Economic Tidbits

$100 Billion in Wealth Transition . . .

The Nebraska Community Foundation (NCF) projects more than $100 billion in Nebraska wealth will pass to the next generation over the next 10 years. The findings come from the NCF’s 2021 Nebraska Transfer of Wealth Study. Regional transition estimates can be seen in Figure 3. Over 50 years, the NCF projects the transition will swell to $950 billion. Wealth is defined as real estate, securities, retirement accounts, and other assets. The 2021 study is the third conducted by NCF. The first county-by-county analysis of wealth transfer was completed in 2002. In 2011, an update was completed.

Figure 3. Transfer of Wealth Next 10 Years

Source: Nebraska Community Foundation, 2021 Nebraska Transfer of Wealth Study

NCF notes most of the wealth transfer will go to heirs, but due to outmigration, much of the wealth could move out of communities from where it was accrued. NCF fears that once the wealth leaves a community, the opportunity for investment in the community becomes more and more unlikely. NCF’s findings underpin a Tidbits story last month on the transition of farm operation which will occur in Nebraska agriculture over the next 10-20 years (https://www.nefb.org/10/04/2021/transitioning-to-the-next-generation/). Of producers who reported sales of agricultural products of more than $250,000 in 2017, 57 percent are 55 years or older and 24 percent are 65 years or older. These demographics along with the NCF work point to a significant number of Nebraska’s most productive farm and ranch operations being transitioned to new owners or operators over the next 10-20 years. How it happens will be determined farm-by-farm, operation-by-operation, and family-by-family. Collectively, though, the wealth transfer and farm transition will determine the future of agriculture in Nebraska.

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