The Middle East is set to witness an unprecedented $1 trillion transfer of wealth by 2030, with High Net Worth individuals (HNWIs) in the UAE experiencing significant growth in assets, which have surged by 20% since 2022 to hit $700 billion. This historic wealth transition is made all the more complex by the increasingly diversified nature of assets, which now encompass everything from traditional real estate and investments to digital assets like cryptocurrency.
Emerging digital technologies such as artificial intelligence (AI), blockchain, smart contracts, and tokenization are offering promising solutions to streamline and secure this generational wealth transfer, addressing the rising demand for transparency and efficiency in asset distribution. According to Mohammad Alblooshi, CEO of DIFC Innovation Hub, “We are at the crossroads of a monumental generational wealth shift in the Middle East, at a time when wealth portfolios are increasingly complex.”
Follow THE FUTURE on LinkedIn, Facebook, Instagram, X and Telegram
Increased Complexity In The Inheritance Process
Despite the potential of new technologies, the wealth transfer process remains incredibly complicated. A recent report from DIFC Innovation Hub, Julius Baer, and Euroclear reveals that only 24% of HNWIs have comprehensive estate plans in place. Many families are overwhelmed by the task of managing diverse assets and the allocation process, with over half of them citing the challenge of organizing wealth across large families as too time-consuming and complex.
Historically, inheritance was limited to physical assets like land or gold, but today’s wealth is spread across multiple asset classes, including real estate, investments, art, and even crypto. The changing nature of wealth demands a corresponding evolution in the processes that support it, creating the need for a new ecosystem to manage this growing complexity.
Human Factors Hampering Wealth Transfer
The wealth transfer system, however, faces significant barriers due to human challenges. A substantial 73% of wealth holders are reluctant to engage in discussions about legacy planning, even with their most trusted advisors, which can delay or complicate wealth transfers. Over half of all wealth transfers face delays due to insufficient preparation, legal hurdles, and probate processes that can extend up to 12 months. This often results in wealth being temporarily inaccessible, subjected to legal scrutiny, and incurring hefty fees, which weakens the financial legacy passed on to future generations.
Digital Technology As A Key To Preserving Wealth
To address these challenges, wealth managers in the Middle East must rethink how they approach the transfer of assets. Digital innovations, particularly blockchain and AI, are beginning to reshape the inheritance landscape by offering greater visibility, faster transfers, and fewer obstacles. As Alireza Valizadeh, CEO of Julius Baer Middle East, explains, “The onset of digital assets calls for a new approach to legacy management that promotes readiness and reduces friction.”
The Role Of Regulation In Building Trust
For these new technologies to gain widespread acceptance, regulatory support will be crucial. A unified approach between wealth managers, service providers, and regulators will help build a secure, scalable wealth transfer platform that not only protects assets but ensures equitable distribution, securing long-term financial stability for future generations.
As the Middle East moves toward a digital-driven future, these advancements will play a pivotal role in preserving wealth across generations.
