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Barclays Wealth Insights

Volume 14: The Transfer of Trust
Wealth and Succession in a Changing World
In co-operation with Ledbury Research
1
Foreword About Barclays Wealth
Barclays Wealth is a leading global wealth manager, and the UKs largest, with total client assets of 170bn, as at
30 lune 20!!. \|n olfces |n over 20 counr|es, Earc|ays \ea|n locuses on pr|vae and |nerned|ary c||ens vor|dv|de,
prov|d|ng |nerna|ona| and pr|vae ban||ng, |nvesnen nanagenen, fduc|ary serv|ces and bro|erage.
Earc|ays \ea|n |s ne vea|n nanagenen d|v|s|on ol Earc|ays.
Earc|ays |s a najor g|oba| fnanc|a| serv|ces prov|der engaged |n rea|| ban||ng, cred| cards, corporae and |nvesnen
ban||ng and vea|n nanagenen v|n an exens|ve |nerna|ona| presence |n Europe, ne Aner|cas, Alr|ca and As|a.
\|n over 300 years ol n|sory and exper|se |n ban||ng, Earc|ays operaes |n over S0 counr|es and enp|oys over
!4S,000 peop|e. Earc|ays noves, |ends, |nvess and proecs noney lor cusoners and c||ens vor|dv|de.
For lurner |nlorna|on abou Earc|ays \ea|n, p|ease v|s| our vebs|e www.barclayswealth.com
Follow us on www.twitter.com/barclayswealth and www.twitter.com/wealthinsights
Barclays Wealth does not endorse any website or third-party company referenced in this article. Such discussions
are for informational and discussion purposes only.
About this report
Researcned by Ledbury Researcn and vr|en |n conjunc|on v|n Earc|ays \ea|n, n|s !4n vo|une ol Barclays
Wealth Insights |nves|gaes ne |npac ol vea|n on lan|||es and ne p|ans ol g|oba| n|gn ne vorn |nd|v|dua|s
to transfer that wealth in the future.
l |s based on vo na|n srands ol researcn. F|rs|y, Ledbury Researcn conduced a survey ol nore nan 2,000 n|gn
ne vorn |nd|v|dua|s, a|| ol vnon nad over ! n||||on (or equ|va|en) |n |nvesab|e asses and 200 v|n nore nan
!0 n||||on. Respondens vere dravn lron 20 counr|es around ne vor|d, across Europe, Norn Aner|ca, Soun
Aner|ca, ne M|dd|e Eas and As|a-Fac|fc. Tne |nerv|evs oo| p|ace dur|ng lanuary and February 20!!. ln ne
ana|ys|s, |nd|v|dua| counr|es v|n lever nan S0 respondens nave on|y been |nc|uded |n ne reg|ona| fnd|ngs.
Second|y, Ledbury Researcn conduced a ser|es ol |nerv|evs v|n acaden|cs, proless|ona|s and oner expers
lron around ne vor|d. Our nan|s are due o ne |nerv|evees lor ne|r |ne and |ns|gn.
For information or permission to reprint, please contact Barclays Wealth at:
44 (0)!4! 3S2 39S2 or email Barclays.wealthinsights@barclayswealth.com
Fass|ng on vea|n, va|ues and a |egacy nas been a ne near ol fnanc|a| p|ann|ng lor |nd|v|dua|s lor nany cenur|es.
Frov|d|ng lor ne fnanc|a| needs ol surv|v|ng |oved ones |s becon|ng ever nore s|gn|fcan and conp|ex aga|ns
a bac|drop ol g|oba| fnanc|a| urno|| and a nyr|ad op|ons. l br|ngs un|que cna||enges bon |n erns ol na||ng
ecnn|ca| arrangenens, and na||ng ne ougn dec|s|ons na ne d|v|s|on ol vea|n can presen.
ln snor, success|on and ne process ol pass|ng on vea|n ra|ses nany ques|ons, no on|y abou nov o a||ocae
naer|a| vea|n, bu a|so abou nov o ensure n|s vea|n goes as lar as poss|b|e o ne|p cn||dren acn|eve ne|r luure
anb||ons. \|sdon, exper|ence and gu|dance are a lundanena| par ol success|on p|ann|ng and v||| ne|p o equ|p
ne nex genera|on v|n ne s||||s needed lor success.
Our |ndusry nas |ong locused on ne|p|ng |nd|v|dua|s prepare lor ne presen, as ve|| as ne luure, and a Earc|ays
Wealth this is the core of our business. As the global economic landscape changes and so too does the shape and
dynan|c ol ne nodern lan||y | ra|ses ques|ons lor nose p|ann|ng o pass on ne|r vea|n.
Tnese ques|ons are exp|ored |n The Transfer of Trust: Wealth and Succession in a Changing World, the fourteenth
vo|une |n ne Barclays Wealth Insights ser|es. ln ne repor, ve |oo| a ne a|udes ol vea|ny |nd|v|dua|s across ne
g|obe ovard vea|n ransler and success|on p|ann|ng. \e exan|ne ne re|a|onsn|p beveen vea|n and napp|ness,
nov vea|ny |nd|v|dua|s p|an on d|v|d|ng ne|r vea|n, and |oo| a ne broader ou|oo| lor ne nex genera|on.
\or||ng once aga|n |n parnersn|p v|n Ledbury Researcn, ve nave surveyed nore nan 2,000 vea|ny |nd|v|dua|s
vor|dv|de, and nave |nerv|eved a ser|es ol expers vno nave prov|ded ne|r |npu.
Fron n|s |ne|||gence ve nave produced a repor na ne|ps us creae a v|v|d p|cure ol vea|n ransler and success|on
p|ann|ng on a g|oba| sca|e, vn|cn ve nope can ne|p |nd|v|dua|s prepare lor nese |nporan dec|s|ons.
l nope na you fnd n|s |aes vo|une ol Insights an interesting and inspiring read.







Thomas L. Kalaris
Cn|el Execu|ve
Barclays Wealth
3 2
Our lns|gns Fane|
\e are exrene|y graelu| lor ne |ne and ne|p lron ne expers on ne lns|gns Fane|.
