Gen Xers are about to get their share of an unprecedented intergenerational transfer of wealth, a new report says.
Generation X, those born between the mid-1960s and early 1980s, will inherit an estimated $31 trillion in wealth from their predecessors by 2033, according to a report from think tank Altrata.
Altrata says its data shows that 87% of people who transfer their wealth are very high net worth (VHNW) individuals, or people with a net worth between $5 million and $30 million.
Generation X will receive the money first, unlike millennials and Generation Z, who will mainly receive inheritance from their grandparents.
Altrata found that corporate executives will make up more than 70% of all ultra-rich people who will pass on their money over the next decade, while entrepreneurs will make up 20%, and 7% will be sole heirs or people who are only rich because they inherited significant wealth.
“Wealth transfers are increasingly taking place during the lifetime of the head of the family, rather than just after his death, for practical reasons such as tax planning and the desire to prepare heirs for future financial management.
This shift, coupled with rising global wealth and the different values of younger generations, reinforces the need for families to agree on succession plans as early as possible. It also opens up new opportunities for organizations that advise, source and engage with wealthy individuals.”
In a report on the global wealth management industry, Big Four accounting giant Ernst & Young (EY) estimates that baby boomers will transfer up to $3 trillion in assets to their relatives this year.
EY expects the “tidal wave” of wealth transfer from baby boomers to their families to continue into the start of the new decade.
“It is estimated that US$2-3 trillion will be inherited from wealthy donors in 2024; in many markets, tens or even hundreds of billions [of dollars] will change hands this year. In 2023, more billionaires were created through inheritance than through entrepreneurship.
The baby boomer wealth inheritance is not only the largest transfer of assets in world history; it will also have a transformative impact on female heirs and the next generation. By 2030, wealthy donors will transfer a staggering US$18 trillion to beneficiaries, roughly equivalent to China's annual GDP."
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