Over $31 Trillion to Be Passed to Next Generation by 2034

As many as 1.2 million individuals worth more than $5 million are expected to pass on collective wealth of almost $31 trillion over the next 10 years. This sum is greater than the GDP of the US and is more than 10 times the market capitalisation of technology giant Microsoft, according to the US-based Altrata, a global leader in data-driven people intelligence.

In its report entitled “Family Wealth Transfer 2024” powered by Wealth X data, Altrata said that individuals with a net worth of more than $100 million will account for almost half of the $31 trillion being passed on. The value of wealth being transferred will vary enormously across the different wealth tiers.

“The very high net worth (VHNW) – individuals with fortunes of between $5 million and $30 million – will account for 87% of all the people transferring this wealth. The remaining 13%, ultra-wealthy individuals with $30m+, will pass on 64% of the total wealth,” Altrata said in the report.

Family wealth transfer will be influenced by shifting global trends and an increasingly complex geopolitical environment. Some major trends include complex succession planning for increasingly globalised wealthy families (underlining the crucial role of expert advisors), the disparity between the values, experiences and aspirations of wealth holders (often founders) and their younger benefactors, and an increase in wealth being passed on during the lifetime of the head of a family rather than solely upon death, requiring early engagement and preparation.

Generation X

Generation X will be first in line to inherit from their wealthy parents. Much is often made in the media of millennial and Generation Z inheritors but, in fact, most heirs (excluding partners) are currently in their mid-to-late 40s.

Millennials and the younger Gen Z are more likely to receive sums from their grandparents – legacies that will often be less substantial than if they had been inherited from their parents, the report noted.

Wealthy donors in North America and Europe will together account for 71% of global wealth transfers up to 2033. Individuals with $5 million+ in net worth in North America will pass on more than $14 trillion – a 46% share; Europe comprises a 22% share, passing on $7.4 trillion.

Despite Asia being home to more wealthy individuals than Europe, just a fifth of wealth transfers will be in Asia due, in large part, to the donors’ younger average age (except in Japan).

The next decade’s beneficiaries have a stronger interest in environment and healthcare causes than those who are passing on this wealth. While the popularity of the favourite causes is mostly similar – with education being the most popular field for philanthropic donations followed by the arts and social welfare – what comes across starkly is that the beneficiaries have a higher level of engagement in all of the top causes, the report said.