Peter Collett, Fsycno|og|s and lorner Oxlord Acaden|c
Shaunaka Das, D|recor ol ne Oxlord Cenre lor H|ndu Sud|es
Marcus Dearle, Manag|ng Farner ol ne |nerna|ona| |av frn \|ners LLFs Hong Kong olfce
Niall Glynn, Farner a De|o|e, lre|and
Catherine Grum, D|recor, \ea|n Adv|sory a Earc|ays \ea|n
Emily Haisley, Eenav|oura| F|nance a Earc|ays \ea|n
Sue Medder, Farner |n ne Conen|ous Truss and Success|on Croup a ne |nerna|ona|
|av frn, \|ners LLF
Gareth Morrell, Researcn D|recor |n ne Soc|ey and Cnange Tean a ne Na|ona| Cenre
for Social Research
Dr Wendy Piatt, D|recor Cenera| ol ne Russe|| Croup
Shimon Takagi, Farner a \n|e & Case |n To|yo
Professor Orit Tykocinski lron ne lnerd|sc|p||nary Cener (lDC) Herz||ya
Richard Watson, Fuuro|og|s and Founder ol \nas Nex
Introduction
Tne pyran|ds ol anc|en Egyp are a |as|ng |egacy o ne
Fnaraons, ru|ers vno |ns|sed on be|ng bur|ed v|n ne|r
vea|n |n ne be||el na nese r|cnes cou|d be a|en |no
an afterlife. Whilst some of their architectural legacy has
surv|ved ne pas lour nousand years, a|udes ovards
vna nappens o vea|n and success|on nave cnanged.
Whilst we may still be concerned with the legacy we
|eave ben|nd, nos peop|e nov accep ne adage "you
can a|e | v|n you. Tnere rena|ns ne ques|on ol
nov o |npar no on|y a |egacy ol fnanc|a| sab|||y o
ne nex genera|on, bu a|so va|ues and gu|dance lor
a successful life.
F|ann|ng lor n|s ransler |s a cruc|a| sep |n ne vea|n
management process, and is also one of the most
|nporan. Ee|ng ab|e o prov|de lor ne fnanc|a| needs ol
surv|v|ng re|a|ves |s a spec|a| ||nd ol g|l, bu | can a|so be
exrene|y cna||eng|ng, no jus because ol ne ecnn|ca|
conp|ex|y ol na||ng appropr|ae arrangenens, bu a|so
because ol ne nard cno|ces abou nov o d|v|de vea|n.
Tnere appear o be nany lacors na |nd|v|dua|s a|e |no
consideration in succession planning, such as family and
cu|ura| expeca|ons, ne sacr|fces and conr|bu|ons na
lan||y nenbers nave nade, and even v|n vnon ney
best connect. Today, responsible succession planning also
neans n|n||ng abou ne |npac na |nner|ed vea|n
v||| nave on ne ||ves ol ne rec|p|ens. Farens nay vorry
whether their children will be good custodians of wealth,
or spend | rec||ess|y and |ose ne|r anb||on or even ne|r
nea|n. Cu|dance around nese poen|a| nurd|es can ne|p
to ensure their personal happiness and success.
To shed some light on this area globally, Barclays Wealth
surveyed 2,000 peop|e lron 20 counr|es, nen drev on
ne co||ec|ve v|sdon ol ne expers |n our lns|gns Fane|
to help interpret the results.
Our aims were to:
F|nd ou nore abou n|gn ne vorn |nd|v|dua|s v|evs
on ne ransler ol vea|n, |nc|ud|ng ne reserva|ons
ney nave abou na ransler, and ne nega|ve lacors
that can be associated with this.
Exp|ore ne |nporance ol success|on p|ann|ng and
fnanc|a| |egac|es across ne vor|d, and undersand
vna no|vaes peop|e o n|n| abou na||ng ne
necessary arrangements.
Undersand nov vea|ny |nd|v|dua|s across ne
g|obe see| o d|v|de vea|n anongs ne|r cn||dren
and approacn success|on p|ann|ng, and spec|fca||y
undersand nov ney use ven|c|es sucn as v|||s
and trusts.
See| ou ne v|evs ol n|gn ne vorn |nd|v|dua|s
on ne cna||enges ney be||eve are laced by ne nex
generation and how that generation should best
equ|p |se|l.
S 4
Execu|ve Sunnary
Wealth and happiness: Our survey confrns ne pos||ve
relationship between income and one measure of
napp|ness. fnanc|a| napp|ness. \e fnd ne sane seady,
|ncreas|ng re|a|onsn|p as |ncone |eve|s r|se. Hovever, our
researcn fnds na ne source ol vea|n |s |nporan,
there is a stronger relationship between wealth and
happiness when it is earned, rather than inherited.
Wealth can beget family conflict: Some 40% of high
ne vorn |nd|v|dua|s nave nad persona| exper|ences ol
lan||y vea|n |ead|ng o conf|cs. \e lound na nose
v|n nore vea|n and nose vno nave |nner|ed ne|r
vea|n are nore |||e|y o nave exper|enced sucn
lan||y conf|cs.
The importance the wealthy place on succession
planning does not increase with age: Tne perce|ved
importance of succession planning by high net worth
|nd|v|dua|s does no |ncrease on a sra|gn-||ne bas|s
with age. Instead, it is most important in the earliest
and the latest age categories. Our analysis shows that
nose under S4 n|n| abou n|s aler narr|age, and ne
purcnase ol propery and |nner|ance, vn||s nose over
S4 n|n| abou n|s |n advance ol |nner|ance and ne
sale of a business. After retirement, high net worth
|nd|v|dua|s are genera||y |ess concerned abou
succession, as they enjoy a stage in life where they
are able to place more emphasis on their own needs.
Wills and disinheritance: Our research shows that 23%
of high net worth respondents around the world do not
nave a v|||. Tn|s |s a surpr|s|ng|y n|gn nunber, and un|ess
an |nd|v|dua| ||ves |n a jur|sd|c|on na nas exp||c| vea|n
ransler |avs, cou|d presen d|lfcu||es vnen | cones
o ranslerr|ng vea|n. Sone C9% ol vea|ny |nd|v|dua|s
nave rev|sed ne|r v|||s a |eas once and 2C% nave
rev|sed nen nree or nore |nes. On ne norny |ssue
ol d|s|nner|ance, ve fnd na as nany as !0% ol ne
vea|ny nave d|s|nner|ed soneone or cu a lan||y
nenber ou ol ne|r v|||s. \e a|so |oo| a ne use
ol russ and |nsurance as a|erna|ve p|ann|ng oo|s.
The gender gap: Our researcn fnds na n|gn ne
worth women say they place less importance on
success|on p|ann|ng nan nen, v|n jus 49% ol
vonen be||ev|ng | o be |nporan conpared v|n
C0% ol nen. Anoner |nporan fnd|ng revea|s na
vn||s nere |s a srong endency ovards d|v|d|ng asses
equa||y anongs cn||dren sone 70% prelerr|ng n|s
approacn nere are excep|ons vnere gender or b|rn
order assume more importance.
Trust is a key element: Our survey fnds na across ne
vor|d, 34% ol ne vea|ny are e|ner anb|va|en or do
not trust their children and stepchildren to protect their
|nner|ance. Cenera||y ne vea|ny surveyed |n deve|oped
economies appear to trust their children less to protect
vea|n nan ne n|gn ne vorn |nd|v|dua|s surveyed |n
energ|ng counr|es. Add||ona||y, a a lan||y |eve|, ve see
na |nd|v|dua|s |n ne|r frs narr|age end o rus ne|r
cn||dren nore. Cenera||y, nose v|n sepcn||dren rus
their children less.
