The great wealth transfer could be over $100 trillion or $36 trillion

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.

A new estimate for the great wealth transfer has sparked a debate over how many trillions of dollars will pass from baby boomers to their heirs, and how it will be spent and invested.

Last week, Visa Business and Economic Insights released a new projection for the great wealth transfer, estimating that $36 trillion in baby boomer wealth will be passed down to Gen X and millennials over the next 20 years. The figure is a fraction of the widely cited estimate from Cerulli Associates, which says $105 trillion will pass from older generations to heirs by 2048.

The more than $60 trillion gap between the two studies has raised new questions about the size and impact of the great wealth transfer. Some say it will be the largest in history, dramatically reshaping wealth management, charity and the global wealth landscape. Others say its impact will be far more limited and simply marks a continuation of long-term inheritance trends.

The dueling Visa and Cerulli numbers highlight just how important the estimates have become for wealth managers and other companies overhauling their businesses to prepare for the next generation of wealth.

Visa, as a credit card payments company, focuses its study on the amount of inherited wealth that will be spent by everyday American consumers. Cerulli, being a financial research firm, focuses its study on the total wealth being transferred, including the outsized share of fortunes being passed down by the ultra wealthy. While Cerulli focuses on all wealth transfers in coming decades, Visa looked only at transfers from baby boomers.

“We wanted to go through and inspect how much money will actually be spent,” said Wayne Best, chief economist at Visa. “A lot of people think about the $93 trillion or $124 trillion and think ‘All that money’s going to be available for spending; this is going to be incredible.’ That’s why we went through the kind of the step-by-step process.”

Visa’s process started with the total amount of wealth held by today’s baby boomers, which it put at about $93 trillion. The report then stripped out liabilities, which includes mortgage debt, of $5 trillion and subtracted the wealth of the top 1%, estimated at $28 trillion.

Best said the top 1%, or those with wealth of at least $12 million, approach money very differently from the rest of consumers. They spend a much smaller share of their wealth and they tend to buy different things.

“They don’t spend like the rest of us,” Best said. “They’re buying yachts and airplanes. It’s all great for the economy, but that’s not what the average person really thinks of. So we removed that top 1%, to put this more on a normal or level playing field.”

Visa then stripped out the retirement spending of baby boomers,…