The looming $84 trillion wealth transfer doesn’t have to worsen inequality — it could be a boon for women and workers

TL;DR: 

• Analysts project inherited wealth will worsen inequality, but advocates are combating the trend with programs and resources.
• One example is Apis & Heritage Capital Partners, which helps employees buy the companies they work for from aging owners or their heirs.
• Research from wealth management giant UBS says newly rich women in particular handle their money differently than older generations. Already 40% of angel investors are women now, up from 22% a decade ago.

Either way, history’s single largest transfer of wealth will impact how we invest in where we live.

Nearly 75 million Americans today are between 60 and 80 years of age, born into the post-World War economic boom. These so-called baby boomers came of age in one of most peaceful and economically prosperous periods in recorded history. Along the way they acquired a lot of stuff: houses, retirement accounts and businesses.

“This generational shift presents us with almost a once in a lifetime opportunity,” Jamie Sears told me. She’s the co-head of impact for UBS Americas, the wealth management giant, and a frequent collaborator who helps identify big economic trends.

Most older Americans don’t have that much.

In 2022, the median American 55 or older had less than $200,000 in assets, according to the Federal Reserve Bank, though the average is over $500,000, with the richest few tugging up the number. Disparities within those numbers are stark: the median Black household has barely more than a tenth the assets of the median white family. Even among white households, money has become more concentrated at the top in recent decades.

“The largest component of wealth gaps is business ownership and equity ownership through retirement accounts,” said Todd Leverette, founding partner at Washington DC-based private equity firm Apis & Heritage Capital Partners.

It’s those at the tippy-top whom big financial institutions watch most closely, but boomers are a rich enough generation that what they leave behind will have widespread impact.

If you’re interested in where those funds go, you can pay attention to two points of transfer: who gets those assets as older Americans make the hand-off, and what those inheritors do with the assets they receive.

Money is consolidating with women, who favor mission-based investing

Eventually most of the boomer $84 trillion is expected to be passed on to Gen Z and millennial heirs, with a sliver going to charities. We’ve already seen examples of the shift.

Women typically outlive male partners. Coupled with so-called “gray divorce,” as many as 4 in 5 women are expected to manage their own household finances in their lifetimes.

Many already are, giving rise to a dramatic shift in the makeup of early-stage business investing, according to a report from the Center for Venture Research at the University of New Hampshire. Women made up nearly 40% of angel investors in 2022. A decade earlier it was only 22%.

Women in these younger generations appear to be handling their money differently than their parents, said Sears, of UBS Americas: “90% of women saw money as a tool to help fulfill their purpose.”

And their wealth is due to swell.

“Women in the US already controlled $11 trillion,” Sears said. “That number could reach $30 trillion by the end of this decade.”

Generational transfer as an opportunity to redistribute wealth

Globally last year, new billionaires accumulated more wealth through inheritance than entrepreneurship for the first time since UBS Americas started tracking.

“More than $10 trillion of [wealth] is in existing businesses that are in the hands of business owners,” said Leverette, of Apis & Heritage. The risk, he said, is that the assets “end up transferring in traditional ways that leave them in the hands of a smaller group of people.”

That’s where Leverette’s unusual private equity firm intends to make a difference. Apis & Heritage facilitates employees buying the companies they work for.

The work is timely. Forty years ago, nearly a third of businesses transferred to a family member, Leverette said, while now it’s only about 15%. If an aging entrepreneur or a reticent inheritor of a family business wants to sell, Leverette’s team helps employees make the purchase. It’s another model of the growing, if tiny, employee ownership movement.

In her philanthropic role at UBS, Sears has invested in several organizations and programs intending to shift where and how that $84 trillion is deployed. (Read Technical.ly’s special report on inclusive entrepreneurship investments.)

She and Leverette both push back against the assumption that wealth inequality will get worse because of this generational transfer.

“The transition,” Sears said, “marks a shift about how capital can be directed to address some of our most pressing issues.”

This piece first appeared in Technical.ly CEO Chris Wink’s Builders newsletter. It features tips on growing powerful teams and dynamic workplaces. Sign up to get more pieces like this in your inbox before they appear on our site.