Words of wisdom: As|ed abou luure cna||enges,
ne nunber one se|ec|on lor SC% ol ne vea|ny |s
economic turbulence. This is consistently important
across a|| ol ne surveyed reg|ons, and |s a refec|on ol
the scale and unrelenting economic problems we face.
\nen | cones o vna subjecs ne nex genera|on
snou|d sudy, ne vea|ny are adanan na ne nex
genera|on snou|d locus on ecnn|ca| subjecs |||e lT/
technology, mathematics and science. Their top choice
ol |anguage o |earn |s Cn|nese, spec|fca||y Mandar|n.
Our survey fnds na across ne vor|d,
34% ol ne vea|ny are e|ner anb|va|en or
do not trust their children and stepchildren
to protect their inheritance. There are trust
issues in all the major regions; generally
nose |n ne deve|oped econon|es rus ne|r
children less than in emerging countries.
7 6
Aler g|v|ng nen ||le, d|rec|ng ne|r every sep and
|nves|ng so nucn |n nen, odays vea|ny nay be
nervous abou nand|ng over conro| and ovnersn|p
of their personal and business assets to their children.
The transfer of their material, income-generating
creations to their human, cost-incurring ones, can be
an exrene|y daun|ng propos||on.
Succession,
a crucial wealth
challenge
Yet it is something that increasing numbers of wealthy
|nd|v|dua|s nave o grapp|e v|n no jus |n ne
age|ng deve|oped counr|es, bu a|so |n ne energ|ng
economies. Indeed, inheritance is a more important
source ol vea|n lor n|gn ne vorn |nd|v|dua|s |n
energ|ng nar|es nan |n deve|oped ones, and as a
result all aspects of inheritance planning in these areas
are coming to the fore.
9 8
\ea|ny |nd|v|dua|s v|evs on vnener and nov o
ransler vea|n are par|y |nfuenced by ne|r va|ues,
which, in turn, are often learnt from their own parents.
On average, S9% ol n|gn ne vorn |nd|v|dua|s g|oba||y
sa|d ne|r va|ues vere very s|n||ar o nose ol ne|r
parens. ln genera|, |nd|v|dua|s |n deve|oped counr|es
are |ess |||e|y o nave s|n||ar va|ues o ne|r parens
generation than those in emerging countries.
Values are also passed down by parents
\n||s ney nay snare s|n||ar va|ues o ne|r parens,
the wealthy do not follow them as ardently in all things.
A neagre one |n fve, on average, sa|d na | |s |nporan
for them to follow in the footsteps of their parents in
terms of their careers or businesses.
One counry vn|cn frn|y buc|s n|s rend |s lnd|a,
vnere sone 8!% ol vea|ny lnd|ans surveyed be||eve | |s
important to follow in their parents footsteps. Shaunaka
Das, D|recor ol ne Oxlord Cenre lor H|ndu Sud|es,
exp|a|ns na |n ne lnd|an cu|ure nere |s a deep respec
lor parens and rad||on, and na |nd|v|dua|s be||eve |n
a ca|||ng or dnarna na |s very |nfuenced by ne naure
of ones family and ones obligations to them.
Tnere are sone oner reg|ona| excep|ons, sucn as |n
ne M|dd|e Eas and La|n Aner|ca, vnere lo||ov|ng |n
parents footsteps is a priority. In these regions, especially
ne M|dd|e Eas, respec lor ne lan||y |s a very |nporan
cu|ura| nene. Tne fnd|ngs a|so refec ne |nporance
of entrepreneurialism in these geographies, with
our researcn snov|ng a pos||ve corre|a|on beveen
entrepreneurialism and willingness to follow in
parents footsteps.
Chart 1 Source of Wealth
* % selecting Main source of wealth (multiple options allowed)
Source: Ledbury Research
Inherited
%Selecting each option*
Entrepreneur
Earned
0 20 60 40 80 100
18%
29%
15%
37%
59%
Developed
Emerging
51%
Singapore 51%
Ireland 53%
Monaco 64%
Spain 60%
Switzerland 63%
UK 57%
US 66%
Australia 62%
Hong Kong 41%
Japan 39%
Qatar 55%
South Africa 60%
UAE 68%
Chart 2 Personal Values
Total 59%
Saudi Arabia 78%
India 74%
* % who slightly agree or completely agree with the statement My values are very similar to my parents values
Source: Ledbury Research
% Agree*
0 20 60 40 80 100
Ireland 9%
Monaco 35%
Spain 22%
Switzerland 8%
UK 8%
US 12%
Qatar 49%
UAE 14%
South Africa 17%
Australia 9%
Hong Kong 35%
Japan 18%
Singapore 21%
Chart 3 Following in Parents Footsteps
Total 20%
Saudi Arabia 56%
India 81%
* % who slightly agree or completely agree with the statement It is important to me to follow in the footsteps of my parents in terms of career/business
Source: Ledbury Research
% Agree*
0 20 60 40 80 100
11 10
Tne |ssue ol |nner|ance and vea|n ransler |nev|ab|y
ra|ses ques|ons abou ne |npac on ne ||ves ol ne
rec|p|ens, and nov | v||| allec nen bon fnanc|a||y
and emotionally. Research into happiness is a growing
fe|d and nas resu|ed |n ne recogn||on ol d|lleren
ypes ol napp|ness and ne lacors na dr|ve nen.
Most people are sceptical of the idea that money leads to
happiness, but recent studies clearly show that money
and napp|ness are nore c|ose|y and d|rec|y ||n|ed nan
prev|ous|y nougn. One ol ne nos exens|ve ana|yses
recen|y conduced vas by \naron Scnoo| Econon|s
lus|n \o|lers. Sudy|ng daa lron !SS counr|es, ne
lound a c|ose and quan|fab|e ||n| beveen napp|ness
and income.
"A !0% r|se |n |ncone nas rougn|y ne sane allec (on
napp|ness) no naer vn|cn counry you are |n. So a !0%
r|se |n ne |ncone ol soneone |n Eurund| or Ha|| buys
abou as nucn exra napp|ness as a !0% r|se |n ne
|ncone ol soneone |n ne Un|ed Saes. Tnere (once)
vas n|s v|ev na once your bas|c needs vere ne,
lurner r|ses |n |ncone don na|e you napp|er. Tna v|ev
|s nos assured|y la|se. As you |eep |ncreas|ng average
|ncone you |eep |ncreas|ng average napp|ness. (lus|n
\o|lers, NFR "F|ane Money progran, Marcn 8, 20!!.)
