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The largest transfer of wealth in modern history is underway, and heirs who are set to inherit trillions of dollars in family fortunes are preparing to spend that money very differently than the generation that built it.
According to UBS, an estimated $83.5 trillion is expected to be passed down from baby boomers and older entrepreneurs to their children and grandchildren over the next 20 years.
“The world is entering a historic intergenerational wealth transfer,” UBS told CNBC. Billionaire families alone are expected to remit about $6.9 trillion by 2040.
Wealth experts told CNBC that for many wealthy families, the first generation built their wealth in a familiar focus: family businesses, real estate, and local blue-chip stocks. Their children are more likely to be internationally educated, more mobile, and open to a wider range of investments.
“The first generation were ‘builders,'” said Elizabeth Hart, CEO and founder of Legacy Wealth Advisors. “Their wealth is typically tied to a single asset class that they deeply understand, often family-owned businesses or local blue-chip stocks.”
In contrast, younger heirs tend to “view wealth through a global lens,” Hart said, adding that they are more open to diversifying across asset classes and markets.
This shift could divert some inherited wealth from traditional stores of family capital, particularly real estate. Hart said Asian families in particular have historically invested “almost exclusively in real estate for generations,” but second- and third-generation heirs are increasingly looking to diversify their investments into other assets and regions.
Millennials are far more likely than older investors to seek exposure to personal wealth, with 53% expressing interest, according to research from Natixis Investment Managers. They are also more likely to discuss cryptocurrencies with an advisor, with 62% doing so and 44% planning to increase or start investing in cryptocurrencies within the next year.
Younger generations also seem to be more comfortable with risk. According to Natixis research, 78% of millennials in Asia Pacific want a chance to beat the market, while 38% of baby boomers are willing to take risks to get ahead.
money as a means to an end
Tobias Prestel, founder of Prestel & Partner, said young high-net-worth individuals are increasingly seeing money as a means to achieving goals rather than as an end in itself.
“For most older people, money is a thing and money helps them get more things, but for most young people, money is just a tool,” Prestel said. “Rather than enjoying the treasure chest, they’re looking at how the tools are used.”
Changes in mindset are also impacting spending habits. Instead of building a collection of traditional status symbols, some young heirs prioritize experience, mobility, and an international lifestyle. Mr Prestel said young wealthy people are less likely to collect cars and are more likely to own residences around the world through a combination of travel and exposure to global real estate.
Interest in sustainability and impact investing is also increasing. UBS found that around half of next-generation investors are already investing in impact and sustainable investing or want to learn more about it.
This move is also reshaping how families manage their assets. The bank found that the next generation of families increasingly view inheritance as a transfer of responsibility rather than an ultimate financial gain.
“My brother and I both believe that inheritance is not something we will get, but rather a responsibility to do as well as our father did,” one respondent told UBS.
However, this transition is not without risks.
While the transfer of vast amounts of assets is unlikely to preclude widespread transfers, the biggest risks to preserving assets often come from within the family itself, advisers say.
“The rift is not a lack of funding, it’s a lack of communication,” said Hart of Legacy Wealth Advisors.
Many first-generation wealth creators remain reluctant to relinquish control, especially in Asia, where wealth is often closely tied to family heads and patriarchs. Meanwhile, heirs are demanding greater transparency about family assets, succession planning, and formal governance structures.
“Even with succession planning, the biggest destroyer of wealth is family conflict,” Hart added.
As assets move beyond the founding generation, advisors say successful asset transfers increasingly rely on preparing successors as stewards, not just structuring the assets themselves.
