6 Traits of People Passing Down Wealth in Next Decade
Some 1.2 million individuals with net worth of more than $5 million are expected to pass on collective wealth of almost $31 trillion over the next 10 years, according to Altrata’s Family Wealth Transfer 2024 report, which is based on data from the firm’s Wealth-X unit. Individuals with a net worth of more than $100 million will account for almost half of the amount being passed on.
The value of wealth being transferred will vary enormously across the different wealth tiers. Very high-net-worth individuals — those 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 more than $30 million, will pass on 64% of the total wealth.
Altrata noted that wealth transfers are increasingly taking place during the lifetime of the head of a family, for practical reasons such as tax planning and the desire to prepare heirs for future financial stewardship. This shift, coupled with rising global wealth and younger generations’ differing values, underpins the need for families to align on succession plans early.
It also opens new opportunities for organizations that advise, prospect for and engage with the wealthy.
Shifting global trends and the geopolitical environment will influence family wealth transfer over the next decade. Major trends include complex succession planning for increasingly globalized wealthy families (underlining the crucial role of expert advisors); the disparity between the values, experiences and aspirations of wealth holders and their younger benefciaries; 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.
Gen Xers will be first in line to inherit from their wealthy parents. Millennials and Generation Z are more likely to receive smaller sums from their grandparents.
Bequests in North America and Europe together will account for 71% of global wealth transfers up to 2033. Individuals with net worth of $5 million or more in North America will pass on more than $14 trillion, a 46% share, while Europeans will pass on $7.4 trillion, a 22% share.
Despite being home to more wealthy individuals than Europe, just a fifth of wealth transfers will take place in Asia, in large part because those passing on their estates in the region (except in Japan) are younger on average than their North American and European counterparts.
The next decade’s beneficiaries will exhibit a dramatically higher level of engagement in philanthropic causes, although the popularity of the favorite causes between benefactors and heirs is mostly similar.
See the accompanying gallery for six traits of those transferring wealth over the next decade.