Summary: The largest intergenerational wealth transfer in history is underway: over the next 20 years, an estimated $83.5 trillion will move from baby boomers to the next generation. Millennials favor private assets, crypto, and global diversification.
The biggest wealth transfer in modern history is underway. Over the next 20 years, valuable wealth is expected to be inherited in very different ways: beneficiaries of family fortunes are preparing to use the money in directions far removed from those of the previous generation.
According to UBS estimates, over the next 20 years, $83.5 trillion in assets is expected to move from baby boomers and older entrepreneurs to their children and grandchildren.
UBS told CNBC: 'The world is entering a historic generational wealth transfer.' Among billionaire families alone, about $6.9 trillion is expected to change hands by 2040.
Many wealthy families in the first generation that built the fortune usually focus on areas they know well and have invested in deeply, including family businesses, real estate, or local blue-chip stocks. Wealth experts told CNBC that the next generation of beneficiaries is more likely to have an international education, greater liquidity, and a willingness to broaden their investments across a wider range of assets.
Elizabeth Hart, founder and CEO of Legacy Wealth Advisors, said: 'The first generation is more like builders. Their wealth is usually tied to a single asset class, often a family business or local blue-chip stocks they understand deeply.'
Hart added that, by contrast, younger heirs tend to view wealth through a 'global perspective' and are more willing to diversify across different asset classes and markets.
This shift could redirect some inherited capital away from traditional family wealth-preservation vehicles, especially real estate. Hart said Asian families have historically put money almost exclusively into property for generations, but second- and third-generation heirs increasingly want to diversify their assets and regions more broadly.
A Natixis Investment Managers survey shows that, compared with older investors, millennials are more likely to seek allocations to private assets: 53% said they were interested. At the same time, 62% of respondents would discuss cryptocurrency with an adviser, and 44% plan to increase or start crypto investments within the next year.
The younger generation also appears more willing to take risk. Natixis found that in the Asia-Pacific region, 78% of millennials want the chance to beat the market, compared with 38% of baby boomers who are willing to take risks to get ahead.
Using money as a tool, not an end in itself
Tobias Prestel, founder of Prestel & Partner, said younger wealth holders increasingly see money as a tool to achieve goals, rather than as wealth itself.
Prestel said: 'For most older people, money is just a thing, and the more money the better; for most younger people, money is only a tool. People care more about how the tool is used than about the vault itself.'
This change in mindset is also affecting spending patterns. Unlike collections built to signal traditional status, some younger heirs focus on experiences, liquidity, and an international lifestyle. Prestel said wealthy young people are less likely to own car collections and more likely to own multiple homes around the world, combining travel with a global property allocation.
Interest in sustainable development and impact investing is also rising. UBS found that nearly half of investors among the heirs already hold, or want to learn more about, impact and sustainable investing.
Generational transfer is also changing how families manage wealth. UBS said the next generation increasingly sees inheritance as a transfer of responsibility, not a future financial windfall.
One UBS respondent said: 'My brother and I don't see inheritance as something we will receive, but as a responsibility we have to take on: to do the job well, just as our father did in his day.'
However, this transition is not without risk.
Advisers believe that while the scale of the handover itself is unlikely to disrupt the overall transfer, the biggest risk to preserving wealth often comes from within the family.
Legacy Wealth Advisors' Hart said: 'The cracks are not caused by a lack of money, but by a lack of communication.'
Many first-generation wealth creators are reluctant to let go of control, especially in Asia, where family wealth is often closely tied to the family patriarch or matriarch at the helm. At the same time, heirs want greater transparency, to advance succession plans, and to build a more formal governance structure around family assets.
Hart added: 'Even with a succession plan, the biggest destroyer of wealth is family conflict.'
As wealth moves from the founder generation to the next, advisers say successful succession increasingly depends on preparing heirs as stewards, not just arranging the asset structure itself.
