The Great Wealth Shift: Transforming Financial Legacies

The U.S. is on the brink of the largest intergenerational wealth transfer in history, with $84–$124 trillion set to change hands over the next two decades. Baby Boomers and the Silent Generation will pass their wealth primarily to Gen X, Millennials, and Gen Z, with approximately $72–$105 trillion going to heirs and the remainder to charities. This transfer will significantly reshape financial services, insurance, real estate, and technology, creating major opportunities for businesses that help facilitate and optimize the transition.

The sheer scale is unprecedented and will reshape asset ownership across the economy (see Figure 1).

‍

Figure 1: Estimated U.S. Inherited Wealth Through 2045 by Generation. Baby Boomers will pass a relatively small amount (many are receiving wealth from the prior generation), while Gen X and Millennials stand to inherit the bulk of the $84 trillion transfer​

‍

Key Sectors Impacted:

• Insurance & Wealth Protection: Enabling Security and Intergenerational Planning
  
  • Life insurance, annuities, and estate planning products will play a critical role in wealth transfer by ensuring heirs receive funds efficiently and with minimal taxation.
  • Insurers are integrating financial planning, digital estate tools, and intergenerational wealth advisory services to retain customers and their heirs.
  • AI-driven and embedded finance solutions will help automate policy management and wealth distribution.
• Fintech & Wealth Management: Digital-first, AI-powered financial tools
  
  • Younger inheritors prefer digital platforms over traditional financial advisors, favoring AI-powered financial guidance, robo-advisors, and automated tax optimization.
  • The wealth management industry is shifting from human-led advice to hybrid AI-driven models that integrate tax strategy, estate planning, and investment automation.
  • Platforms like Betterment, Wealthfront, and Trust & Will are already reshaping how financial assets are managed and transferred.
• Real Estate & Home Ownership: The Silver Wave in Property and Infrastructure Needs
  
  • Boomers hold $20 trillion in real estate assets, many of which will be passed down or sold by heirs.
  • Services that streamline inherited property sales, rental management, and co-ownership are in demand.
  • Fintech-enabled home equity solutions will allow older homeowners to transfer wealth while living, reducing financial burdens on heirs.
• WealthTech & Digital Infrastructure: Building the Pipes for Seamless Transitions
  
  • The need for seamless asset transfers, real-time tracking, and secure estate management is driving the rise of data aggregation, API-driven financial platforms, and AI-powered estate automation.
  • Blockchain and smart contracts could revolutionize the inheritance process, enabling secure, automated asset transfers without legal friction.
  • Companies like Envestnet and Plaid are leading the charge in financial data connectivity, allowing financial institutions to integrate wealth transfer services.

‍

Where is the money going?

As the wealth transfer accelerates, significant shifts in capital allocation are already underway. Here are the key capital flow trends we see: 

1. Industry Convergence: Insurance, banking, and fintech are merging, with insurers acquiring wealth management firms and banks integrating digital estate planning.
2. Tech-Driven Transformation: AI and automation are making estate planning, wealth advisory, and real estate inheritance more scalable and cost-effective.
3. Next-Gen Investor Preferences: Millennials and Gen Z favor alternative assets, digital investing platforms, and impact investing, shifting capital flows away from traditional financial models.
4. Venture Capital & M&A Growth: Startups in estate planning, digital wealth advisory, and real estate tech are prime acquisition targets for incumbents looking to modernize.

With trillions set to shift hands over the coming decades, key industries are evolving to capture and manage this wealth effectively. The following sectors—insurance, wealth management, real estate, and financial technology—are at the forefront of this transformation, each playing a crucial role in shaping the future of inherited asset

1. Insurance (Life & Wealth Transfer Products)

• Market Size: The U.S. life insurance and annuities industry has ~$1 trillion in annual premiums and $4.7 trillion in assets under management (AUM).
• Key Players: Northwestern Mutual, New York Life, MetLife, Prudential, MassMutual dominate the life insurance and estate planning space.
• Trends & Capital Flows:
  
  • Increased demand for permanent life insurance, annuities, and tax-efficient estate planning solutions.
  • Growth in insurtech startups such as Ethos and Bestow, which modernize life insurance distribution.
  • Incumbents are acquiring fintech startups to expand digital wealth and legacy planning services.

