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Laxman Pai, Opalesque Asia: Some $84 trillion in wealth is going to change hands in the next 25 years - with $72.6 trillion in assets transferred to heirs, while $11.9 trillion will be donated to charities, said a study.
According to Cerulli's study, "U.S. high-net-worth and ultra-high-net-worth markets 2021," more than $53 trillion will be transferred from Baby Boomer households, representing 63% of all transfers.
Another $15.8 trillion is expected to be transferred from Silent Generation households and older, primarily over the next decade. Moreover, $35.8 trillion-or 42%-of the overall total volume of transfers is expected to come from HNW and ultra-high-net-worth households, which together make up only 1.5% of all households.
As a result, firms that can remain on the cutting edge of complex planning and wealth structuring tactics will be invaluable to clients as taxation becomes a more pressing worry.
According to one of the report's lead authors, Chayce Horton, a Cerulli research analyst covering the high-net-worth space, grantor trusts (77%) are far and away the most common way to increase the tax-efficiency of wealth transfer events among HNW practices, followed by spousal lifetime access trusts (54%) and strategic gifting (46%).
"As taxes become an increasingly pressing regulatory issue among legislators, wealth managers will need to keep a pulse on the latest developments at the state and federal levels," he added.
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