Preparing for Tomorrow: A Report on Family Wealth Transfer

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Ultra high net worth (UHNW) individuals across the globe will transfer more than US$3.9 trillion between generations over the next decade — enough to purchase the 10 largest companies in the world outright.

“Preparing for Tomorrow: A Report on Family Wealth Transfer” takes an in-depth look at the most pertinent issues and challenges UHNW individuals face when transferring wealth to the next generation.  The report, which was produced by Wealth-X and sponsored by NFP, includes insight and best practices for family wealth transfers and the associated assets of the ultra wealthy.

Key findings from the Wealth-X and NFP report include:

  • More than 14,000 UHNW individuals are likely to transfer assets in the next 10 years.
  • These UHNW individuals have an average personal wealth of US$272 million.
  • This total combined wealth (US$3.9 trillion) represents 13% of all UHNW assets globally.
  • The United States will experience the most wealth transfers globally in the next 10 years.
  • Private investments represent the largest holdings for UHNW individuals set to transfer their wealth in the next decade, accounting for 36% of their net worth, an average of nearly US$100 million per person.
  • This same group has an average liquidity of US$92 million and US$16 million in real estate and luxury assets.

 

“As UHNW individuals age, they increasingly consider their legacy, whether that is maintaining it, if they are second or third generation wealthy, or creating it, if they are first generation,” said Tomas Povedano, Chief Operating Officer, NFP Life Solutions. “The importance of early planning and education of all related family members cannot be overstated; we find that setting expectations prudently can create the long-term legacy and stability that is so important to many UHNW individuals.”

“Preparing for Tomorrow: A Report on Family Wealth Transfer” outlines many of the significant difficulties UHNW individuals face when planning for wealth transfer, from family disputes to global reporting requirements. From these findings, the report highlights best practices for UHNW individuals, including:

  • The importance of early planning to set expectations for all stakeholders in the family and prevent unforeseen circumstances
  • Preservation of wealth through diversification, primarily against political instability or concentrated financial assets, such as primary businesses, to limit exposure to unexpected events
  • Usage of a full suite of expert advisors who work collaboratively to help manage an increasingly complicated global landscape

 

“Preparing for Tomorrow: A Report on Family Wealth Transfer” leverages Wealth-X’s proprietary database of the world’s most robust collection of curated research and intelligence on UHNW individuals, defined as those with a net worth of US$30 million and above.

Wealth-X’s team of researchers and analysts spoke to a panel of experts to understand the issues and created the Wealth-X UHNW Family Wealth Transfer Model to identify when these UHNW individuals are likely to pass on their wealth to the next generation, how much of this wealth will be inherited and how it will be passed on. The UHNW Family Wealth Transfer Model incorporates factors such as current and future wealth growth, taxes, and money passed onto spouses who will not transfer it to the next generation in the next 10 years.

 



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