The largest wealth transfer in history by rich families will take place in the next 30 years, creating a new crop of ultra-wealthy individuals, says the
Wealth-X and NFP Family Wealth Transfers Report released Tuesday.
Across the globe, $16 trillion of ultra-high-net-worth wealth will go to the next generation. The United States will account for $6 trillion of the total.
Six trillion dollars of the worldwide wealth is in privately held businesses, but 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, predicts the report. This will lead to large opportunities for sales and public offerings of these companies, and ultimately to the release of even more cash for investments and spending by the next generation, Wealth-X and NFP say.
Over the next three decades, $5 trillion in liquid assets will change hands. At the same time, $300 billion in philanthropic donations are expected to be made from the transfers, the report says.
Sixty-eight percent of those UHNW individuals passing on their wealth are self-made individuals. It is crucial that the first generation transmits their business ethos and values to succeeding generations to prevent them from losing the wealth, Wealth-X and NFP say.
Without prior planning, UHNW individuals could lose up to half of their fortunes through inheritance taxes, the report says.
“With $16 trillion passing to the next generation over the next 30 years, the enduring legacies of many families will soon be defined,” says Bryan Schick, president of NFP International. “Expert guidance from qualified global advisors will be paramount in assisting the ultra-high-net-worth [families] in navigating complex planning challenges and executing an efficient transfer of wealth and values.”
Wealth-X is an information and prospecting firm for those with $30 million or more in assets. NFP, National Financial Partners Corp., provides advisory and brokerage services to companies and high-net-worth individuals.
