Riding the First Wave of the Wealth Transfer 

We often focus on the massive wealth transfer from baby boomers to their children and grandchildren. But the first—and often overlooked—step is what happens when one spouse, usually the husband, passes away. The assets must first pass to the surviving spouse, with as much as $40MM projected to transfer to widows.¹

Why the First Transfer Matters 

This first step is critical. It’s the moment when a financial plan is put to the test. Estate documents come into play. And the surviving spouse—often less involved in the finances—must take the lead in preserving and eventually passing on the family’s legacy. 
 
Both spouses need to be prepared for this. A colleague recently shared how she and her husband fired their financial advisor. Despite her being the one asking the questions, the advisor always directed answers to her husband. That lack of respect and engagement cost him the relationship. Advisors can lose clients not just in the transition to the next generation that is talked about so often in this context, but also in this first transition: Even if they hadn’t fired him, she likely wouldn’t have stayed on if she were left widowed.

Stage 1: Husband to Surviving Spouse 

Many baby boomer households still follow traditional financial roles, with the husband managing the money. Without good planning, this first transition can be jarring. Key areas to address include: 

• Asset Titling & Beneficiaries 

• • Make sure assets are titled correctly (individual, joint, trust-owned). 

• • Update beneficiary designations on IRAs, annuities, and insurance. 

• Surviving Spouse Preparedness 

• • Understand the spouse’s financial literacy and comfort with decisions. 

• • Provide education and guidance throughout the transition. 

• Income Continuity 

• • Plan for the possible loss of Social Security or pension income. 

• • Revisit RMDs, annuity income, and investment withdrawals. 

• Tax Planning 

• • Prepare for the “widow’s penalty” when filing status changes to single. 

• • Take advantage of step-up in basis and tax-loss harvesting. 

• Estate Document Review 

• • Update wills, powers of attorney, and healthcare directives. 

• • Adjust trustees and distribution plans as needed. 

Stage 2: From Surviving Spouse to the Next Generation 

Once the surviving spouse takes control, attention turns to passing wealth to children or other heirs. This phase is easier when both spouses have planned together in advance. Advisors can offer the most value by supporting this next stage: 

• Heir Readiness & Family Dynamics 

• • Encourage open conversations about roles, values, and expectations. 

• • Address challenges like blended families or unequal gifts. 

• Trust Planning & Control 

• • Use revocable or irrevocable trusts for control and protection. 

• • Consider tools like QTIPs, ILITs, and charitable trusts. 

• Tax Efficiency & Liquidity 

• • Assess exposure to estate taxes (especially state-level). 

• • Plan for liquidity needs, particularly for real estate or business assets. 

• Philanthropy & Legacy Goals 

• • Leverage donor-advised funds, family foundations, or CRTs. 

• • Align charitable giving with overall tax and estate plans. 

• Health & Capacity Planning 

• • Account for long-term care needs. 

• • Put protections in place for cognitive decline (e.g., POAs, trust protectors). 

The Big Picture 

The two-step wealth transfer—from spouse to spouse, then to the next generation—is central to legacy planning for baby boomers. Advisors who proactively guide clients through both transitions, engage both partners early, and foster family conversations will earn lasting trust. 
 
Helping clients navigate the first loss lays the groundwork for a smoother, more confident second transition—with greater clarity, control, and peace of mind. 

¹ https://www.cerulli.com/press-releases/54-trillion-will-transfer-to-widows-through-2048-more-than-95-will-go-to-women