Our researcn confrns n|s pos||ve re|a|onsn|p
between income and one measure of happiness:
fnanc|a| napp|ness. \e fnd ne sane seady, |ncreas|ng
re|a|onsn|p na does no |eve| oll. Hovever, source ol
wealth is important. Financial happiness is more closely
||n|ed o |ncone nan | |s o ne vorn acua||y
earn|ng vea|n seens o boos fnanc|a| napp|ness.
Refec|ng on ne |np||ca|ons ol n|s, Emily Haisley,
vno |s par ol ne Eenav|oura| F|nance Tean a Earc|ays
\ea|n, connens. "Farens snou|d be concerned abou
nov pass|ng on vea|n |npacs ne no|va|on |eve|s ol
ne|r cn||dren. \n||s nere |s an obv|ous benef ol vea|n
on health, freedom, satisfaction, etc., there is the worry
na | nay d|n|n|sn ne anb||on o vor| nard and
rea||se ne lu|f|nen na cones v|n |. Froduc|ve vor|
|s a good n|ng, | |s assoc|aed v|n |nense exper|ences
ol napp|ness accord|ng o ne vor| ol Fsycno|og|s
M|na|y Cs||szenn|na|y| (conversa|on v|n non-prof
organ|sa|on. TED, February 2004).
Sone ol ne bus|ness vor|ds greaes bra|ns nave
vres|ed v|n n|s ques|on ol nov o |e ne|r cn||dren
snare |n ne|r vea|n, vn||s encourag|ng nen o na|e
ne|r ovn nar| |n ||le. Legendary |nvesor, \arren Eulle,
|s quoed as descr|b|ng ne r|gn anoun o |eave cn||dren
as enougn na "ney vou|d lee| ney cou|d do anyn|ng,
bu no so nucn na ney cou|d do non|ng. To ne|p
accomplish this, he has strictly limited the amount of his
own fortune that his children will inherit. UK businessman
and TV persona||y, Feer lones, s|n||ar|y escnevs ne |dea
of simply transferring large-scale wealth to his children,
and instead has reportedly put in place a scheme that
nacnes vna ney earn every year lor ne res ol ne|r
||ves (The Times ol London).
Catherine Grum, D|recor, \ea|n Adv|sory a Earc|ays
Wealth specialising in succession planning, notes that
such concerns are common amongst clients, and that
there are many things which parents can do
to foster ambition within their children.
"Farens can de|ay ne ransler
ol vea|n un|| ney nave done
something under their own
sean, or f|er ne ransler
through a third party such as a
rusee vno can ac |||e a ap o
conro| ne fov, or even educae
nen on ne rue va|ue ol noney
nrougn cnar|ab|e projecs.
Money really can lead to happiness
"A !0% r|se |n |ncone nas rougn|y ne sane allec (on napp|ness)
no matter which country you are in. So a 10% rise in the income of
soneone |n Eurund| or Ha|| buys abou as nucn exra napp|ness
as a 10% rise in the income of someone in the United States
Tnere (once) vas n|s v|ev na once your bas|c needs vere ne,
lurner r|ses |n |ncone don na|e you napp|er. Tna v|ev |s nos
assured|y la|se. As you |eep |ncreas|ng average |ncone you |eep
|ncreas|ng average napp|ness.
Justin Wolfers, NPR Planet Money program, March 8, 2011
13 12
An unlorunae dravbac| ol vea|n |s |s ab|||y o cause
conf|c, and |n ne conex ol success|on, lan||y conf|c.
Tn|s |s a rea| |ssue |den|fed by our researcn, v|n 40%
ol n|gn ne vorn |nd|v|dua|s on average nav|ng persona|
exper|ence ol lan||y vea|n |ead|ng o conf|cs.
Fan||y vea|n beges lan||y conf|c
Conf|cs around success|on revea| a nu||ude ol nunan
proc||v||es. Connon|y, nese conf|cs are r|ggered by
|nd|v|dua|s vno lee| na ney naven rece|ved ne|r la|r
share of the wealth. Amongst children, there may be
nose vno lee| ney veren adequae|y revarded lor
ne car|ng respons|b||||es ney oo| on preced|ng ne
death of a parent. Where there are multiple spouses,
there may be those who feel entitled to more from
the estate, based on their contribution in creating it.
Eu d|spues nay a|so ar|se or be aggravaed by |ess
logical arguments and more emotional ones
par|cu|ar|y, nega|ve lee||ngs o oner nenbers ol ne
lan||y. Tnese eno|ons nay be |ep |n cnec| vn||s
ne par|arcn or |ndeed ne nar|arcn are s||| a||ve,
but emerge after their deaths.
Sue Medder, Farner |n ne Conen|ous Truss and
Success|on Croup a |nerna|ona| |av frn \|ners LLF,
notes that the multi-faceted family structure has certainly
conr|bued o ne r|se |n d|spues. "Youve go a r|se |n
second narr|ages, n|rd narr|ages, youve go cn||dren
from different marriages competing, not just against each
oner, bu aga|ns second or n|rd v|ves. Sne po|ns ou
na n|s |s exacerbaed by ne lac na |n sone reg|ons
lan|||es do no ||ve |n c|ose-|n| un|s and care |s prov|ded
exerna||y, lue|||ng c|a|ns nade by non-lan||y nenbers.
Chart 4 Wealth Leading to Family Conict (by wealth levels and income)
Total 40%
500,000
999,999
42%
250,000
499,999
38%
Under
50,000
46%
2m-5m 38%
1m-2m 40%
5m-10m 42%
50,000
99,999
42%
100,000
149,999
40%
1m or more 33%
10m+ 46%
150,000
199,999
39%
200,000
249,999
33%
0
' % who slighLly agree or conpleLely agree wiLh Lhe sLaLenenL ln ny experience, fanily wealLh has led Lo fanily conficL
Source: Ledbury Research
% Agree*
20 60 40 80 100
Net Worth
Income
But it decreases
with income
Conflict increases
with net worth
Chart 5 Wealth Leading to Family Conict
Total 40%
Hong Kong 51%
US 36%
India 61%
Japan 47%
Singapore 53%
South Africa 43%
Spain 47%
Switzerland 28%
Monaco 51%
UAE 32%
Australia 44%
UK 37%
Ireland 33%
Saudi Arabia 38%
Qatar 12%
' % who slighLly agree or conpleLely agree wiLh Lhe sLaLenenL ln ny experience, fanily wealLh has led Lo fanily conficL
Source: Ledbury Research
% Agree*
0 20 60 40 80 100
!S 14
Fsycno|og|s Peter Collett suggests that there may
be something more general about the nature of the
vea|ny na causes conf|c. "Feop|e vno vor| nard o
acqu|re vea|n are naura||y anb||ous and neyre olen
conpe||ve oo. Tne endency ol vea|ny peop|e o
becone enbro||ed |n lan||y conf|cs nay nerelore
nave a bas|s |n persona||y, and conf|cs nay ar|se lron
ne confdence and cera|ny |n ones ovn op|n|ons so
olen lound |n peop|e vnove becone r|cn nrougn ne|r
ovn ellors.
