According to a recent estimate, up to $9 trillion is anticipated to be transferred to spouses and partners in the future years as part of a phenomenon known as "the horizontal wealth transfer."
It is anticipated that elder generations and ageing baby boomers would donate $84 trillion in wealth to charities and family members over the course of the next 20 to 30 years. It is anticipated that younger generations—Gen Z, millennials, and Generation X—will inherit the majority of wealth.
However, as women usually outlive males and surviving husbands and partners usually get the initial inheritances, the UBS Global Wealth Report predicts that in the future years, bequests would mostly benefit women.
The analysis projects that $9 trillion will be moved "intra-generationally," or from one spouse to another.
The survey stated that because life expectancy differs for men and women and because age gaps are common in couples, the inheriting spouse will usually possess and hang onto this money for an average of four years before passing it on.
The money is moving among generations rather than across them, thus the term "horizontal wealth transfer" from UBS. The horizontal transfers, albeit seldom observed, have the power to change the landscape of luxury spending, investing, and wealth management—all of which have historically been controlled by males.
“Most people have a rather feudal idea of wealth going down through generations,” said Paul Donovan, chief economist of UBS Global Wealth Management. “But about 10% is likely to go sideways, to spouses or partners and not yet giving it to children, although it will shift over time.”
The Americas will see the most horizontal wealth transfers, per the analysis. In that region, there are more than 43 million individuals over 75 who possess a cumulative fortune of nearly $50 trillion in transferable assets. According to the survey, the average age of the people transferring fortune is above 85.
While some families may be able to pass on wealth straight to their offspring, inheritances are frequently given to surviving spouses first, who then pass them on to their offspring. According to estate law, the surviving spouse is usually exempt from estate tax when inheriting property with an infinite value.
According to the analysis, wives would inherit roughly $8.4 trillion from their children after receiving $9 trillion, making them important decision-makers in the massive transfer of wealth.
These transfers are contributing to the so-called "feminization of wealth," along with other more general economic pressures. Analysts predict that as women's wages and wealth increase and their share of older and younger inheritors' inheritances rises, the proportion of women among high net worth investors and consumers will increase.
According to Julius Baer, women now account for over 11% of millionaires worldwide, almost twice as many as they did in 2016.
The management of wealth will be most affected. Donovan stated that women currently make about 45% of UBS's affluent clientele.
"In terms of managing wealth, it's crucial," he stated. "Different people, with different ideas and different things they want to do with their wealth," he added, will probably be wealth management customers.
According to a McKinsey analysis, by 2030, women would likely own the majority of the $30 trillion in wealth accumulated by baby boomers. Although males have historically made up the majority of both customers and advisers in the wealth management sector (men making up 85% of the latter group), McKinsey reported that this is quickly changing.
"Women are ready to take centre stage after years of playing second fiddle to men," the research stated.
According to McKinsey, the number of married women making financial and investment decisions has increased by 30% in the last five years, and more women than ever are providing for their families, "spurring growth in their investible assets."
Additionally, luxury businesses that have historically catered to males are changing. Women's watches are one of the markets for luxury timepieces that is expanding the quickest. The CEO of Bulgari, Jean-Christophe Babin, informed me earlier this year that "more and more unisex and feminine watches are in style." In terms of independence, autonomy, and purchasing power, women are becoming more powerful. We believe that will go on.
A further advantage of the horizontal wealth transfer might be to philanthropy. Contributions to organisations serving women and girls increased by 9% to over $8 billion in 2020, the most recent year for which data is available, as reported by the Women's Philanthropy Institute at the Lilly Family School of Philanthropy.
MacKenzie Scott has donated more than $17 billion of her wealth since 2019, including sizeable donations to Girl Scouts of the USA, while Melinda French Gates just announced her commitment to donate $1 billion to groups that support women and girls.
Donovan predicted a significant change in the ownership of wealth. "When considering who controls the resources that finance the global economy, it will be quite significant."
