America is on the brink of the largest generational wealth transfer in history. Between 2018 and 2042, an estimated $70 trillion is expected to shift from Baby Boomers and the Silent Generation to their heirs. Of this staggering figure, nearly $24 trillion is tied up in real estate, from farmland to family homes to income-generating properties.

As this seismic shift unfolds, it’s more important than ever for landowners and future heirs to understand its implications and how to plan effectively.

Why This Wealth Transfer is Different

Baby Boomers, once the largest generation in American history, built their wealth during decades of economic expansion, increased homeownership, and rising real estate values. Thanks to advances in healthcare, they’re also living longer than previous generations, often outlasting their retirement savings.

This longer lifespan means older Americans are increasingly looking to real estate as a tool for generating income and preserving wealth. As a result, real estate, especially land, has become a central focus in wealth management and estate planning.

The Role of 1031 Exchanges and Delaware Statutory Trusts (DSTs)

Many landowners are already turning to 1031 exchanges, a powerful strategy that allows them to defer capital gains taxes when selling one property and reinvesting the proceeds into another. In 2022 alone, U.S. real estate sales hit $700 billion, with 10–15% involving 1031 exchanges.

A complementary tool gaining traction is the Delaware Statutory Trust (DST). DSTs enable investors to reinvest in passive, income-generating real estate without the hands-on burden of property management. These solutions offer both financial security and peace of mind for those nearing retirement.

Heirs: Preparing for Wealth Transfer

For the next generation, the wealth being passed down could dramatically alter financial futures. But with opportunity comes responsibility. One key concept to understand is the “step-up in basis,” which allows heirs to inherit real estate at its current market value. This can significantly reduce or even eliminate capital gains taxes if the property is sold immediately after inheritance.

However, for those considering holding onto inherited property, thoughtful planning becomes even more critical. Questions about diversification, long-term tax strategies, and market conditions need to be addressed with the help of trusted financial and legal advisors.

Take Action Now

Whether you’re preparing to pass on your land or are set to inherit property in the years ahead, proactive planning is essential. Start by building a team that includes your financial advisor, attorney, and a local Land Professional who understands both the land market and your personal goals.

The wealth transfer is already underway, so make sure you’re not caught off guard! With the right strategies, this transition can be more than just a transfer; it can be the beginning of your legacy.

Have questions about your land and legacy? Contact your local Land Professional today to get started.