Faerns ol spend|ng and sav|ng a|so p|ay a ro|e |n
nese conf|cs. ln Eng|and, Sue Medder notes that
there is an entire baby-boomer generation who are
olen over-borroved, under-cap|a||sed, and cera|n|y
"under-saved. Tnese |nd|v|dua|s are |oo||ng o ne|r
ovn parens lor suppor |n ne|r o|d age. "ls refeced
|n ne lac na cn||dren are prepared o fgn vnen an
|nner|ance doesn go ne|r vay.
The transfer of family businesses from one generation
o ne nex can a|so be a source ol rea| lan||y lr|c|on,
as seen by respondents in India who say it is important
to follow in their parents footsteps, but also report
exper|enc|ng lan||y conf|c. Niall Glynn, Farner a
De|o|e, lre|and and aunor ol "F|ann|ng lor Fan||y
Eus|ness Success|on, n|gn||gns ne dangers ol
dec|s|ons abou ne bus|ness be|ng dr|ven by lan||y
|ssues raner nan bus|ness needs. He spec|fca||y
n|gn||gns ne r|s| ol |eav|ng nanagenen under ne
conro| ol |ess capab|e re|a|ves and d|v|d|ng ovnersn|p
so na nere |s jo|n conro| or even lracured conro|
amongst multiple families.
Amongst our respondents, we found that those who
nave |nner|ed ne|r vea|n (47% lor |nner|ed vs. 40%
no |nner|ed) and nose v|n nore vea|n (see Cnar 4)
are nore |||e|y o nave exper|enced sucn lan||y conf|c.
lneres|ng|y, ne reverse |s rue lor |ncone. nose v|n
n|gner |ncone are |ess |||e|y o fnd na vea|n causes
conf|c. Emily Haisley exp|a|ns ne reason ben|nd n|s.
"\nen soneone accunu|aes vea|n nrougn ne|r
persona| |ncone | |s nard o na|e c|a|ns on | | |s
accepted as fair that people should reap the rewards
ol ne|r ovn |abour. Norns ol en||enen lor vea|n
that is inherited are more ambiguous and can trigger
d|spues. Conf|c over |nner|ed vea|n can a|so ne|p
o exp|a|n vny ve see a sronger re|a|onsn|p beveen
|ncone and napp|ness nan ve observe beveen ne
vorn and napp|ness.
ln order o ry o n|n|n|se n|s conf|c, | |s abso|ue|y
essen|a| o undera|e proper success|on p|ann|ng.
Catherine Grum noes. "\nen | cones o se|||ng your
business, the planning process starts months or years
|n advance so na, vnen ne sa|e a|es p|ace, ne
lorner and nev ovners and a|| assoc|aes |nov vnere
ney sand and vna |s requ|red ol nen. You vou|dn
n|n| ol urn|ng up on ne day ol ne sa|e, nand|ng ne
boo|s over o ne nev nanagenen ean and snou|ng
surprise. Yet when passing wealth within families, this
|s ellec|ve|y vna olen nappens. \na are perce|ved
o be d|lfcu| conversa|ons are pu oll un|| | becones
too late, and when the patriarch or matriarch is no
longer around and no plans are in place, the dynamics
cnange and ne conf|cs beg|n.
C|ven ne |||e||nood ol conf|c, ve ven on o probe
whether or not the wealthy thought that inheritance
p|aced an "unnecessary burden on ne nex genera|on,
and lound na 29% ol a|| vea|ny |nd|v|dua|s be||eved
na | d|d, v|n n|gner |eve|s ol agreenen |n As|a and
Latin America, as well as the UK and Ireland. This high
response rate illustrates the belief amongst parents that
wealth is a double-edged sword that brings problems
as ve|| as benefs. \nen | cones o gender, vonen
(44%) vere nore |||e|y nan nen (39%) o lee| na
vea|n p|aced a neavy burden on ne nex genera|on,
and vonen vere a|so nore |||e|y o lee| na vea|n
|ed o lan||y conf|c.
India 50%
Chart 6 Burdens of Inheritance
Total 29%
Switzerland 15%
Hong Kong 38%
US 21%
Ireland 35%
UK 35%
Monaco 14%
UAE 18%
Qatar 20%
Singapore 36%
Spain 14%
Japan 32%
Saudi Arabia 22%
Australia 20%
South Africa 24%
* % who slightly agree or completely agree with the statement Inheritance places an unnecessary burden on the next generation
Source: Ledbury Research
% Agree*
0 20 60 40 80 100
17 16
Tne researcn nas revea|ed na success|on and vea|n
can be lraugn v|n poen|a| conf|cs and burdens.
ln add||on, a|udes ovard ne subjec vary by age,
gender, reg|on and bac|ground. Desp|e a|| n|s, ne
vor|ds n|gn ne vorn |nd|v|dua|s s||| rena|n conn|ed
o pass|ng on ne|r asses o ne nex genera|on. C|oba||y,
jus 4% ol |nd|v|dua|s sa|d ney d|d no be||eve na any
asses snou|d be passed on o ne nex genera|on. ln ne
nex cnaper, ve v||| |oo| a nov |nporan success|on
planning is deemed to be in this transfer process.
Still, the inheritance cycle continues
Is an inherited dollar any different than an earned
do||ar Sure, ney |oo| ne sane, bu are ney rea||y
v|eved as be|ng |den|ca| by ne peop|e no|d|ng nen
Academics Professor Orit Tykocinski from the
lnerd|sc|p||nary Cener (lDC) Herz||ya and Frolessor
Tnane F|nan lron Co|by Co||ege |oo|ed |no n|s
ques|on, and lound na ne |nner|ed do||ar vas
defn|e|y seen as be|ng d|lleren, as be|ng "noney
v|n persona||y, and n|s nad prolound |np||ca|ons
on spend|ng and |nves|ng benav|our.
"Feop|e end o preserve |nner|ance noney. Tney don
van o vase |. ls |||e neyre ry|ng o pro|ong ne
presence, although symbolically, of the person who
gave | o nen by no us|ng |, exp|a|ns Frolessor
Or| Ty|oc|ns||, a pane|||s lor n|s repor. Tn|s neans
na ney are re|ucan o spend |, or |nves | |n r|s|y
fnanc|a| |nsrunens, and even van o |so|ae | lron
their other wealth.
lnr|gu|ng|y, n|s preserva|on |ns|nc |s noderaed
by the personality and lifestyle of the deceased, and
ne naure ol ne|r re|a|onsn|p. "Tne |dea |s na n|s
money becomes highly associated with the person
vno gave | o you, and v|n ne|r va|ue sysen.
