UAE survey reveals fall in inheritance values

Pedro Gonçalves
UAE survey reveals fall in inheritance values

While more people in the UAE expect to receive an inheritance, the amount of money anticipated may not be enough to secure the financial future aspired to, according to research from Quilter International and Quilter Cheviot.

Quilter International and Quilter Cheviot surveyed 130 UAE-based investors with $50,000 and found 60% of respondents believe they will receive an inheritance, 55% increase from 2018.

The most popular use for an inheritance is to buy a house (36%) followed by starting their own business (32%) or using it for other investments (32%). Nearly one quarter (23%) plan to invest their inheritance for the future or save it for retirement. A further 12% will leave their inheritance in cash and 6% plan to spend it all.

Making sure that money is put to good use is crucial and getting financial advice can be the essential ingredient if a person is to achieve their monetary goals"

According to Property Monitor's 2020 February Dubai House Price Index, the average house price in the city is over AED 3 million ($816,764), far more than the average anticipated inheritance. However, the average expected inheritance now stands at AED 1,047,436 ($285,186), which has dropped by AED 30,381 ($8,271) since 2018. Not enough to buy a house.

"An inheritance can represent the most money someone will ever receive in their life. However, people often depend on it to deliver their financial aspirations such as buying a property or starting a business. These are expensive objectives and money from an inheritance will need to be carefully managed if it is to help them achieve these ambitions." Paul Evans, head of region, Middle East & Africa, Quilter International, said.

"Therefore making sure that money is put to good use is crucial and getting financial advice can be the essential ingredient if a person is to achieve their monetary goals. A financial adviser can help take stock of someone's whole wealth and enable a client to plan accordingly. Many clients want to make long term investments with the potential expectation that they will help them throughout their life and into retirement, which can be a tricky task and requires professional help," he added.

Mark Leale, senior executive officer, Quilter Cheviot Limited (DIFC Branch), said: "We would always encourage clients to plan for the future using their own capacity to save, rather than relying on the possible receipt of an inheritance, which is subject to many variables, typically outside of their control. This may be as simple as whether you are chosen as a beneficiary of a will, the impact of taxes or the amount that is available to be gifted. An inheritance will come from the balance of someone's wealth, which has not been spent during their lifetime. With people living longer, this amount could be much less than anticipated.

"Should you be fortunate to receive an inheritance, it is possible that this does allow you to rethink your future, as highlighted by our research. It is essential that before major decisions are made, you take stock of your options, taking independent advice where appropriate. At Quilter Cheviot, we have many clients that have worked with us for generations. A close relationship with our clients and their advisers allows us to help manage this transition of wealth, accommodating the varied needs of different family members."


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