Families in the Middle East to See $1 Trillion Transfer of Generational Wealth

Today, Euroclear, the world's top provider of financial markets infrastructure, Julius Baer, the global Swiss wealth management firm, and DIFC Innovation Hub, the region's largest innovation ecosystem, released a whitepaper outlining how technology is altering wealth transfers and highlighting ways to make them more efficient, especially in the Middle East.

At a time when the region is about to undergo a historic transfer of US$1 trillion (AED3.67 trillion) in wealth to heirs and extended family members, Navigating the Future of Inheritance report discusses the challenges of inheritance. This includes high net worth individuals in the United Arab Emirates, whose assets have increased by 20% since 2022 to a total value of US$700 billion.

Digital technologies that promise to lower friction, increase transparency, and guarantee safe, effective asset transfers include distributed ledger technology, tokenization, artificial intelligence, and smart contracts.

Only 24% of high-net-worth individuals currently have a complete estate plan in place, according to the report, despite these new technologies, underscoring the pressing need for better inheritance procedures.

More than half of families (53%) think that gathering, documenting, and planning how to divide assets among possibly large families is simply too difficult and time-consuming.

In order to build a strong platform for wealth transfer and promote adoption, the report emphasizes the significance of tight cooperation between wealth managers, family offices, regulators, and service providers.

"In a time when wealth portfolio compositions are becoming more complex due to expanding asset categories and a desire for investments in digital assets, we stand on the cusp of a monumental generational wealth transfer in the Middle East," stated Mohammad Alblooshi, CEO of DIFC Innovation Hub. Our collaboration with Julius Baer and Euroclear produced this report with the goal of taking advantage of this turning point and promoting significant change throughout the inheritance process.

Our objective is to use cutting-edge digital technologies to seize future opportunities and establish the Middle East as a leader in wealth transfer best practices.

"Generational wealth transfer is gaining momentum in the United Arab Emirates and the wider Middle East, and we, as Julius Baer, are in a unique position to advise our clients having had our origins as a family business," stated Alireza Valizadeh, CEO of Julius Baer (Middle East) Ltd. With the advent of digital assets, it is more crucial than ever to consider the changing landscape as we work closely with both present and future generations. We are becoming more and more aware of how technology, especially blockchain and tokenization, can facilitate a safe and open wealth transfer process.

"We are very happy to take this next step with the DIFC Innovation Hub and Julius Baer in the launch of this report with the objective of explaining the evolving inheritance landscape and its transformative potential," stated Isabelle Delorme, Global Head of Product Strategy and Innovation at Euroclear. Together, we have created an extensive guide to cover the numerous opportunities and particular regional challenges in this industry. Our goal is to enable policymakers and financial stakeholders to embrace innovation, encourage efficiency, and create an inheritance framework that is ready for the future and will benefit future generations."