In this list, a striking trend emerges: the presence of numerous young, unknown figures among the wealthiest fortunes.
Many of these young individuals have yet to enter the workforce or determine their professional paths. However, they hold a significant advantage: all billionaires under the age of 30 on Forbes’ list are, for the first time since 2009, heirs.
Among the 25 billionaires aged 33 or younger, only seven have built their own empires.
For Forbes, this predominance of young heirs signals the onset of a long-predicted phenomenon in the global financial landscape: the “great wealth transfer,” a period during which a substantial portion of the richest individuals’ assets will pass to the next generations.
It is estimated that by the end of 2029, over $8.8 trillion will be transferred from billionaires to their young successors.
BBC News Brazil compiled expert analyses, articles, and real-life cases to clarify the meaning of the great wealth transfer and to discuss the potential negative impacts of this extreme concentration of resources.
According to a study by the U.S.-based consulting firm The Williams Group, about 70% of wealth transfers in the United States fail, with approximately 60% of these failures attributed to a lack of trust and communication among members of wealthy families.
To address this challenge, creating a family protocol for inheritance planning can be crucial. This might involve forming family committees to discuss investments and including professionals such as psychologists to mediate conversations.
While numbers may vary, all point to the same outlook: in the next two decades, trillions of dollars are expected to be transferred from baby boomers (born in 1964 or earlier, in the two decades following the end of World War II) to the next generations of heirs, particularly millennials (born between 1981 and 1996) and Generation Z (born between 1997 and 2013).
Market research firm Cerulli Associates estimates that by 2045, a total of $84 trillion will change hands, with $72.6 trillion being transferred to heirs and $11.9 trillion allocated to philanthropy.
According to a UBS report on billionaire ambitions in 2023, for the first time in the study’s history, new billionaires have acquired more wealth through inheritance than through entrepreneurship. In just one year, 53 heirs received a total of $150 billion, while 84 billionaires amassed $140.7 billion through ventures.
UBS also forecasts that, over the next 20 to 30 years, more than 1,000 current billionaires will transfer over $5.2 trillion to their heirs. “How did we calculate this estimate? Simply by summing up the wealth of the 1,023 billionaires who are 70 years or older today,” the report highlights.
In the United States, it is estimated that the baby boomer generation currently holds $95.9 trillion of the $147.1 trillion in family wealth, according to the Federal Reserve, the U.S. central bank.
And why does this aging generation hold so much capital to pass on? “The exceptional wealth resulting from the boom in entrepreneurial activity since the 1990s has laid a foundation for future generations of billionaire families,” the text continues.
One reason patriarchs and owners of large fortunes are accelerating wealth transfers to younger generations is the fear of higher taxes. In the United States, lifetime inheritance gifts are tax-exempt up to a certain limit, currently set at $12 million; for amounts exceeding this limit, rates can reach up to 40% on the donated sum.
This new generation of young billionaire heirs expected in the coming decades emerges in a context where wealth concentration in the hands of a few families is exacerbating the challenges faced by most people worldwide.
The “Inequality, Inc.” report released by Oxfam earlier this year reveals that the wealth of the world’s five richest billionaires has doubled since 2020, while the wealth of 60% of the global population—around 5 billion people—has declined during the same period.
While seven out of ten of the world’s largest companies have billionaires as CEOs or major shareholders, only 0.4% of the more than 1,600 largest and most influential companies in the world have publicly committed to paying fair wages to their workers.
The devastating impact of this income inequality is evident, the report emphasizes. “The 2020s, which began with COVID-19 and witnessed the escalation of conflicts, the acceleration of the climate crisis, and rising living costs, seem to be turning into a decade of division,” the document states.
This growing trend toward inequality has been amplified primarily by the attention given to the work of French economist Thomas Piketty, who advocates for reforms in the capitalist system capable of halting this process of wealth concentration.
Extreme income concentration brings not only economic risks but also political risks for the planet, while creating a significant asymmetry of opportunities for those with fewer resources.
As for young heirs, professionals in various fields have been trying to predict their behavior and the changes they will bring to the business world, as is common in generational debates.
Banks, in particular, risk losing clients whose wealth they have helped build and manage for decades.
What is known is that the new generation of billionaires is more socially connected, more digital, and, at least in their rhetoric, more concerned about the positive impact their investments will have on the planet, both environmentally and socially.
A report by consultancy EY estimates that millennial investors are twice as likely to invest in companies or funds seeking social and environmental transformations.
At UBS, the wealth management team has been conducting a series of events and programs for years to cater to next-generation investors, as these heirs are called.
Behavioral differences are observed: while baby boomers value secrecy and privacy in a formal, trust-based relationship with their bank advisors, younger individuals prefer more interaction with their peers.
“We see the bank as a place that can provide contact with other entrepreneurs and open doors with people who are also clients,” says Freitas.
It is possible to expect billionaires to contribute to positive changes in the world, especially given the global issues arising from the enormous concentration of wealth in the hands of a few families. However, the UBS report highlights important nuances to consider.
While there are well-publicized examples of billionaire entrepreneurs promising to donate much of their wealth to philanthropy, it is less common for heirs to express the same intention. UBS research reveals that less than one-third of heir generations express intentions to pursue philanthropic goals and generate impact in the world, compared to more than two-thirds of first-generation billionaires.
Nevertheless, there is a tendency among heirs to invest in or manage businesses in ways that address environmental and social issues, both for commercial and altruistic reasons.
One interviewee in the bank’s research highlighted efforts to shift the family’s business focus from traditional sectors such as oil, gas, and mining to technology-related areas with less environmental impact.
Additionally, the growing pressure from markets for greater transparency, regulation, and compliance in recent decades has accelerated succession planning among billionaires. Compliance regulations now require more transparency, which can influence how billionaires manage their businesses and wealth.
However, even with succession underway, many baby boomer billionaires maintain strong control over their financial and operational decisions. This can be attributed to their reluctance to relinquish power. Tools like usufruct reservation allow them to retain political and economic control over their assets even after transferring them. This suggests that, although a power transition is underway, many billionaires still wield significant influence over their businesses and wealth.
