How to prepare for the great wealth transfer

The 21st century’s “great wealth transfer” represents the most significant intergenerational asset shift in history, projected to exceed $100tn globally by 2048. Unlike gradual generational shifts of the past, this change is expected to unfold within a single generation. But the transfer isn't solely about financial assets—it's an emotionally charged movement of values, vision, and purpose that will define the lasting legacy of ultra-high-net-worth (UHNW) families. Family offices play a pivotal role in guiding these families through the transfer, ensuring that wealth is not only preserved but also aligned with the family's broader goals.

The complexities of global wealth

With wealth accumulation surging via property, equity markets, and business exits, modern families face increasingly complex challenges. Assets are geographically diverse, with family members often residing in different jurisdictions, posing multifaceted tax, legal, and risk management considerations. Yet, only 26% have an effective wealth transfer strategy in place and waiting until death could risk hefty taxes or even wealth erosion by the third generation. Early planning with expert advice is critical to harmonise values, manage assets, and navigate conflicting priorities.

Aligning purpose with strategy for family wealth

Wealth often diminishes as generations pass, with 70% of families losing it by the second generation, and 90% by the third. You can’t just assume that the next generation will know what to do, and there are a number of well-known examples of families who have engaged with the process and created plans that have sustained their wealth across generations.

Family governance is key in helping UHNW families develop a robust plan that goes beyond finances, ensuring that shared values—such as philanthropy—align with the family’s wealth management strategy. By engaging inheritors now, UHNW families can ensure that their legacy and vision endure, fostering stronger relationships and reducing conflict. Transparent guardrails and a sense of shared responsibility promote not just wealth preservation, but also growth.

The role of women and the sandwich generation

This wealth transfer is transformative for women, who stand to inherit as much as 70% of assets, making them key economic growth drivers. Simultaneously, the "sandwich generation", who support both ageing parents and children, shoulders the emotional complexities of estate planning. With longer life expectancies and prolonged asset holding, effective wealth strategies must prioritise flexibility while mitigating geopolitical and technological uncertainties, such as the impact of artificial intelligence.

Key takeaways: how UHNW families can navigate the great wealth transfer

The great wealth transfer marks an unprecedented moment in financial history, presenting both immense opportunities and challenges. To safeguard wealth and build enduring legacies, UHNW families must plan proactively, aligning their financial strategies with shared values and purpose. Open communication, early engagement with the next generation, and strategic planning are essential to navigate the emotional, legal, and financial complexities involved. With women emerging as key economic drivers and shifting family dynamics at play, this transfer has the potential to not only protect wealth but also grow it for future generations—provided the right steps are taken today.

To explore how we can help you align your financial strategies with your values and purpose, engage with the next generation, and navigate the complexities of wealth transfer, please get in touch with Jill Kaur or your usual RSM contact.