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More people in the UAE expect an inheritance, but is the amount ever ‘enough’?

New research from Quilter International and Quilter Cheviot shows that while more people expect to receive an inheritance, the amount of money anticipated may not be enough to secure the financial future aspired to.

Most people want to use their inheritance to buy a house (36%) or start a business (32%) People now expect around AED 30,400 less in inheritance than last year The average expected inheritance stands at AED 1,047,436 ($285,169)

New research from Quilter International and Quilter Cheviot shows that while more people expect to receive an inheritance, the amount of money anticipated may not be enough to secure the financial future aspired to.

At the end of 2019, 60% of respondents believed they will receive an inheritance, representing a 5% increase compared to when they were asked the same question in 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.

However, 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.

The average expected inheritance now stands at AED 1,047,436 ($285,169), which has dropped by AED 30,381 (8,271) since 2018.

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Paul Evans, head of region, Middle East & Africa, Quilter International, comments:

“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.

“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.”

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Mark Leale, Senior Executive Officer, Quilter Cheviot Limited (DIFC Branch): adds:

“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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