The world’s wealthiest are expected to pass on $31 trillion to the next generation by 2033, a new report has found.
Individuals with a net worth of more than $100 million will account for almost half of the $31 trillion – a figure greater than the GDP of the US – with Generation X (those born between the mid-1960s and the late 1970s) first in line to inherit, Altrata‘s Family Wealth Transfer 2024 identified.
‘We expect that over a quarter of these individuals will seek to pass on their fortunes in the next decade to 2033, which will involve the transfer of a staggering level of wealth,’ Altrata said, which used data compiled by its Wealth-X division.
The great wealth transfer is expected to shape the future of philanthropy, legacy planning and the family office landscape. Altrata‘s data showed a shift in philanthropic endeavours, with younger generations more focused on environmental and healthcare causes and more likely to engage with philanthropy than the generation they are inheriting from.
Generation X: the ‘slacker’ generation take the wealth reins
While there has been much focus on millennials and Generation Z inheritors, Gen X, now between 45 and 55, will be first in line to receive their affluent parents’ wealth legacy. Younger generations are more likely to receive smaller legacies from their grandparents.
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The implications of this $31 trillion transfer will resonate across industries globally and will have an impact on a wide range of organisations – from family offices and financial services providers to the luxury goods industry and the non-profit and charity sectors.
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The next generations are more focused on charity and foundations than their parents and have a stronger desire to be engaged in causes. As philanthropy becomes more impact-driven, there has been a shift away from more traditional approaches to philanthropy and legacy creation, the report found.
'The younger generations are very focused on charity and foundations. This doesn’t necessarily imply larger donations, but there is certainly stronger engagement and an interest in wanting to be more involved with the work of organisations and seeing their impact over time,' said D’Arcy Fellona, Client Success Manager, Financial Services and Luxury, Altrata.
As Generation X prepares to inherit vast sums, their greater engagement with environmental and healthcare causes will likely influence future philanthropic trends. The involvement of expert advisors will be crucial in navigating the complexities of this monumental wealth transfer, ensuring that both the current wealth holders and their beneficiaries achieve their financial and philanthropic goals.
[See also: Super-rich are giving away more of their money than ever before]
Who is the typical donor?
About 90% of those transferring wealth over the next decade are men, a figure that reflects the male-dominated gender split among the super-rich.
Fewer than 10% of those with more than $100m in net worth are women, while about a third of donors with $100 million+ are currently over 80.
Wealthy donors in North America and Europe will together account for 71% of global wealth transfers up to 2033.
Of the super-rich passing down their wealth, 70% will be corporate executives, 20% entrepreneurs and just 7% will be sole inheritors.
The growing importance of succession planning
For tax planning reasons and the desire to prepare heirs for future financial stewardship, wealth transfers are increasingly taking place while the head of a family is alive rather than waiting until their death.
This shift, coupled with rising global wealth and younger generations' differing values, underpins the need for families to align on succession plans early.
