Horizontal Wealth Transfer: Are You Missing Out on This Financial Opportunity?

It’s true that when you pass away, you cannot take your money with you. However, if you have any determinable amount of wealth or assets, it has to go somewhere.

The question is where? To whom? When people think of inheritance or wealth transfer, they often think of passing it down to the next generation. But there’s another method, too, and according to a recent global wealth report by UBS, a global financial services company, the trend is changing a bit.

Here’s what the findings reveal.

What Is Horizontal Wealth Transfer?

Horizontal wealth transfer is a term meaning passing one’s wealth on to your spouse, rather than the next generation, thus sliding it over, rather than down.

There’s been an uptick in horizontal wealth transfer because people are living longer these days. That wealth will likely end up getting passed down later on.

Who Stands to Benefit?

Much of the wealth will transfer to spouses, which means with the majority of billionaires and millionaires being men, women tend to benefit the most in the short term.

Younger generations will also benefit, but that won’t happen until the great wealth transfer takes place. With life expectancy increasing, this is likely to be the continuing trend.

How Much Wealth Will Transfer?

According to the global wealth report, at least $9 trillion is expected to change hands in the coming years.

Then over the next two to three decades as baby boomers and the Silent generation age, that will amount to $84 trillion and will mostly pass onto younger generations and charity.

Where Will the Largest Horizontal Wealth Transfers Take Place?

With the wealthy spread across the globe, it’s a valid question. Especially considering that the largest growth in riches took place in Russia, Qatar, particularly Türkiye.

However, the largest subset of the horizontal wealth transfer, at least in the immediate future, will take place in the US. The US is currently home to the largest number of millionaires (in USD), so this makes sense.

Is Wealth Among Women Increasing?

Without a doubt, it is. Over the past decade, women’s wealth has increased. Now, they account for 11% of all millionaires in the world.

That is a significant growth of nearly twice what it was just nine years ago. By 2030, they will likely control most of the generational wealth, which is also a significant change.

Source: A recent global wealth report by UBS study.