Thursday, January 30, 2025
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Middle East to witness $1tr generational wealth transfer by 2030

HNWIs in the UAE alone have seen their collective assets reaching a staggering $700bn

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DUBAI: The Middle East is on the brink of an unprecedented generational wealth transfer, with approximately $1 trillion (AED3.67 trillion) set to be passed to heirs and extended family members by 2030.

Against this backdrop, the DIFC Innovation Hub, Julius Baer, and Euroclear have jointly released a whitepaper titled ‘Navigating the Future of Inheritance,’ which examines how technology is transforming the process of wealth transfer and highlights opportunities to streamline inheritance planning in the region.

The report underscores the growing complexity of inheritance processes, particularly in the Middle East, where High Net Worth Individuals (HNWIs) in the UAE alone have seen their collective assets grow by 20 per cent since 2022, reaching a staggering $700 billion.

Role of technology

Emerging digital technologies such as Artificial Intelligence (AI), Smart Contracts, Distributed Ledger Technology, and Tokenisation are highlighted as promising solutions to reduce friction, improve transparency, and enhance the security and efficiency of asset transfers.

Despite these advancements, the report reveals that only 24 per cent of HNWIs have a comprehensive estate plan in place, with 53 per cent citing the process as overly complex and time-consuming.

The whitepaper emphasises the need for close collaboration between wealth managers, family offices, regulators, and service providers to create a robust platform for wealth transfer.

This is particularly critical as families contend with increasingly diverse and complex asset portfolios, including growing investments in digital assets.

Mohammad Alblooshi, CEO of DIFC Innovation Hub, stated:
We stand at the threshold of a monumental generational wealth transfer in the Middle East. This report, developed in collaboration with Julius Baer and Euroclear, seeks to leverage this pivotal moment and drive meaningful change in the inheritance journey”.

He said by harnessing emerging digital technologies, Innovation Hub aims to position the Middle East as a global leader in best practices for wealth transfer.

Expertise in action

Alireza Valizadeh, CEO of Julius Baer (Middle East) Ltd, highlighted the institution’s role in facilitating generational wealth transfer, noting:
“As a family business ourselves, Julius Baer is uniquely positioned to guide clients through this evolving landscape, especially as digital assets reshape the future of inheritance.”

Beyond inheritance, the report also touches on the differing needs of family businesses, depending on their stage of growth.

To address these varied requirements, DIFC offers a range of flexible family business structures and solutions, detailed in a new series of guides aimed at fostering sustainable growth across generations.

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