.² That means a potentially vast amount of wealth has wound up in the hands of grieving family members who have to make tough choices about how it’s distributed. There was never any doubt that the Great Wealth Transfer might get complicated. But the large number of transfers occurring earlier than expected creating earlier gift tax, tax cost, health care expenses, all at the same time will mean that more families will need guidance and wisdom as they navigate these challenging times.

Special guidance need to be given to families who will need to address taxable estate such as “gift taxes, generation-skipping taxes, and state death tax credits”. (

The transfer has been reduced
Perhaps the largest impact of COVID-19 will be a serious decrease in the size of the Great Wealth Transfer. Experts have estimated that around $68 trillion dollars would be transferred from retiring Baby Boomers to their children.³ But 2020 has been a year of economic upheaval. Shutdowns have transformed our economy and caused high unemployment among older workers. It’s not just employees: nearly 100,000 businesses have shuttered due to the lockdowns. That represents years of hard work suddenly evaporating.

People impacted by these events and who are also approaching retirement age have two choices. They can either work into their late 60s, 70s, and maybe 80s to generate a livable income, or settle for less from their retirement years. It seems reasonable to believe that: Fewer family businesses will pass down to younger generations. The businesses will be worth less than anticipated. Children of employees will have to financially support their aging parents. Early retirees will have less to leave future generations.

What is The future of the Great Wealth transfer?
We still don’t fully understand the extent to which COVID-19 has impacted the Great Wealth Transfer. Only time will tell! But it’s clear that there’s a massive need to guide families through the challenges of estate planning and Wealth Transfer Strategies. There will also be a huge demand for opportunities and business models that allow families approaching retirement to build wealth, and allow them to leave financial legacies through proper wealth transfer planning.

What are some of the Opportunities Amid the Uncertainty?

According to ( “The effects of economic decline and market volatility stemming from the coronavirus give rise to numerous estate planning opportunities.”

( put together this short list to give you an idea of some planning opportunities that are available (Visit to better understand the benefits and learn about the estate planning documents you may need to create):

  1. Direct Gifts. Allows you to transfer wealth at a reduced gift tax cost, while removing all of the appreciation of the transferred asset from your estate. 
  2. Create GRATs. Grantor retained annuity trusts (commonly known as GRATs) are particularly effective in low-interest-rate environments and depressed markets. 
  3. Swap Assets Out of Existing GRATs. If you have a defective grantor trust – your GRAT is “underwater”, you might be able to substitute cash for the lower-value assets and then simply “re-GRAT” those same assets to a different trust.
  4. Refinance Intrafamily Notes. In the current environment, it is possible to refinance those notes at a much lower rate.

What is a GRAT?

A Grantor Retained Annuity Trusts (GRATs) A GRAT is a trust that pays an annuity back to you (the grantor). (

If wealth transfer planning is of interest to you, contact us at or through our website:


¹ “Weekly Updates by Select Demographic and Geographic Characteristics,” CDC, accessed Nov 25, 2020,

² “Baby Boomers Aren’t Creating Estate Plans — What That Means for You,” Robert Kulas, Kulas Law Group, Apr 30, 2020,

³ “Here’s how to prepare your heirs for the $68 trillion ‘great wealth transfer,’” David Robinson, Feb 25, 2019,

⁴ “COVID-19 and retirement: Impact and policy responses,” Martin Neil Baily, Benjamin H. Harris, and Siddhi Doshi, Brookings, Jul 28, 2020,

⁵ “Yelp: Local Economic Impact Report,” Carl Bialik and Daniel Gole, Yelp, Sep 2020,


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