Home to the world’s largest economy, North America is expected to dominate wealth transferals worldwide over the next decade, according to a recent report by Wealth-X, accounting for more than half of the global total.

North America is expected to transfer $10.6 trillion of wealth over the next decade, according to the Wealth-X report, representing almost 60 percent of all regions.

Europe ranked second at $3.6 trillion (15 percent) followed by Asia at $2.5 billion (14 percent) due to the relative youth of the latter region’s wealthy.

In total, more than 679,000 individuals are expected to transfer over $18.3 trillion of wealth to the next generation in the coming decade.

Investment Changes

According to the report, there are a handful of commonly cited issues to consider for wealth transferal to the next generation.

Of note is a shift in investments driven by globalized families with greater knowledge and seeking greater diversification in a more geopolitically and economically volatile environment. 

Other investment shifts include the next generation’s focus towards areas like tech, digital finance, private equity, venture capital and impact investing alongside the post-pandemic effect on greater interest in healthcare and ESG factors.

Timeline and Transparency

Investments aside, wealth transfers are occurring at earlier timelines – compared to the practice of passing on fortunes upon deaths – either to empower and or prime the next generation with limited wealth to oversee comfortably or for practical, logistical or tax planning reasons.

And with the global push towards greater transparency, especially with regards to reporting requirements and tax, the wealthy are increasingly aware of the essential role of specialist advice to plan wealth transferral. 

«In a world of rising complexity, increasingly globalized families and investments, surging ultra wealth levels, rapid digitalization, a viral pandemic and an increasing focus on ‘responsible’ investing, the importance (and challenges) of wealth transfer cannot be overstated,» said the report, titled «Preservation and Succession: Family Wealth Transfer 2021».

«Amid popular conceptions of wealth and inheritance, wealthy families have to overcome many hurdles to ensure their wealth is protected and continues to accumulate over the generations, while still adhering to the family’s values and vision.»