Some $124 trillion in wealth will transfer through 2048, with around $105 trillion expected to go to heirs and $18 trillion to charity, according to projections in a new report from Cerulli Associates.
Overall, heirs are inheriting around $2.5 trillion annually, and Cerulli analysts expect this figure to rise to more than $3 trillion annually by 2030 and to exceed $4 trillion around 2036. Gen X households inherit more than $1 trillion annually.
Cerulli said that amid these accelerating wealth transfers, it is critical for wealth managers, asset managers and other industry participants to enact best practices with current relationships while shifting service and product strategies to the future profile of the high-net-worth demographic.
Trillions in the Pipeline
Baby boomers and older generations will transfer nearly $100 trillion, or 81% of all transfers, the report projects. Over the coming decade, almost all transfers will come from these households.
More than half of the overall volume of transfers, $62 trillion, is expected to come from high-net-worth and ultra-high-net-worth households, which together make up around 2% of all households. Cerulli’s research found that these wealthy households are currently transferring more than $1 trillion annually to heirs.
Analysts’ projections of intragenerational transfers show that $54 trillion will be transferred between spouses before it is transferred intergenerationally to heirs. Some $40 trillion of these spousal transfers will go to widowed women in the boomer and older generations.
This will create an enormous need, and opportunity, for wealth services providers, Cerulli said.
The research indicates that millennials will inherit $46 trillion over the next quarter century, compared with $39 trillion for Gen Xers. However, Gen Xers will inherit the greatest portion of assets in the next 10 years, totaling $14 trillion to millennials’ $8 trillion.