\e fnd na peop|e are ry|ng o spend ne noney
|n a vay vn|cn |s cons|sen v|n ne va|ue sysen
ol ne depared, noes Frolessor Or| Ty|oc|ns||.
Tne prolessors researcn |nvo|ved exper|nens v|n
un|vers|y suden par|c|pans, vn|cn esed ne|r
a|udes |n a nunber ol scenar|os. "\e as|ed nen
to imagine that theyd inherited money from an aunt
vno caused uno|d d|lfcu||es |n ne lan||y. (ln n|s
case), ney a|e ne noney and ney go pary|ng
v|n |! ls |||e ban|sn|ng ne person. ll |s a be|oved
person, ney ac |n a nucn nore resra|ned vay,
says Frolessor Or| Ty|oc|ns||.
The researchers speculate that these effects probably
nave an "exp|ry dae and na |n |ne, |nner|ed noney
becones nore |||e "regu|ar noney, bu ney nave ye
to properly research this.
Ol course, sucn eno|ona||y-dr|ven responses run
couner o good |nvesnen nanagenen. Emily
Haisley connens. "Tn|s underscores ne |nporance
ol us|ng a srucured lranevor| o assess |nd|v|dua|s
r|s| prof|es o n|n|n|se subconsc|ous |nfuences na
cou|d undu|y |nfuence nov an |nner|ance |s |nvesed,
such as how close they were to the person who left
nen an |nner|ance. S|nce nese ellecs d|n|n|sn over
|ne, | |s |nporan o na|e fnanc|a| dec|s|ons aler
ne nourn|ng per|od nas ended and o rev|s| nese
dec|s|ons over |ne.
Fron a parena| po|n ol v|ev, ne fnd|ngs a|so
re|nlorce ne |nporance ol |ns||||ng va|ues and
building good relationships between generations
|n order o pos||ve|y |nfuence cn||drens benav|our.
"ll you nave a |ov|ng re|a|onsn|p and a snared va|ue
sysen na |nc|udes respons|b|e fnanc|a| a|udes,
| can na|e a rea| d|llerence, conc|udes Frolessor
Or| Ty|oc|ns||.
Money with personality
India 1%
Chart 7 Passing Assets on to the Next Generation
Total 4%
Switzerland 4%
Hong Kong 5%
US 3%
Ireland 2%
UK 6%
Monaco 2%
UAE 2%
Qatar 2%
Singapore 5%
Spain 5%
Japan 11%
Saudi Arabia 6%
Australia 2%
South Africa 0%
* % selecting the statement I dont believe any assets should be passed on to the next generation as the best match for how they feel about inheritance planning
Source: Ledbury Research
% Agree*
0 4 2 8 6 10 12
!9 18
No on|y are ne vas najor|y ol vea|ny |nd|v|dua|s
p|ann|ng o pass vea|n on o ne nex genera|on, sone
even asp|re o |eave a fnanc|a| |egacy na |ass lar beyond
ne|r den|se. Tne grandness ol nese |egac|es v||| vary
dramatically, but it is interesting that more than 60% of
ne vor|ds vea|ny are |oo||ng o |eave a |egacy and na
this idea has resonance right across the world.
Ma||ng a success
of succession
21 20
For nose vno are |oo||ng o ransler vea|n, or vno
nave grander asp|ra|ons o |eave |egac|es, nere |s ne
need for thorough planning. This fact is now generally
appreciated amongst the worlds wealthy, with more
than half agreeing that succession planning is important.
Tne perce|ved |nporance ol success|on p|ann|ng
|ncreases v|n ne vorn ne nore vea|n |nd|v|dua|s
nave, ne nore n|nded ney are o respons|b|y ransler |.
A similar pattern is seen amongst those with higher
|ncones. Tnese vo segnens are genera||y very good
p|anners. ney van o |eave a |egacy, ney be||eve |n ne
need lor proless|ona| adv|ce and nave oner proec|ons
|n p|ace (e.g. prenup|a| agreenens, see cnaper nree).
Tn|n||ng abou oner d|llerences, ve see na success|on
p|ann|ng |s nore |nporan o nen (C0%) nan | |s o
vonen (49%). Tn|s |s probab|y exp|a|ned by prev|ous
Earc|ays \ea|n researcn snov|ng na vonen a|e |ess
ol a ro|e |n fnanc|a| dec|s|on na||ng nan nen, and
therefore are at more of a distance to planning matters
(see a|so ne ca|| ou box a ne end ol n|s cnaper).
Religion also appears to play a role here. Those who
|den|fed nense|ves as secu|ar |n ne survey do no lee|
|nner|ance p|ann|ng |s |nporan on|y 43% n|n| | |s,
conpared o S7% ol ne g|oba| n|gn ne vorn connun|y
nor do ney care as nucn o |eave a fnanc|a| |egacy.
Tnose vno |den|fed nense|ves as re||g|ous are nore
|||e|y o p|ace nore |nporance on success|on, v|n nose
vno |den|ly nense|ves as H|ndu as be|ng ne nos
concerned v|n success|on p|ann|ng. H|ndu|sn exper,
Shaunaka Das, says na ne "des|re o |eep noney
and businesses within the family grouping is particularly
srong |n lnd|a, refec|ng ne lan||y consc|ousness |n
India and the ancient system of delegating duties and
proless|on o peop|e (la| sysen).
Chart 8 Leaving a Financial Legacy
* Mexico and Brazil
** South Africa
*** US
'''' % who slighLly agree or conpleLely agree wiLh Lhe sLaLenenL lL is inporLanL for ne Lo leave a fnancial legacy when l die
Source: Ledbury Research
Total
61%
% Agree****
0 20 60 40 80 100
North
America***
54%
Europe 67%
Latin
America*
85%
Middle East 58%
Africa** 74%
Asia 55%
Chart 9 Importance of Succession Planning
* Mexico and Brazil
** South Africa
*** US
'''' % who slighLly agree or conpleLely agree wiLh Lhe sLaLenenL A key fnancial prioriLy for ne is succession planning
Source: Ledbury Research
Total
57%
% Agree****
0 20 60 40 80 100
North
America***
51%
Europe 57%
Latin
America*
73%
Middle East 75%
Africa** 72%
Asia 55%
23 22
Loo||ng a ne d|lleren age groups nere are sone rea|
contrasts. The importance of succession planning does
not increase on a straight-line basis with age, as some
n|gn expec. lnsead nere |s a U-snaped re|a|onsn|p
between age and the importance of succession
planning. As chart 10 shows, it is most important in
the younger and the older respondents. We analysed
vny n|s n|gn be, and |den|fed ||le evens as be|ng
|nporan |nfuences.
