Ultra wealthy to transfer $16 trillion over three decades
The global ultra-high net worth population is set to transfer more than $16 trillion (€13.8 trillion) to the next generation over the next three decades in what will be the largest wealth transfer in history, according to a new report.
The inaugural Wealth-X and NFP Family Wealth Transfers Report of 100,000 individuals claims the wealth transfer comes as a result of an ageing population of entrepreneurs, who are only now beginning to implement their succession plans.
A further $6 trillion, concentrated in the ownership of privately-held businesses (companies whose stock is not publicly traded), is also set for transfer, but the report claims many heirs will sell their companies in order to release more cash.
"A significant number of heirs of UHNW individuals will not want to take over the responsibility of running these companies on a day-to-day basis, and this will lead to large opportunities for sales and public offerings of these companies,” the report read.
The US, home to the largest billionaire population, will see the largest amount of wealth transferred, with $6 trillion set to change hands over the next 30 years.
Philanthropic bequests are expected to form a large part of the upcoming wealth transfer, with more than $300 billion in charitable donations predicted for the next three decades.
Bryan Schick, president of NFP International, said: “With $16 trillion passing to the next generation over the next 30 years, the enduring legacies of many families will soon be defined,” adding that without proper planning it could be possible for the ultra-wealthy to lose up to half their fortunes to inheritance tax.
The document concluded by suggesting that the wealthy are getting both wealthier and larger in rank, finding that there has been a 6% increase in the number of UHNW individuals since 2013.
Yet cautioned that ultra-high net worth individuals must pass on their values in addition to their wealth in order to prevent the proverb “shirtsleeves to shirtsleeves in three generations” from coming true.
