.svg){kind=icon}
Changing Generations, Changing Real Estate Needs
What demographic trends could mean for retirement and estate planning
Over the next two decades, a significant amount of wealth is expected to change hands as Baby Boomers and the Silent Generation age and begin transferring assets to younger generations. According to ExchangeRight’s 2025 Demographic Outlook, these two generations hold approximately two-thirds of the nation's wealth, including more than $23 trillion in real estate. As more Americans enter retirement, the way they manage their investments and plan for the future may begin to change.
Real estate is an important part of this transition. Many investors have owned properties for decades, and those properties may have appreciated considerably over time. Selling a property can create tax considerations, including potential capital gains taxes and depreciation recapture. For individuals who are moving away from actively managing real estate, understanding the available options for managing these assets is an important part of retirement and financial planning.
A 1031 exchange is one strategy investors may explore when considering the sale of qualifying investment property. Under certain conditions, it allows an investor to defer capital gains taxes by exchanging one investment property for another qualifying property. A Delaware Statutory Trust (DST) is one structure that may be used in a qualifying 1031 exchange. DST investments allow investors to hold a fractional interest in real estate without directly managing the property. However, these investments have specific requirements, risks, holding periods, and liquidity limitations that should be understood before proceeding.
Estate planning is another important consideration as wealth transfers between generations. ExchangeRight estimates that approximately $75 trillion to $84 trillion in wealth could transfer to Millennials and Generation X by 2045. For families with real estate holdings, this makes it important to understand how property ownership, beneficiary arrangements, estate documents, and potential tax implications fit together. Planning ahead can help families understand how assets may be handled and transferred according to their wishes.
Retirement often brings changes in income needs, investment responsibilities, and financial priorities. Reviewing real estate holdings alongside retirement income planning and estate planning can help investors better understand their overall financial picture. Each person's circumstances are different, and decisions involving real estate, tax deferral, and estate transfers should be reviewed with qualified financial, tax, and legal professionals.
If you have questions about how changes in retirement, real estate ownership, or estate planning may affect your financial picture, contact Verus Financial Group to schedule a review with your advisor.
Source: ExchangeRight, 2025 Demographic Outlook. The demographic and wealth-transfer figures above are estimates presented in the source document, not independently verified projections.
The information presented in this article is provided for educational purposes only. The article includes a discussion of Delaware Statutory Trusts ("DSTs") and other real estate-related investment structures with ExchangeRight. The information presented does not constitute an offer to sell, or a solicitation of an offer to buy, any security, including any DST interest. DST interests are securities offered only pursuant to a Private Placement Memorandum to accredited investors and are subject to significant limitations. DSTs are not suitable for all investors and involve a substantial degree of risk. Verus Financial Group is not affiliated with and does not receive compensation from ExchangeRight in connection with the material presented here. Advisory services are offered through Verus Financial Group, an investment adviser registered with the U.S. Securities and Exchange Commission.
.svg)
