The flashback doesn't end til the end of act two, when the story time at the beginning of the movie is reached. Act Three, then, is mainly George learning what the world would be like without him: Bedford Falls would be named Pottersville, a town full of bars; the druggist he saved from catastrophe would be an ex-con and rummy; his house would be abandoned, never renovated; his uncle would be in an insane asylum; his little brother would have died at 9, because George never rescued him, and therefore all the men the brother saved in the war would also have died; and his wife Mary would be an old-maid librarian.
This is a difficult structure that in less skilled hands would have been disastrous but it works beautifully here because interest in the movie never wanes and because the focus - Clarence's charge to save George - is never far from our attention.