Global wealth transfer is here: how the next generation will spend trillions

The largest wealth transfer in modern history is underway, and the next generation of wealthy families set to inherit trillions are planning to use that money differently from their parents.

According to UBS, about $83.5 trillion will move from baby boomers and older entrepreneurs to their children and grandchildren over the next two decades.

UBS told CNBC: "The world is entering a historic intergenerational wealth transfer." Billionaire families alone are expected to transfer about $6.9 trillion by 2040.

For many wealthy families, first-generation wealth creators often concentrated in areas they know well: family businesses, real estate or local blue-chip stocks, wealth experts told CNBC. By contrast, their children are more likely to have international educations, greater mobility and openness to a wider range of investment options.

Legacy Wealth Advisors founder and CEO Elizabeth Hart said: "The first generation are the builders. Their wealth is usually tied to a single asset class and often to assets they understand deeply, such as an operating family business or local blue chips."

Hart added that younger heirs, by contrast, tend to view wealth through a "global lens" and are more willing to diversify across different asset classes and markets.

This shift could pull some inherited wealth away from traditional family capital allocations, especially real estate. Hart said Asian families have spent "almost exclusively in property" over past generations, but second- and third-generation heirs increasingly want to diversify into other assets and other regions.

A Natixis Investment Managers survey found that, compared with older investors, millennials are more willing to seek exposure to private assets, with 53% saying they are interested. Millennials are also more likely to discuss crypto with advisers, with 62% saying they do, and 44% planning to increase or start crypto investing in the next year.

Young investors are also more comfortable with risk. Natixis found that in Asia-Pacific, 78% of millennials want opportunities that beat the market, while only 38% of baby boomers are willing to take risk to get ahead.

Seeing money as a means, not the point

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 a thing, and the more money the better. But for most younger people, money is just a tool. They care more about how the tool is used than about admiring the treasure chest full of money."

The change in mindset also affects spending habits. Instead of building traditional status-symbol collections, some younger heirs prioritize experiences, liquidity and a more international lifestyle. Prestel said that rather than collecting cars, young wealthy people are more likely to own homes around the world and combine travel with global real estate allocations.

Interest in sustainable and impact investing is also rising. UBS found that nearly half of next-generation investors already hold impact and sustainable investments, or are strongly interested in learning more about them.

The wealth transfer is also changing how families manage assets. UBS found that next-generation family members increasingly view inheritance as a transfer of responsibility, not a future financial windfall.

One UBS respondent said: "My brother and I don't think of inheritance as something we will get, but as a responsibility: to do the best we can and carry on what our father built."

But the transition is not without risk.

Advisers say the scale of the handoff itself is unlikely to disrupt the broader transfer process, but when it comes to preserving wealth, the biggest risks often come from inside the family.

Legacy Wealth Advisors' Hart said: "The cracks are not because of a lack of money, but because of a lack of communication."

Many first-generation wealth creators are reluctant to give up control, especially in Asia, where family wealth is often closely tied to the patriarch or matriarch at the center of the family. At the same time, heirs want more transparency, succession planning and formal governance structures around family assets.

Hart added: "Even with a succession plan, the biggest factor that destroys wealth is family conflict."

As wealth moves from founders to the next generation, advisers say a successful transfer increasingly depends on preparing heirs to act as stewards and operators, not just structuring the assets.