(Sourec:www.cnbc.com)
It is anticipated that elder generations and ageing baby boomers would donate $84 trillion in wealth to charities and family members over the course of the next 20 to 30 years. It is anticipated that younger generations—Gen Z, millennials, and Generation X—will inherit the majority of wealth.
However, as women usually outlive males and surviving husbands and partners usually get the initial inheritances, the UBS Global Wealth Report predicts that in the future years, bequests would mostly benefit women.
The analysis projects that $9 trillion will be moved "intra-generationally," or from one spouse to another.
The survey stated that because life expectancy differs for men and women and because age gaps are common in couples, the inheriting spouse will usually possess and hang onto this money for an average of four years before passing it on.
The money is moving among generations rather than across them, thus the term "horizontal wealth transfer" from UBS. The horizontal transfers, albeit seldom observed, have the power to change the landscape of luxury spending, investing, and wealth management—all of which have historically been controlled by males.
“Most people have a rather feudal idea of wealth going down through generations,” said Paul Donovan, chief economist of UBS Global Wealth Management. “But about 10% is likely to go sideways, to spouses or partners and not yet giving it to children, although it will shift over time.”
The Americas will see the most horizontal wealth transfers, per the analysis. In that region, there are more than 43 million individuals over 75 who possess a cumulative fortune of nearly $50 trillion in transferable assets. According to the survey, the average age of the people transferring fortune is above 85.
While some families may be able to pass on wealth straight to their offspring, inheritances are frequently given to surviving spouses first, who then pass them on to their offspring. According to estate law, the surviving spouse is usually exempt from estate tax when inheriting property with an infinite value.
According to the analysis, wives would inherit roughly $8.4 trillion from their children after receiving $9 trillion, making them important decision-makers in the massive transfer of wealth.
These transfers are contributing to the so-called "feminization of wealth," along with other more general economic pressures. Analysts predict that as women's wages and wealth increase and their share of older and younger inheritors' inheritances rises, the proportion of women among high net worth investors and consumers will increase.
According to Julius Baer, women now account for over 11% of millionaires worldwide, almost twice as many as they did in 2016.
The management of wealth will be most affected. Donovan stated that women currently make about 45% of UBS's affluent clientele.
"In terms of managing wealth, it's crucial," he stated. "Different people, with different ideas and different things they want to do with their wealth," he added, will probably be wealth management customers.
According to a McKinsey analysis, by 2030, women would likely own the majority of the $30 trillion in wealth accumulated by baby boomers. Although males have historically made up the majority of both customers and advisers in the wealth management sector (men making up 85% of the latter group), McKinsey reported that this is quickly changing.
"Women are ready to take centre stage after years of playing second fiddle to men," the research stated.
According to McKinsey, the number of married women making financial and investment decisions has increased by 30% in the last five years, and more women than ever are providing for their families, "spurring growth in their investible assets."
Additionally, luxury businesses that have historically catered to males are changing. Women's watches are one of the markets for luxury timepieces that is expanding the quickest. The CEO of Bulgari, Jean-Christophe Babin, informed me earlier this year that "more and more unisex and feminine watches are in style." In terms of independence, autonomy, and purchasing power, women are becoming more powerful. We believe that will go on.
A further advantage of the horizontal wealth transfer might be to philanthropy. Contributions to organisations serving women and girls increased by 9% to over $8 billion in 2020, the most recent year for which data is available, as reported by the Women's Philanthropy Institute at the Lilly Family School of Philanthropy.
MacKenzie Scott has donated more than $17 billion of her wealth since 2019, including sizeable donations to Girl Scouts of the USA, while Melinda French Gates just announced her commitment to donate $1 billion to groups that support women and girls.
Donovan predicted a significant change in the ownership of wealth. "When considering who controls the resources that finance the global economy, it will be quite significant."
(Sourec:www.cnbc.com)
