Olivet The Magazine | The Largest Transfer of Wealth in History & How to Give it Twice

Over the next decade, the world will witness the largest transfer of wealth in human history. Trillions of dollars are expected to shift hands, primarily from the Baby Boomer generation to younger heirs. This unprecedented transfer, which some estimates project to exceed $68 trillion in the United States alone, presents both significant challenges and opportunities.

The Baby Boomers, born between 1946 and 1964, are currently the wealthiest generation, having benefited from decades of economic growth, homeownership and stock market investments. As they age, they are passing on their accumulated wealth to their children and grandchildren, known as Generation X and Millennials. This transfer will occur primarily through inheritances, trusts, charitable donations and estate planning.

While this transfer of wealth will undoubtedly bolster the financial portfolios of younger generations, it also raises questions about how this wealth will be used. Will heirs maintain the same philanthropic intent as their parents and grandparents? And, perhaps more importantly, how will this sudden influx of wealth impact them personally?

As Baby Boomers plan for their financial legacy, a number of planned giving options should be considered. To ensure that heirs receive the benefit of one's accumulated wealth and to continue a legacy of supporting specific nonprofit organizations like Olivet Nazarene University, a charitable remainder trust is a great option. A Give It Twice Charitable Remainder Trust (CRT) is an estate planning strategy designed to benefit both family members and charitable organizations. It is commonly used by people who want to provide income to their heirs for a set period of time and then leave the remaining assets to charity.

How It Works

1. Initial Gift to the Trust

An individual (the grantor) transfers assets (such as cash, stocks or property) into a CRT. The trust sells any appreciated assets (if applicable) - typically without incurring immediate capital gains taxes - and reinvests the proceeds.

2. Provided Income to Family (Heirs)

The trust then provides income to designated beneficiaries (often, children) for a specified period (typically, 10 to 20 years). The beneficiaries receive income - usually a fixed percentage of the trust's assets - annually.

3. Charitable Remainder

After the income term ends (e.g., when the beneficiaries pass away or the period specified ends), the remaining assets in the trust are donated to a charity or multiple charities of the grantor's choosing.

Give It Twice

The term "Give It Twice" refers to how the trust can benefit heirs first and then "give" again by benefiting charity afterward. Essentially, the wealth gets distributed twice:

• The first "give" is to the heirs through the income provided for a period of time.
• The second "give" is when the trust terminates, leaving the remainder to a charity or multiple charities.

Advantages

Tax Benefits: The trust offers significant tax advantages, including an immediate charitable deduction for the grantor and deferral of capital gains taxes on appreciated assets.

• Income Stream: It allows the grantor to provide a steady income stream for family or other heirs.
• Philanthropic Legacy: The grantor can then support favorite charities after heirs benefit from the trust.

For more information about a Give It Twice Charitable Remainder Trust or other ways to support the ministry of Olivet Nazarene University, contact the Office of Development at 815-939-5171 or [email protected]. To learn more about planned or estate giving, visit Olivetpgc.org.

From Olivet The Magazine, The God Who Sees Us - Winter 2025. Read the full issue here.

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