The Great Wealth Transfer: Why Planning Matters More Than Ever

By 2048, an estimated $83.5 trillion (USD) is expected to move from one generation to the next, in what’s become known as the “Great Wealth Transfer.” In Canada, roughly $1-2 trillion is estimated to have passed from baby boomers to Generation X and millennials over the past three years alone.

But this shift isn’t simply about money changing hands. It includes operating businesses, real estate, private investments and family assets—along with the values, expectations and responsibilities attached to them. And while the scale of the transfer is unprecedented, the challenges it creates are familiar.

“It’s unique because it’s the largest ongoing wealth transfer that has ever occurred,” says Russell Feenstra, a wealth advisor at Nicola Wealth. “What stands out isn’t just the size of it. It’s how unprepared many families are for the transition.”

That lack of preparation helps explain why so much wealth fails to endure across generations. The often-quoted statistic that 70 percent of wealth is lost by the second generation, and 90 percent by the third, is rarely the result of taxes alone. More often, it reflects poor planning and limited communication.

Start with Clarity, Not Complexity

For many families, preparation begins with asking two basic but often uncomfortable questions:

• Have you explained “who gets what and why” so your family understands the intent behind your decisions?
• Do your executors and key family members know where important documents are, who your advisors are and how to access digital assets?

Education and communication are the first building blocks of a successful wealth transfer. “Often, family members aren’t necessarily aware of the wealth their parents have,” says Feenstra.

Opening the conversation across generations and bringing the right people together to understand the plan and its implications helps reduce confusion and future friction.

Different generations also tend to approach money differently. A second generation may be more comfortable with risk or innovation, while the first may prioritize capital preservation.

“Getting everyone on the same page, or at least understanding where each other is coming from, is important in avoiding issues later, when a significant amount of wealth is passed on,” he says.

The Advantages of Early Planning

A lack of planning often only becomes visible during moments of stress. If you were to die without a will, do you know who would receive your estate, and would you be comfortable with that outcome? These are practical realities that families face every day. Asking the right questions early can make all the difference:

• If you became incapable, who would pay your bills, manage investments and make health care decisions?
• Have you documented how you want serious illness and end-of-life medical decisions handled?
• How much of your estate could be lost to tax inefficiency without advance planning?

These are practical realities that families face every day.

Where Planning Efforts Typically Focus

According to Feenstra, families usually concentrate on two core areas: estate planning and tax planning, with investment planning acting as the connective link between them.

Estate planning includes reviewing existing structures and documents, such as wills, powers of attorney, and representation agreements, to ensure they still reflect the family’s circumstances and intentions.

“Do they have corporations or trusts that need to be reviewed or modified?” Feenstra says. “That’s all part of properly reviewing the transfer process.”

Tax considerations are equally central. “Any decision often has a tax impact,” he notes. Thoughtful planning can help mitigate the tax impact of a wealth transfer, both in the present and long-term, as well as make family members aware of future taxes. Because outcomes depend heavily on asset types and family structures, advice needs to be specific rather than generic. In some cases, improving efficiency may involve restructuring assets. This can include corporate reorganizations, the use of trusts, estate freezes, or multi-generational insurance planning.

“We’re giving clients specific numbers and developing solutions to pass along wealth in the most tax-efficient way possible,” says Feenstra. “You need to dive deep into the tax planning to make sure you’re covering all the bases. It’s an ongoing process because the tax landscape is ever evolving.”

Supporting the Next Generation

Families are increasingly asking a simple but important question: Are there ways to support the next generation today—whether with a business, a first home or education— without putting their own financial independence at risk?

For many, this support is starting earlier than past generations might expect.

“It’s never too early to start the estate planning process,” Feenstra emphasizes. A lack of planning can lead to rushed or lessthan- ideal decisions during emotionally charged moments, such as illness, death or periods of market stress.

As a result, more families are acting earlier. “In my experience, over the past five to 10 years, it’s become more common for families to pass along a relatively significant amount of wealth while the first generation is still active in retirement,” he says.

Advisors Support Family Dynamics & Family Governance

Wealth transfer planning is deeply personal, and advisors play a critical role in helping families navigate more than just numbers.

“They can act as a strategic advisor,” says Feenstra. “They are often the one individual who can communicate with each family member individually, build trust and also bring everyone to the table.”

That role becomes especially important when family members have different financial realities or expectations. “For example, siblings may be in very different situations,” Feenstra says. “Those differences often require different planning approaches.” Advisors can also partner with legal and tax professionals to ensure the strategy remains cohesive.

Ultimately, wealth transfer planning is not a one-time event. “There’s the plan, but it needs to be monitored, reviewed and updated regularly,” says Feenstra. It also raises an important question for families: Do you have someone helping you facilitate tough conversations and keep everyone aligned? Thoughtful, early planning, supported by a financial advisor’s advice, can reduce friction and help ensure wealth transitions smoothly to the next generation.

Learn more at nicolawealth.com.

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Disclaimer: This material contains the current opinions of the author and such opinions are subject to change without notice. This material is distributed for informational purposes only and is not intended to provide legal, accounting, tax or specific investment advice. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. All investments contain risk and may gain or lose value. Please speak to your Nicola Wealth advisor for advice based on your unique circumstances. Nicola Wealth Management Ltd. (Nicola Wealth) is registered as a Portfolio Manager, Exempt Market Dealer and Investment Fund Manager with the required securities commissions.