2. Wealth Management & Fintech

• Market Size: U.S. wealth management handles $62 trillion in AUM, projected to grow to $85 trillion by 2028.
• Key Players:
  
  • Traditional Firms: Morgan Stanley, Merrill Lynch (Bank of America), UBS, Vanguard, Fidelity, Schwab.
  • Fintech Startups: Betterment, Wealthfront, Personal Capital/Empower, robo-advisors, and financial planning platforms.
• Trends & Capital Flows:
  
  • A shift toward hybrid AI-human advisory models.
  • Increasing M&A activity: Morgan Stanley acquired E*Trade and Eaton Vance, while MassMutual invested in fintech startups.
  • The rise of estate planning fintech (e.g., Trust & Will, Wealth.com) to provide digital estate solutions.

3. Real Estate (Residential & Proptech)

• Market Size: U.S. residential real estate is valued at $40–$50 trillion, with $20 trillion held by Baby Boomers.
• Key Players:
  
  • Traditional Platforms: Zillow, Redfin, Realtor.com, Opendoor.
  • Emerging Proptech: HomeLight, Sundae, Arrived Homes, Properly.
• Trends & Capital Flows:
  
  • Boomers aging in place is delaying real estate turnover, but a surge in estate sales is expected in the 2030s.
  • Investment in HELOCs, bridge loans, and reverse mortgage solutions to help heirs manage inherited properties.
  • Rising interest in fractional real estate ownership and tokenized real estate investment.

4. WealthTech Infrastructure & Digital Identity

• Market Size: WealthTech infrastructure spans data aggregation, banking APIs, digital identity, and estate automation.
• Key Players:
  
  • Data Aggregators: Plaid, Yodlee, MX (open banking platforms enabling wealth transfers).
  • WealthTech Platforms: Envestnet, Orion Advisor, Vanilla, Trustate (estate administration tech).
  • Digital Identity & Security: Trulioo, Alloy, OneTrust (protecting financial transfers and inheritance data).
• Trends & Capital Flows:
  
  • Increased demand for estate data APIs to streamline financial account transitions.
  • AI-powered estate settlement solutions like Trustate are reducing the complexities of probate.
  • M&A and strategic investments: Large institutions acquiring fintechs that simplify beneficiary management, wealth transfers, and digital estate planning.

Future Trends & Industry Evolution: The Next 20 Years of Wealth Transfer

5–10 Year Outlook 

1. Peak Years of Wealth Transfer

• Baby Boomers (born 1946–1964) will reach their 80s, increasing estate settlements and asset transfers.
• Financial institutions will need dedicated wealth transition teams to retain assets and engage heirs.

2. AI and Automation in Wealth Management

• AI will streamline estate planning, tax optimization, and financial advice, reducing reliance on traditional advisors.
• "Robo-trustees" may emerge, automating trust management and inheritance distribution.

3. Digital Estate Planning Becomes the Norm

• Electronic wills, AI-powered probate tools, and blockchain-based estate registries will gain mainstream adoption.
• Governments may standardize digital estate policies, making online wills and automated asset transfers legally binding.

4. Rise of Alternative Investments

• Millennials and Gen Z favor crypto, private equity, and impact investing, shifting wealth away from traditional assets.
• Fractional real estate ownership and crowdfunded investments will grow as heirs seek diversified asset exposure.

5. Integration of Insurance & Wealth Management

• Life insurance providers will evolve into holistic wealth planning platforms, bundling estate planning, annuities, and investment advice.
• Embedded finance models will make inheritance planning a standard feature in digital banking and investment apps.

