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- It’s projected that $84 trillion will be passed down in the ‘great wealth transfer’ by 2045—but the timeline could change if an economic downturn hits. JPMorgan economists have raised the probability of a U.S. recession this year up to 40%—here are the deciding factors experts say will sway the speed of monetary gifting.
America’s retirees and baby boomers are holding onto a mountain of wealth, but that will all change in the next couple decades. A possible recession could speed up or slow down the timeline of the ‘great wealth transfer’ depending on three key factors.
“The older generations are actively passing on wealth. Those things are going to happen, whether there’s a recession or not,” Emily Irwin, head of the advice center at Wells Fargo, tells Fortune.
It’s expected that $84 trillion will pass down from older generations to their Gen X, millennial, and Gen Z counterparts by 2045, according to a report from Cerulli Associates. JPMorgan economists have also projected that there’s a 40% chance of a U.S. recession this year, as Trump’s tariffs have shaken up businesses and stocks have plummeted. Experts contend that a downturn could affect when money is transferred, depending on a few details.
How long a recession lasts, how liquid an individual’s wealth is, and goals tied to gifting will all impact the great wealth transfer during a recession. Financial experts say that it really depends on the contributor’s specific situation; if they want to give money to their families to support them, a period of economic downturn may speed up the transfer process. Plus, if their assets are more liquid—and they don’t have to sell assets, when markets are down—they may be more incentivized to transfer cash sooner. But if they’re stuck in the middle of a recession with no end in sight, they may be de-incentivized from gifting.
A recession’s impact on inheritance and philanthropy runs on a case-by-case basis—but experts say there is a clear group of people who would come out of a downturn victorious.
“The winners are people that have a lot of wealth and take advantage of a low market in terms of accelerating gift strategies, and the potential appreciation that will be taken out of their estate,” Susan Hirshman, director of wealth management for Schwab Wealth Advisory, tells Fortune. “The people that may be more challenged are those whose wealth surplus is not extreme, and are concerned about a market going down and healthcare costs going up significantly.”
Reasons why the richest may speed up their wealth transfer
The silent generation and baby boomers may be stockpiling wealth, but when another person’s financial woes hit close to home, they might be willing to give faster. Irwin says that goal-based gifting can tug on the heartstrings of donors—especially during a recession.
“We have seen in recent years [that] individuals have a propensity towards wanting to give their money away, whether it’s to the next generation or other charitable organizations,” Irwin says. “Very often that goal is tied to some sort of personal, family, or community impact. And the personal might just be: ‘It’s time. I want to do good [on] the family impact, I want to actually alleviate some financial stress in the rising generation and for the community.’”
On the other hand, those who may feel like their funds can’t hold up during a recession may shy away from opening their wallets.
“By contrast, [if] we see the recession hit in a way where there’s more market assets going down, then we may get a slower gifting strategy, because the generation of donors may feel like their portfolio has really been affected,” Irwin says.
Based on the reasoning behind gifting money, Irwin says a recession would either maintain the projected timeline or expedite giving among well-off donors. If an older generation sees their family member struggling to make ends meet with stagnant wages and rising prices, they might transfer money sooner. But there’s another time-based contingency with donating: how long an economic downturn lasts, and if they have time to recuperate after.
“The key is [the] time frame. When we go into recession, for people who have great wealth, there’s opportunity. We can transfer assets when they’re at low value, we have the time for recovery and future appreciation to be passed on to the estate and gifts tax-free,” Hirshman says. “There’s a benefit to markets going down, if you have the time and the wealth.”
The Schwab advisor adds that for those who are not as wealthy, the real concern is having time to recoup. If a recession drags on for years and a donor is unsure when the market can come up for air, they’ll likely delay gifting, or defer entirely until they pass away. The main prerogative is to ensure that they outlive their wealth and aren’t hit with surprise costs that drive them into the ground.
Liquidity also plays a hand in the speed of the great wealth transfer during a recession. If an individual’s money is tied up in non-liquid assets—like real estate, cars, and art—they may shy away from giving away a chunk of their wealth. Those who primarily have cash on hand, stocked bank accounts, mutual funds, and money market accounts may be more inclined to give sooner.
“The most important thing is not having to sell your assets in times of extreme market crisis. You stay invested, so that when the market does recover, you’re there to participate,” Hirshman says. “What we say is it’s really important to look at: Am I liquid? Do I have enough cash on hand to be able to support my expenses, and withstand a downturn in the market?”
This story was originally featured on Fortune.com
https://fortune.com/img-assets/wp-content/uploads/2025/03/GettyImages-76119970-e1742845053229.jpg?resize=1200,600 https://fortune.com/2025/03/25/great-wealth-transfer-us-recession-inheritance-donating-impacts/Emma Burleigh
