The largest wealth transfer in history has already begun – ‘Only the Gilded Age at the beginning of the 20th century bears any comparison’

Desdemona Despair

By Quentin Fottrell
13 September 2016

(MarketWatch) – Unhappy with your inheritance? Then you might find it difficult to read this.

Ultra high-net-worth individuals will transfer $3.9 trillion to the next generation by 2026, according to Preparing for Tomorrow: A Report on Family Wealth Transfer, released Monday by global wealth consultancy Wealth-X and insurance brokerage and consulting firm NFP. This reflects a 5% decline from the report’s 2014 estimate of $4.1 trillion, but this is because the massive global wealth transfer among the world’s newest superrich has already begun. The biggest concern for the world’s superrich was “succession and inheritance issues” (67%), a recent survey by global real estate consultants Knight Frank found.

This $3.9 trillion expected to be transferred is equal to 13% of all assets of ultrahigh-net-worth individuals, enough to purchase outright the 10 largest companies in the world. […]

Last year, ultrahigh-net-worth individuals — defined as those with assets of $30 million or more — aged 80 or over were on average seven times wealthier than those under 30 years old. Despite the higher media profiles given to young Silicon Valley millionaires and billionaires like Facebook Chief Executive Mark Zuckerberg, there are many more who are significantly older. “We estimate that, in total, there are over 14,000 ultrahigh-net-worth individuals likely to transfer assets in the next 10 years,” the report states. This number is larger than the total ultrahigh-net-worth population of China (12,050) or the U.K. (10,650). […]

What’s more, the past 35 years have been a period of extraordinary wealth creation by billionaires, according to the UBS/PwC 2015 Billionaire Report released last month, with some 917 billionaires who are self-made. “Only the ‘Gilded Age’ at the beginning of the 20th century bears any comparison,” it states. […]

If these trends continue, the Forbes 400 will see their average wealth skyrocket to $48 billion by 2043 — more than eight times the amount they hold today, according to a report released last month by the Urban Institute, a nonprofit and nonpartisan policy group. The average wealth for white families would increase by 84% to $1.2 million versus $108,000 for African-Americans (27% growth). The American dream is only available to only certain members of society, says Dedrick Asante-Muhammad, a director at the Corporation for Enterprise Development, a nonprofit based in Washington. [more]

The largest wealth transfer in history has already begun