Massive Wealth Transfer Underway

Have you ever wondered who can possibly be buying residential real estate as the price of single family homes across Massachusetts soars?Turns out, rich Baby Boomers are giving their younger relatives lots of money now, while they are still alive.  The New YorkTimes reports on the massive wealth transfer that is underway. The "giving while living" trend has resulted in the wealthiest Americans transferring large amounts of their wealth to their offspring so that the offspring can buy houses, boats, investment properties, etc. while they are still relatively young. Many of these millennials have always had access to money, as trust funds were set up for them from birth. So-called "trustafarians" (artsy, hipster types who work as baristas - if they work at all - and manage to live in million dollar housing) are often the ones snapping up real estate in desirable areas.This is happening among the top ten percent of households.Even lower-income families are seeing some wealth transfer to younger people, especially as housing values soar. Those families that own real property (especially if they own it outright with no mortgage) have seen their net worth increase; the same is true for people with stock investments. These parents can help with a down payment on a house or buy their kids a car, all of which helps the next generation have a sound financial footing.For the really wealthy, however, there are huge tax benefits to transferring this wealth to their younger heirs - individuals can transmit $12.9 million and married couples can transmit $26 million to their heirs without federal estate tax kicking in. There are also huge benefits to having wealth held in equities and stock. Middle-class people whose wealth is primarily the equity in their home "pay a wealth tax," according to the Times, by way of property taxes.As the Times article states, "legally approved forms of tax avoidance are the major tool of wealth preservation."Wh