Millennials in Colorado are finally in for a big payoff. It is perhaps convenient to forget, but this generation survived the Great Recession of 2008, are struggling with heavy student loan debt and then face immense criticism for their resulting inability to purchase a home as quickly as their predecessors. However, their big day is finally coming. According to a CNBC article, the greatest wealth transfer in history is about to take place. It will pass $68 trillion on from baby boomers to Generations X, Y and Z.

As of the beginning of 2018, IRA accounts held $9 trillion in capital. Not surprisingly, this is the avenue through which many Americans will inherit money from parents and grandparents. However, failing to handle the transaction correctly can lead to taxes eating up a big portion of that inheritance. Note that there are far stricter rules for non-spouse than spouse beneficiaries.

Baby boomers may need to invest time in teaching younger heirs about IRA accounts. For example, early withdrawals for non-qualifying purposes may invalidate the account. The withdrawals may then be treated as ordinary, taxable income. As tempting as it might be to grow the sum of money in the account with contributions, heirs also need to know that Uncle Sam does not allow contributions to IRA accounts obtained through inheritance.

Rather than leave this up to heirs to figure out, CNBC recommends creating a solid estate plan that leaves no stones unturned. This helps to ensure that the inheritance goes to heirs, rather than end up in the pockets of Uncle Sam due to bad tax moves. One of the biggest oversights people make is forgetting to update their beneficiaries. Baby boomers may also rely on trusts, especially when there are minors involved, such as a grandchild. Finally, make the estate plan as specific as possible to reduce the likelihood of feuds.