Intergenerational Wealth Transfer Will Reshape Investing and Spending: Next-Gen Strategies

The biggest wealth transfer in modern history is under way. Heirs are expected to use family wealth differently from the generation before them.

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

UBS told CNBC: “The world is entering a historically significant intergenerational wealth transfer.” Among billionaire families alone, about $6.9 trillion is expected to be transferred by 2040.

In many wealthy families, the first generation built wealth by focusing on familiar areas: family businesses, real estate, or local blue-chip stocks. Wealth experts told CNBC that the second generation is often more internationally educated, more mobile, and more open to a broader range of investments.

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, often an operating family business or local blue-chip stocks.”

By contrast, she said younger heirs often see wealth through a global lens and are more willing to diversify across asset classes and markets.

This shift could pull some inherited wealth away from the traditional anchor points of family capital, especially real estate. Hart said Asian families were historically almost entirely focused on property for generations, but second- and third-generation heirs are increasingly diversifying into other assets and geographies.

A Natixis Investment Managers survey found that millennials are more likely than older investors to hold private assets, with 53% expressing interest. They are also more likely to discuss crypto with advisers, with 62% saying they would, and 44% planning to increase or start crypto investing within a year.

Younger generations are also more comfortable with risk. Natixis found that in Asia-Pacific, 78% of millennials want an opportunity to outperform the market, compared with 38% of baby boomers willing to take risks to get ahead.

Money: from an endpoint to a tool

Prestel & Partner founder Tobias Prestel said younger wealth holders increasingly see money as a tool to achieve goals, not an end in itself.

“For most older people, money is one thing, and money is good; for most young people, money is just a tool,” Prestel said. “They care more about how the tool is used than about obsessing over a wealth treasure chest.”

This mindset shift also affects spending habits. Some younger heirs no longer chase traditional status symbols as collectibles; instead, they prioritize experiences, liquidity and an international lifestyle. Prestel said it is increasingly common for wealthy young people to have homes spread around the world, and they are also more willing to combine travel with a global property portfolio.

Interest in sustainable and impact investing is also rising. UBS found that nearly half of next-generation investors have already invested in, or want to learn more about, impact and sustainable investing.

Wealth transfer is also reshaping family financial planning. UBS says next-generation family members increasingly see inheritance as a transfer of responsibility rather than a final windfall.

One respondent told UBS: “My brother and I do not see inheritance as something we will receive, but as a responsibility: to do as well as our father did.”

However, the process is not without risk.

Although the scale of wealth handoffs is huge, advisers say it is unlikely to derail the broader transfer of wealth overall. The risks most likely to erode wealth preservation often come from within the family.

Legacy Wealth Advisors’ Hart said: “The problem is not a lack of money, it’s a lack of communication.”

Many first-generation wealth creators still find it hard to let go, especially in Asia, where family wealth is often closely tied to the family elder or core figure. Meanwhile, heirs are pushing for greater transparency, better succession planning, and formal governance structures around family assets.

Hart added: “Even with succession plans, family disputes remain the biggest destroyer of wealth.”

As wealth moves from founders to later generations, advisers say successful transfers increasingly depend on preparing heirs to be stewards, not just on the asset structure itself.