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Coming soon: The biggest wealth transfer in history

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As the world's richest individuals approach retirement, the next three decades will see trillions fall into the hands of their younger family members-the biggest wealth transfer in history from one generation to the next, according to a new report. At least $16 trillion of ultra-high net worth (UHNW) individual's wealth will be passed on to the next generation over this period, spawning a new crop of multimillionaires, the Wealth-X and NFP Family Wealth Transfers Report published on Tuesday said. "As self-made UHNW baby boomers start passing on their wealth to their children, the importance of entrepreneurship and hard work will be put to the test," the report said.

The world's population of ultra high-net worth individuals-those with at least $30 million in assets-grew to 211,235 last year, with a combined wealth of $29.7 trillion, a record high for both population and wealth.

The U.S., home to the largest billionaire population, will see the greatest amount of wealth transfers, with $6 trillion set to change hands over the next 30 years. Germany, Japan, the U.K. and Brazil follow as the countries with the largest expected wealth transfers-a target for estate planners.

Cash or assets? Around 30 percent of the net worth of these individuals' wealth is in liquid assets, allowing more flexibility for the next generation to invest and spend their inheritance as they like.

Read More Billionaires who made and lost the most in 2014 However, a large chunk of wealth that is due to be transferred is also concentrated in the ownership of privately held businesses. "A significant number of heirs of UHNW individuals will not want to take over the responsibility of running these companies on a day-to-day basis, and this will lead to large opportunities for sales and public offerings of these companies, and ultimately to the release of even more cash for investments and spending by the next generation," the report said.

Planning is critical Without adequate planning, the ultra wealthy could lose up to half of their fortunes through inheritance taxes, the report warns. Estate taxes in some developed countries including Japan and Germany are as high as 50 percent of the wealthiest people's net worth. "With two thirds of the world's wealthiest being first generation wealth creators, the coming years will be the first time they have been involved in wealth succession planning," the report said. "Those in the second or third generation of wealth will have had greater experience with wealth transfers, and will have most likely had the opportunity to learn about wealth succession planning from their parents."