A massive generational wealth transfer of more than $1 trillion is set to take place in the Middle East by 2030, but outdated legal frameworks, fragmented succession planning, and a lack of financial literacy are creating challenges that could disrupt the process, according to a new report from DIFC, Julius Baer, and Euroclear.
The study, Navigating the Future of Inheritance, highlights that while the region’s wealth is growing rapidly, many high-net-worth individuals (HNWIs) remain unprepared for the handover. One in four (24%) do not have an inheritance plan, while more than half of transfers face delays due to legal obstacles and probate complexities. The absence of standardised succession laws across jurisdictions further complicates cross-border wealth distribution.
“There is a pressing need for better legal infrastructure, financial literacy, and robust governance to ensure that wealth is transferred smoothly and efficiently,” the report states.
Legal and structural challenges
A significant roadblock is the reliance on Sharia-based inheritance laws, which automatically divide assets among heirs, sometimes leading to disputes. Unlike Western jurisdictions, where trusts and structured inheritance vehicles are common, the Middle East lacks a uniform legal framework that simplifies the process. The report notes that wealth fragmentation and family disputes remain the leading causes of lost wealth in the region.
Efforts to modernise the system are underway, with Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) introducing wills and probate services modelled on common-law principles. These initiatives aim to provide expatriates and wealthy families with more flexibility in structuring their legacies. However, the adoption of such mechanisms remains low, with only 15% of HNWIs in the region opting for DIFC wills or similar structures.
Digital and institutionalised wealth management
Another trend highlighted in the report is the increasing institutionalisation of wealth management. Second-generation family members are moving away from informal inheritance structures and favouring professional wealth managers, family offices, and private banks. Digital platforms also play a greater role, enabling the real-time tracking of assets and reducing risks associated with mismanagement.
“Families that fail to adopt structured wealth planning mechanisms risk wealth erosion over time,” the report warns. The shift toward AI-driven wealth advisory and blockchain-based digital wills is expected to gain traction as more investors seek transparency and efficiency in estate planning.
Succession planning
One of the biggest risks remains a lack of preparedness among heirs. The report found that only 38% of next-generation inheritors have formal financial education or experience managing wealth, raising concerns over their ability to sustain family fortunes.
Financial institutions are increasing efforts to educate clients on succession planning, governance structures, and tax-efficient wealth transfers to bridge this gap. In Saudi Arabia and the UAE, private banks and advisory firms are seeing a rise in demand for customised family constitutions and governance models to prevent conflicts and ensure smooth transitions.
A changing investment mindset
The new generation of inheritors is expected to diversify wealth beyond traditional assets like real estate and gold. There is growing interest in private equity, ESG-driven investments, and digital assets, marking a shift in investment philosophy.
The report concludes that while the region is experiencing unprecedented economic expansion, without clear inheritance planning and legal reform, a significant portion of wealth could be lost to disputes, mismanagement, and bureaucratic hurdles.
As wealth continues to transition across generations, governments, financial institutions, and families will need to work together to create a more resilient, future-proof inheritance system.