For nose under S4, n|ngs na nave a|ready nappened
end o nave nore ol an |nfuence nan n|ngs na are
abou o nappen. For nen, r|ggers over ne pas !2
months include marriage, the purchase of property
and |nner|ance. For nose over S4, ve see ne reverse.
things that will happen in the future are more important
r|ggers, |||e ne an|c|pa|on ol |nner|ance or ne sa|e
ol a bus|ness. Aler re|renen, n|gn ne vorn |nd|v|dua|s
are generally less concerned as they enjoy a stage in life
where they are able to place more emphasis on their
own needs.
One ||le even na |s cons|sen|y assoc|aed v|n
succession planning for all ages of the wealthy
population is the purchase of property. Catherine Grum
|den|fes a |ey reason ben|nd n|s. "\|n fnanc|a| asses,
nere are no eno|ona| |es and ney are eas||y d|v|ded |l
requ|red, asses |||e lan||y nones and no||day nones are
eno|ona| as ve|| as fnanc|a| asses, and are nucn nore
d|lfcu| o d|v|de. Gareth Morrell, Research Director
|n ne Soc|ey and Cnange Tean a ne Na|ona| Cenre
lor Soc|a| Researcn, agrees. "l |s conp||caed o snare
(propery) v|nou poen|a||y as||ng soneone vnose
nusband or v|le nas jus d|ed o nove ou ol ne nouse.
\n||s nese d|lleren r|ggers serve o ra|se ne
importance of succession planning in the minds of
vea|ny |nd|v|dua|s, nere |s no guaranee na ney
v||| acua||y conver good |nen|ons |no ac|ons.
Earc|ays \ea|n exp|ored ne r|s|s and ru|es ol sucn
procras|na|on |n fnanc|a| dec|s|on na||ng |n ne
prev|ous vo|une ol Insights (Risk and Rules: The Role
of Control in Financial Decision Making), and |den|fed
a popu|ar ecnn|que lor avo|d|ng procras|na|on as
"se|ng dead||nes. ln ne conex ol success|on, n|s
n|gn |nvo|ve se|ng a par|cu|ar dae vnen you |nend
o s| dovn v|n an exper adv|sor.
Catherine Grum endorses n|s approacn. "\nen peop|e
are p|ann|ng lor ax naers or ne sa|e ol a bus|ness,
ney nave c|ear dead||nes and quan|fab|e benefs.
With succession planning, these catalysts are often
n|ss|ng or narder o defne. To nanage n|s process
nany peop|e vou|d benef lron se|ng arges and
dead||nes. Mee|ng v|n a proless|ona| adv|sor |s a frs
step toward this goal; the succession-planning
equ|va|en ol a persona| ra|ner.
ln ne n|rd cnaper ve nove beyond |ssues ol p|ann|ng
o |oo| a nov n|gn ne vorn |nd|v|dua|s are curren|y
go|ng abou ranslerr|ng vea|n o ne nex genera|on,
exp|or|ng |ey g|oba| d|llerences and ne ner|s ol op|ons
|||e russ.
Different ages, different priorities
Across a|| ne areas ol fnanc|a| dec|s|on na||ng,
succession planning is perhaps the one where you
vou|d reasonab|y expec vonen o nave ne greaes
|nvo|venen and |npu g|ven |s lundanena|
importance to family dynamics and the future welfare
of the children.
Our researcn |den|fed na vonen are nore avare
nan nen ol ne conf|c na vea|n br|ngs, and are
nore |||e|y o lee| na vea|n p|aces a burden on ne
nex genera|on.
Ye lena|e |nvo|venen |s s||| |ac||ng |n n|s area.
From our research, it appears that women place
less importance on succession planning than men
(49% ol vonen be||eve | o be |nporan conpared
v|n C0% ol nen), and vonen are |ess |||e|y o a|e
ac|on. Ous|de ol ne US, vonen na|e |ess use ol
v|||s and are |ess |||e|y o rev|se | |l ney nave one.
Loo||ng a cnanges |n a|udes and benav|our
across d|lleren ages, ve fnd na ne gender d|v|de |s
lessening in younger generations. Younger women are
becoming much more engaged in succession planning.
Success|on p|ann|ng s||| |ac|s lena|e |nvo|venen
Chart 10 Importance of Succession Planning for Different Ages
' Average of agreenenL wiLh Lwo sLaLenenLs: A key fnancial prioriLy for ne is succession planning and lL is inporLanL for ne Lo leave a fnancial legacy when l die
Source: Ledbury Research
%
A
g
r
e
e
*
Age
Under 35 35-44 45-54 55-65 Over 65
70%
50%
52%
54%
56%
58%
60%
62%
64%
66%
68%
Chart 11 Use of Wills*
Asia
Europe
57%
34%
88%
81%
Male
Female
North
America**
94%
93%
Middle
East
50%
77%
* Africa and Latin America have been excluded due to low samples.
** US
Source: Ledbury Research
% of respondents who currently have a will
0 20 60 40 80 100
2S
ln ne preced|ng cnapers ve nave |oo|ed a ne
importance that the wealthy place on passing on assets
o ne nex genera|on, and ve nave a|so exp|ored sone
ol ne conf|cs and concerns assoc|aed v|n n|s.
Anoner prac|ca| cons|dera|on belore exp|or|ng nov
wealthy people can best accomplish the transfer of assets
|s ne |eve| ol rus na vea|ny parens nave |n ne|r
children and stepchildren when it comes to money
nanagenen. Do ney lee| na ne nex genera|on v|||
be v|se cusod|ans ol ne|r vea|n Our survey l|nds na
across the world, 34% of respondents are either
anb|va|en or do no rus ne|r cn||dren and sepcn||dren
to protect their inheritance. Read in isolation this number
|oo|s vorry|ng, bu | |s by no neans so|e|y a rel|ec|on
ol ne perce|ved la|||ngs |n ne nex genera|on. ln sone
cases, cn||dren nave ye o reacn ne age vnere ney
can earn their parents trust, and some parents will
a|vays lre abou ne enpa|ons ol nodern ||v|ng.
The dos and donts,
wills and wonts
27 26
These concerns relating to recipients are part of a much
|arger n|nefe|d ol |ega|, fnanc|a| and persona| |ssues
na ne vea|ny need o nav|gae vnen |oo||ng o
transfer their wealth. Amongst other things, a failure
o conduc proper p|ann|ng can resu| |n nav|ng asses
lrozen a ne |ne ol dean, d|spues over ovnersn|p,
fragmentation of assets and needless erosion of wealth.
