Ultra-high net worth individuals around the world will transfer at least $16 trillion to the next generation over the next three decades, according to a report released Tuesday by Wealth-X and National Financial Partners, which provides benefits, insurance and wealth management.
This will be the largest wealth transfer in history, the report said, and will create a new crop of ultra-wealthy individuals.
Some 40% of ultra-wealthy benefactors, representing $6 trillion, are located in the U.S., it said.
The report emphasized the importance of early planning to ensure the successful transmission of assets and values from the benefactor to its beneficiaries.
Last year, the Center on Wealth and Philanthropy at Boston College updated its frequently cited 55-year wealth transfer projection. Its new research estimated that $59 trillion would be transferred to the next generation between 2007 and 2061.
The Wealth-X and NFP report said ultra-high net worth individuals 80 years or older were worth five times more on average than those 40 years and younger, who have yet to accumulate the wealth they will ultimately transfer to the next generation.
Liquidity also rises with age, in both absolute and relative terms. According to the report, 30% of the net worth of ultra-wealthy individuals who are expected to transfer their wealth is in liquid assets. This will allow for next generation more flexibility to invest and spend their inheritance as they wish.