Wealthy individuals in the Middle East have the most trust in their children when it comes to inheritances and are the least likely to engage in disputes over passing on their wealth, a new report has found.
Some 87 percent of the region’s rich say they trust their children and step-children when it comes to passing out their riches, according to a report by Barclays Wealth.
The survey, which polled 2,000 HNWIs globally, said wealthy individuals in emerging markets such as Middle East, Africa and Latin America display the least amount of uncertainty when it comes to trusting their children to look after their wealth.
Of those polled in Africa and Latin America, 77 percent and 75 percent respectively, said they trusted the next generation compared to 69 percent in Asia Pacific, 62 percent in Europe, 61 percent in North America and 59 percent in Australia.
Globally 95 percent of HNWI said they planned to pass on their wealth but 40 percent said they had direct conflict as a result of family wealth. Disputes are highest amongst families in India where 61 percent admitting having encountered arguments compared to 53 percent in Singapore and 51 percent in Monaco.
“In the case of wealth that has been inherited, tensions around entitlement may lead to disputes. However, it is surprising just how many wealthy respondents report experiencing such conflict and the impact that source of wealth can have on this, with wealthier respondents more likely to have encountered such conflict,” Catherine Grum, director of wealth advisory at Barclays Wealth said in a statement.
The higher level of wealth, the more likely families are to experience conflict, noted the report. “Those with higher levels of wealth or more than £10m ($15.7m) (44 percent) and those that have inherited wealth (46 percent) are more likely to have experienced such conflict,” it said.
“Yet the reverse rings true for earned wealth, as those with a higher income are less likely to find that wealth causes conflict. Globally, 43 percent of respondents earning a salary less than £100,000 cite that they have experienced conflict due to family wealth, compared to only 37 percent of those earning over £500,000,” it added.
The vast majority of respondents agreed that their wealth should be passed down to the next generation with only four percent saying this would not be the case. Globally, 70 percent of HNWI said they agreed that when it comes to wealth it should be divided up equally amongst their children.