(Clayton County Register) - A recent study conducted by Swiss Bank UBS has shed light on the evolving trend among billionaires, showing that an increasing number of billionaires are now the product of their parents rather than being self-made entrepreneurs.
The study reveals that those who joined the billionaire club last year through inheritance were actually wealthier than those who accumulated their wealth through entrepreneurship.
Out of the 137 individuals who became billionaires in the past year, 53 of them received a staggering $150.8 billion through wealth transfers, while the remaining 84 self-made billionaires amassed $140.7 billion. This marks the first time in the history of the UBS report that more wealth has been acquired through inheritance rather than entrepreneurship.
This shift in billionaire demographics highlights the ongoing transfer of wealth happening in society, particularly as wealthy baby boomers pass on an estimated $72 trillion to millennials. The report predicts that over the next few decades, approximately 1,000 billionaires will transfer a total of $5.2 trillion in wealth to their children.
Contrary to the previous generation of billionaires, who were mainly driven by philanthropy and making a positive impact on the world, the UBS survey found that the inheritance generation prioritizes the continuation of their family’s business and passing on their wealth to their own children. This disparity in priorities has raised concerns among the current ultra-rich about who will inherit their empires. Companies such as LVMH and Armani are already proactively devising detailed succession plans that involve family members.
Furthermore, the new generation of billionaires is likely to avoid paying taxes in the same manner as their parents. Inheritance tax, for instance, is unlikely to be introduced globally, even though it has been advocated as a potential solution to address rising inequality and prevent loopholes during the wealth transfer process. A significant percentage of the world’s billionaires live in countries without inheritance tax, resulting in an estimated $5 trillion of tax-free wealth being passed down to the next generation.
As the dynamics of billionaire wealth continue to evolve and generational wealth becomes a dominant factor, it remains crucial for society to consider the implications of this trend and explore measures to address inequality and ensure a fair distribution of resources.
By Karl-W. Huelsenbeck
December 10, 2023
