North America’s wealthy will pass on $10.6trn by 2030, accounting for 60% of all wealth transfers
Heirs to North America’s wealthiest are in for massive payments. That’s according to a moneytransfers.com data analysis. The analysis projects that the region’s super-wealthy will bequeath their inheritors $10.6T by 2030.
Moneytransfers.com reckons that individuals worth $5 million or more will collectively transfer about $18T by then. That amount exceeds China’s yearly GDP. It’s also over seven times greater than Microsoft’s market cap.
How’s the wealth distributed?
North America will lead Europe and Asia in terms of the wealth transferred. The region will make up nearly 60% of the global bequeathed wealth in the next ten years. On their part, the wealthy Europeans will hand down $3.6T or 15% of the collective wealth transfers. Asia follows closely at roughly $2.5T.
The remaining regions will contribute under a trillion USD each. First off is the middle east, that’ll account for $604B. Latin America and The Caribbean will chip in another $516B. Finally, The Pacific and African regions will add $271B and $222B, respectively.
A tiered wealth system
The data categorizes the rich into two groups. First is the Ulta High Networth individuals (UHNW), with a net worth exceeding $30M.
Secondly, the Very High Networth (VHNW) group consists of individuals whose Networth is between $5 – $30M.
The VHNW population consists of around three million persons. These jointly hold assets whose worth exceeds $62T. Analysts project that 25% of these people will seek to bequeath their estates by 2030. VHNWs will pass on a third ($6.2T) of the total wealth transfers by 2030.
Further, the forecasts indicate that each VHNW individual will transfer $27M to their heirs. That said, the value of estates handed down will fluctuate depending on the donor’s ability.
Persons holding between $5-$10 million will account for slightly more than 50% of all wealth transfers. About a third will move from people whose net worths are between $10+$30M.
A skewed distribution
On the flipside, UHNW persons will collectively pass down $12.2T. Despite their fewer numbers, they will make an average transfer of $135M. Here some 1200 UHNW men will redistribute their wealth by 2030.
The elite group will contribute 0.2% of all wealth transfers. However, it’ll make up a fifth of the bequeathed net worth. This fact illustrates the skewness in the global wealth distribution.
The anatomy of a donor
MoneyTransfers’ presentation also shows that most of the donors are men. Across the different wealth tiers, Men make up nearly 90% of the donors. Women forming the VHNW and UHNW donors are 15% and 8.5%, respectively.
Again, most donors currently lie in the 70 -80 years age bracket. Furthermore, they love sports and charitable activities. Their number increases with the wealth tier. For instance, 47% of the UHNW group are of that age. In contrast, in the VHNW group, only 43% are of that age.
Furthermore, about two-thirds of them are self-made billionaires. Nevertheless, going up the tiers indicates the growing significance of inherited wealth. 25% of the UHNW holders have had some inheritance supporting their wealth creation efforts.