×

Billionaires are about to transfer $2 trillion in wealth to their kids

Wealth inheritance
Juice Images | Getty Images

Less than a quarter of the world's billionaires are expected to hand down $2.1 trillion in wealth to their children or family over the next 20 years, creating one of the biggest billionaire wealth transfers in history.

UBS and PwC's "Billionaire Insights" report analyzed 1,397 of the world's 2,000-plus billionaires. It said that 460 of them plan to transfer a fortune equal to the GDP of India by 2036.

These billionaires, who are older than 70 years, hold more than 40 percent of billionaire wealth.

In Asia's young economies, 85 percent of the billionaires are first-generation, making this transfer of wealth the first of its kind. The shift in wealth to the next generation could have huge impacts on the consumer economy, the businesses that are inherited and philanthropy.

"If you think about the acceleration of billionaire wealth just over the past 10 years alone, we've been through what we call the second gilded age," said John Mathews, head of private wealth management for UBS. "These families all have decisions to be made. Do they want to pass it directly down to the next generation, or what are the other strategies and structures they can put in place?"

The $2 trillion transfer may lead to a surge in philanthropy and values-based investing, as millennials — who may be inheriting much of the billionaire wealth — believe in "doing good by doing well," according to the report. "They see business success as a way of benefiting society."

They are also "eager to put their resources to work for social good" through philanthropy.

Yet many will inherit their family companies, rather than cash or an investment portfolio.