With the advantages of more education, a world that is literally at their fingertips, and a greater sense of purpose, the next generation of billionaires is expected to make very different choices than previous generations when it comes to passing their wealth along.
Expect big departures from tradition when the estate plans of a new generation of billionaires begin to transfer their wealth. Unprecedented wealth creation, much of it digital in nature, means that more than $2 trillion in assets in the next 20 years will be transferred, according to a recent Billionaires Report by UBS and PcW. Perhaps it’s time to change the name of the report to the Trillionaires Report.
Investopedia’s article, “Billionaires to Transfer $2T in Wealth to Heirs,” reports that the data was gathered from the last 20 years, following 1,400 billionaires across the 14 largest markets. It looks at the potential impact this gigantic wealth transfer may have on both the recipients and society at large.
The report goes on to say that as great wealth trickles down the generations, the goals of those transferring that wealth will change. In fact, we’re already seeing the early stages of what we expect to be an upsurge in philanthropy.
The Billionaires Report includes information given by an advisor to several billionaire families.
The report concludes that younger beneficiaries of billionaire wealth are driven by three key goals that make them different from their elders: they typically put business first, place greater emphasis on values instead of valuables, and look to find identity through philanthropy. Young billionaires are apt to be entrepreneurial and feel that growing their businesses is a way to benefit society. They also believe in philanthropy, but have a different approach than their parents and grandparents.
The report presents an optimistic view of what may result from the wealth transfer. It asserts that the heirs will wish to create tangible benefits to more than their businesses and employees, but to the world in which they live. It is likely that they will change the face of philanthropy, as their desire to have a positive impact on their communities will benefit from bringing a strategic, business-like approach to giving.
Reference: Investopedia (October 31, 2016) “Billionaires to Transfer $2T in Wealth to Heirs”