Long-Term Industry Evolution 

1. AI-Driven Financial Ecosystems

• AI will serve as fiduciary advisors and digital trustees, managing inherited wealth with personalized, tax-efficient strategies.
• Heirs will rely on fully automated financial planning platforms, reducing human advisor dependency.

2. Digital & Blockchain-Based Inheritance

• Smart contracts and tokenized assets will enable instant wealth transfers, bypassing traditional estate processes.
• Real estate, stocks, and even businesses could be fractionalized and inherited via blockchain, reducing legal friction.

3. Policy & Regulatory Shifts

• Potential inheritance tax reforms could shape estate planning strategies, incentivizing "giving while living".
• Global standards may emerge for cross-border estate management, simplifying international inheritance.

4. Longevity and Wealth Transfer Delays

• Medical advancements may extend life expectancy, shifting inheritance patterns as people live longer.
• Retirement planning will integrate with estate planning, requiring financial products that balance long-term care costs with legacy preservation.

5. Transformation of Financial Services

• By 2045, digital wealth management will dominate, with banks and insurers providing all-in-one financial solutions.
• Big tech (Apple, Google, Amazon) may enter the wealth transfer space, integrating inheritance planning into their ecosystems.
• Financial security & identity verification will be biometric-based, ensuring safe and seamless wealth transfers.

What we’re excited about: Investment & Innovation Opportunities

1. Insurance & Wealth Protection Innovations

• Digital Life Insurance & Estate Planning Integration:
  
  • Investment Opportunity: Platforms that simplify policy issuance and incorporate AI-driven estate planning.
  • Example: Startups like Ethos, Bestow, and Ladder are modernizing life insurance with instant approvals and digital policies.
  • Future Potential: Insurers may partner with estate planning fintechs to offer bundled services, ensuring seamless policy transfers.
• Intergenerational Insurance Products:
  
  • Investment Opportunity: New policy models that dynamically adjust coverage as wealth is transferred.
  • Example: Policies that automatically transfer to heirs or integrate with family trusts to preserve wealth tax-efficiently.
  • Potential Exit Strategy: Acquisition by major insurers looking to modernize legacy products.
• Longevity & Retirement Security Solutions:
  
  • Investment Opportunity: Platforms helping retirees preserve wealth while ensuring financial security.
  • Example: AI-driven annuities and hybrid long-term care & life insurance products.
  • Investor Interest: Growing demand for “Retirement WealthTech” among both VC and insurance incumbents.

2. Fintech & Wealth Management Disruptions

• AI-Powered Financial Coaching for Inheritors:
  
  • Investment Opportunity: AI-driven platforms offering personalized financial guidance for heirs.
  • Example: A mobile app where a user enters “I’m inheriting $500K—what should I do?”, and AI provides customized recommendations.
  • Potential Business Model: Subscription-based financial planning or embedded wealth services in digital banking apps.
• Next-Gen Family Office & Wealth-as-a-Service:
  
  • Investment Opportunity: A mid-market family office alternative providing coordinated tax, investment, and estate planning for heirs.
  • Example: A hybrid advisory model combining robo-advisory, AI-driven estate planning, and tax-optimized investment management.
  • Potential Market: Households inheriting $1M–$10M, traditionally underserved by private banks.

• Estate Planning & Probate Automation:
  
  • Investment Opportunity: Platforms that digitize and streamline estate planning and probate.
  • Example: Trust & Will, Wealth.com, and Vanilla offer digital will creation and automated estate settlement.
  • Investor Interest: LegalTech startups tackling complex estate transitions and probate inefficiencies are attracting VC funding.
• Tax Optimization & Inheritance Planning Fintech:
  
  • Investment Opportunity: AI-powered tax advisory platforms helping heirs manage estate taxes, capital gains, and inheritance strategies.
  • Example: Tools that analyze financial data to optimize gifting, trust structures, and Roth conversions.
  • Scalability: B2B SaaS platforms can sell to financial advisors and estate planners.

