There is a financial event unfolding in Ireland that will have a greater impact on families than interest rates, inflation or stock markets yet very few people are talking about it.
Over the next twenty years, Ireland will experience the largest transfer of wealth between generations in our history. Economists call it “The Great Wealth Transfer.”
Most people simply call it inheritance.
But this is about much more than who gets the family home when a parent dies. It is a profound shift in wealth, opportunity and financial responsibility that will shape the lives of millions of people. For decades, Irish families have quietly accumulated wealth. Houses bought in the 1970s, 1980s and 1990s have increased significantly in value. Pensions have grown. Savings have accumulated. Businesses have been built. Farms have been passed down through generations.
Many of those assets are now held by people in their sixties, seventies and eighties. Over the coming years, that wealth will begin moving to their children and grandchildren. The sums involved are enormous.
For many families, the family home alone may represent an asset worth €500,000, €750,000 or even over €1 million. Add pensions, investments, savings and business interests and it becomes clear that the transfer of wealth between generations will be one of the defining economic stories of modern Ireland.
But the conversation shouldn’t be about money alone. It should also be about expectations. One of the most significant changes I have observed during my career is the growing expectation of inheritance. Previous generations often viewed inheritance as a welcome surprise. Today, many people subconsciously build it into their future plans.
Some expect it will help them retire. Others assume it will help clear a mortgage. Many younger people believe it may be their only realistic route to buying a home. The challenge is that inheritances rarely arrive when people expect them to.
A healthy 65-year-old today could easily live into their late eighties or nineties. That’s wonderful news from a societal perspective, but it changes the financial equation. Many people in their fifties are waiting for an inheritance from parents who may still have another twenty or thirty years ahead of them. By the time wealth passes down, the recipients may already be approaching retirement themselves.
This raises an interesting question. Should wealth always transfer at death?
Increasingly, many families are deciding the answer is no. Parents are choosing to help children and grandchildren during their lifetime rather than waiting until they die. We see this every day. Parents helping with house deposits. Grandparents contributing towards education costs.
Families providing financial support to help adult children establish themselves. There is a certain logic to this. A gift of €50,000 to a thirty-year-old trying to buy their first home may have a far greater impact than the same inheritance arriving twenty-five years later.
But lifetime gifting is not without risk.
One of the biggest financial planning mistakes I see is parents putting their own financial security at risk in an effort to help their children. The desire to help family is entirely understandable. Most parents would move mountains for their children. However, there is a delicate balance between generosity and self-sacrifice. The first financial responsibility of any parent is to ensure they will not become financially dependent on their children later in life. Helping the next generation should never come at the expense of your own financial security.
The Great Wealth Transfer is also creating a new challenge for what is often referred to as the “sandwich generation.” These are people in their forties and fifties who find themselves supporting children while simultaneously helping ageing parents.
For the first time in Irish history, many people are providing financial support both upwards and downwards at the same time. Adult children are staying at home longer. Parents are living longer. Care costs are increasing. Housing remains expensive. As a result, many families are experiencing financial pressures that previous generations never encountered.
This is why the conversation about wealth transfer is ultimately a conversation about planning.
Not tax planning. Not investment planning. Life planning.
Families who communicate openly about money tend to navigate these transitions more successfully than those who avoid the discussion altogether. That doesn’t mean sharing bank statements around the kitchen table. It means having honest conversations about intentions, expectations and responsibilities.
Who will care for ageing parents? How should wealth be distributed fairly? What support can realistically be provided? What financial security do parents need for themselves? These are not always easy conversations, but they are increasingly important ones.
The Great Wealth Transfer will undoubtedly create opportunities for many families. It will help some buy homes, start businesses, educate children and achieve financial security. But perhaps its greatest impact will be forcing us to rethink the relationship between money, family and responsibility.
Because at its heart, wealth transfer isn’t really about wealth at all.
It’s about people. It’s about the values we pass on, the opportunities we create and the legacy we leave behind. And that is a conversation worth having long before a will is ever read.
