US Wealth Transfer To Surpass $84 Trillion By 2045 – Cerulli

Tom Burroughes

28 January 2022

A new report reckons that US households will transfer $84.4 trillion of wealth through to 2045, highlighting why the wealth management industry can look forward to busy times for the foreseeable future, regardless of the political and economic weather.

Huge numbers are bruited about on how many trillions of dollars – or equivalent – will be passed from one generation to the next in the coming years. Data and analytics firm has added its own numbers to the mix.

What is particularly striking is that about 42 per cent of the wealth shift will involve high net worth and ultra-HNW households, even though they account for just 1.5 per cent of all households. This will underscore concerns about the level of wealth concentration in the US.

The figures come from the Boston-based firm’s report, US High Net Worth and Ultra-High Net Worth Markets 2021: Evolving Wealth Demographics.

Out of the $84.4 trillion figure, Cerulli said that $72.6 trillion in assets will be transferred to heirs, while $11.9 trillion will be donated to charities. More than $53 trillion will be transferred from households in the Baby Boomer generation, representing 63 per cent of all transfers.

Silent Generation (persons born between 1925 to 1945) households and those older stand to transfer $15.8 trillion, which will primarily take place over the next decade. $35.8 trillion (42 per cent) of the overall total volume of transfers is expected to come from HNW and UHNW households.

Cerulli said the figures show that firms which are able to handle complex planning and structuring tactics will be important allies for clients as taxes become a more pressing worry. Grantor trusts (77 per cent) 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 per cent) and strategic gifting (46 per cent).