3. Real Estate & PropTech Innovations

• Inherited Home Liquidity Services:
  
  • Investment Opportunity: Platforms that streamline inherited property sales for heirs.
  • Example: A "Zillow for estates" offering instant home valuation, legal document automation, and cash offers from institutional buyers.
  • Potential Business Model: Fee-based or transaction percentage, with additional services for probate assistance.
• Fractional Inheritance & Co-Ownership Platforms:
  
  • Investment Opportunity: Platforms that help multiple heirs manage inherited real estate without forced sales.
  • Example: A digital platform where siblings can decide to keep, rent, or sell their inherited home via tokenized ownership shares.
  • Market Potential: Addresses growing demand for real estate investment without direct ownership burdens.
• Home Equity to Inheritance Products:
  
  • Investment Opportunity: Fintech solutions enabling Boomers to pass down home equity while retaining living rights.
  • Example: A "Graduated Inheritance Mortgage" where homeowners release partial home equity to heirs while keeping ownership.
  • Exit Potential: Strategic M&A by mortgage lenders, real estate investment firms, or fintech platforms.

4. WealthTech Infrastructure & Digital Identity

• Unified Inheritance Platforms (B2B2C):
  
  • Investment Opportunity: A secure platform offered by banks, insurers, and wealth managers to handle inheritance logistics.
  • Example: A digital legacy vault where users store estate documents, financial accounts, and designated beneficiaries.
  • Potential Partners: Banks, insurance firms, fintech platforms seeking to increase customer retention across generations.
• Estate & Beneficiary Data APIs:
  
  • Investment Opportunity: APIs that connect to government death records, financial accounts, and legal documents to automate estate transitions.
  • Example: A “DeathTech API” that instantly verifies death, notifies financial institutions, and processes asset transfers.
  • Scalability: Sold as a SaaS tool to insurance companies, banks, and estate planning firms.
• Trust & Entity Management Software:
  
  • Investment Opportunity: Software to automate the creation, funding, and tracking of trusts for wealth transfer.
  • Example: A “Carta for Trusts”—digitizing trust administration for attorneys, financial advisors, and family offices.
  • Market Potential: Trusts manage $50+ trillion in wealth, and automation can significantly reduce administrative costs.
• Fraud Prevention & Identity Security in Wealth Transfers:
  
  • Investment Opportunity: AI-driven fraud detection tools to prevent elder exploitation and estate fraud.
  • Example: A machine learning platform monitoring elderly financial accounts for unusual withdrawals, fraud risks, and unauthorized account changes.
  • Potential Exit Strategy: Acquisition by banks, fintech security firms, or wealth management platforms.

Key Investment Themes & Takeaways

• AI & Automation in Wealth Management:
  
  • The demand for AI-driven financial planning, robo-advisors, and automated estate planning is growing rapidly.
  • Firms integrating AI + tax + estate + investment planning into a single platform will dominate.
• Embedded Finance & Wealth Services:
  
  • Digital banking & insurance platforms will offer built-in inheritance planning, creating a seamless financial ecosystem.
  • Expect partnerships between banks, fintechs, and insurtechs to expand wealth transfer services.
• Real Estate Inheritance Tech & Liquidity Solutions:
  
  • Heirs need fast, efficient real estate solutions to handle inherited homes, rental properties, and co-owned estates.
  • Fractional real estate, instant liquidity tools, and estate sale automation will see strong demand.
• Digital Identity & Security for Wealth Transfers:
  
  • Blockchain-based asset tracking, biometrics for inheritance authentication, and fraud prevention AI will ensure secure wealth transfers.
  • EstateTech startups tackling legal, tax, and regulatory complexities will attract institutional investors.
• Multi-Generational Financial Ecosystems:
  
  • Future winners will build lifetime customer relationships, starting from inheritance planning to wealth accumulation and distribution.
  • Expect hybrid models combining traditional financial services with digital-first experiences.

If you’re a founder building in any of these areas we’d love to hear from you! Please reach out to Nia / Matt at nia@montageventures.com, matt@montageventures.com