C|ven n|s conex, nany ol ne vea|ny nave grasped
ne |nporance ol exper adv|ce. lndeed, sone C3% ol
respondents agreed that deciding on an inheritance plan
lor ne|r cn||dren and sepcn||dren requ|red a "grea dea|
ol proless|ona| adv|ce. Tn|s |s par|cu|ar|y ev|den anongs
vea|ny vonen, vno are nore |||e|y o see| genera|
fnanc|a| adv|ce (Ledbury Researcn, Eencnnar| 20!0).
Eu nere are s||| nose vno la|| o see| ou proless|ona|
adv|ce. Catherine Grum connens. "l |s an exrene|y
conp|ex as| ry|ng o p|an lor cn||drens luures and
nav|gae ne nyr|ad |nner|ance op|ons. Ye nere are
nose vno spend an nour on ne lnerne and n|n|
ney nave |earn a|| ney need o |nov. An exper can
tell you more in one hour than you could learn on the
lnerne |n a year.
See||ng ou proless|ona| ne|p
A a lan||y |eve|, ve see na |nd|v|dua|s |n ne|r l|rs
marriage tend to trust their children more, and
generally those with stepchildren trust less: 47% of
those with stepchildren do not trust their heirs to
protect their inheritance, compared with the global
average ol 34%.
Chart 12 Level of Trust in Children and Stepchildren (by region)
* US
** Mexico and Brazil
*** South Africa
**** I trust my children/stepchildren to protect their inheritance
Source: Ledbury Research
Total
34%
%who do not agree with the statement****
0 20 60 40 80 100
North
America*
38%
Europe 37%
Latin
America**
25%
Middle East 22%
Africa*** 23%
Asia 31%
Chart 13 Need for Professional Advice
* South Africa
** US
*** Mexico and Brazil
**** %who slightly agree or completely agree with the statement Deciding on an inheritance plan for my children/stepchildren requires a great deal of professional advice
Source: Ledbury Research
Total
63%
% Agree****
0 20 60 40 80 100
North
America**
68%
Europe 65%
Latin
America***
49%
Middle East 55%
Africa* 85%
Asia 61%
29 28
There are a number of different ways of going about
ranslerr|ng vea|n o ne nex genera|on. Tne bes
|novn and connon|y used op|on |s a v|||. Tnese |ega|
dec|ara|ons are exens|ve|y enp|oyed by ne vea|ny,
our researcn esab||snes na nore nan nree-quarers
ol n|gn ne vorn |nd|v|dua|s around ne vor|d nave v|||s.
ln ne US, a|nos everyone nas a v||| (94%) and n|s
|s on|y s||gn|y |ess connonp|ace |n Europe (87%),
vn||s |n As|a and ne M|dd|e Eas n|s sands a around
S0% on average. Tne upa|e ol v|||s v|n|n counr|es |s
|nfuenced by vnener or no "ne|rsn|p |avs ex|s, vn|cn
spell out how part or all of a deceaseds estate must be
d|v|ded. Sucn |avs are connon |n c|v|| |av jur|sd|c|ons,
such as in France, Spain, Italy and Latin America.
ln lapan, |nd|v|dua|s do no yp|ca||y vr|e v|||s, |nsead
ney express ne|r v|snes |n genera| and po||e erns,
and the family reaches consensus on how assets will
be d|sr|bued. E|rn order |s a |ey deern|nan nere,
and sometimes all the property may go to the eldest
son. Tn|s approacn |s |n |eep|ng v|n ne cu|ure |n
Japan. Shimon Takagi, Farner a \n|e & Case |n
To|yo exp|a|ns na nere |s a connon v|ev across
Eas As|a na, "propery |s no your propery, you are
on|y borrov|ng |. \e don nave a srong des|re o
conro| sonen|ng aler ve d|e.
\|||s do, novever, nave a nunber ol d|sadvanages.
They capture thoughts at only one moment in time and
in most countries they are public documents, meaning
na dea||s ol ne asses and ne benefc|ar|es are
accessible to anyone.
Wills are the classic option for the wealthy
Trusts are an increasingly popular option for the wealthy.
Tnese |ega| agreenens are |||e "nree-d|nens|ona| v|||s,
|n na ney a||ov cnanges |n par|es (peop|e can be
added or renoved) and asses over an |ndefn|e per|od
ol |ne. Truss a|so nave ne added benefs ol ne|p|ng o
preven asse brea|ups and avo|d|ng probae procedures.
l |s n|s fex|b|||y na na|es nen par|cu|ar|y arac|ve
lor nose |nd|v|dua|s vno nay v|sn o |nfuence nov
heirs manage wealth. The trustees can be empowered to
||n| and vary ne anoun na |s d|spersed o cn||dren,
and ne|p v|n any prob|ens na ar|se v|n benefc|ar|es.
H|sor|ca||y, russ nave been par|cu|ar|y popu|ar |n ne
UK because ol ne|r ab|||y o preven ne brea|up ol
asses |||e |arge propery esaes. ln ne US, ney nave
also become a standard part of estate planning. In other
areas, sucn as ne M|dd|e Eas, nere |s a grov|ng use ol
trusts, particularly for assets outside the country.
ln As|a, ne concep ol russ |s s||| a re|a|ve|y nev one
lor nos n|gn ne vorn |nd|v|dua|s. lnsead, |nsurance
can often form an important role in estate planning
v|n sone ype ol s|ng|e-pren|un po||cy (un|versa| ||le)
used o prov|de a s|gn|fcan |unp sun ol noney upon
dean. Tn|s g|ves ne ne|rs nucn-needed ||qu|d|y |l ne
deceased was asset-rich but cash-poor. One particular
exanp|e ol n|s p|an |n ac|on can be seen v|n sna||
bus|nesses. Eacn parner can a|e ou |nsurance on
the others life; if one were to die, then the other could
use ne |nsurance o purcnase ne ba|ance ol ne equ|y
lron ne ne|rs, nereby prov|d|ng lor ne needs ol
the deceaseds family and increasing their own
business holdings.
Truss are ne fex|b|e v|||s
India 78%
Chart 14 Use of Wills
Total 77%
Switzerland 70%
Hong Kong 46%
US 94%
Ireland 89%
UK 93%
Monaco 71%
UAE 62%
Qatar 22%
Singapore 68%
Spain 66%
Japan 13%
Saudi Arabia 84%
Australia 98%
South Africa 96%
Source: Ledbury Research
% of respondents who currently have a will
0 20 60 40 80 100
31 30
Our researcn prov|des renar|ab|e v|s|b|||y |no ne
exen ol v||| rev|s|ons anongs ne vea|ny. Sone C9%
ol vea|ny |nd|v|dua|s nave rev|sed ne|r v|||s a |eas
once and 2C% nave rev|sed nen nree or nore |nes.
Tnese v||| rev|s|ons are predon|nan|y dr|ven by
fnanc|a| reasons and ||le-sage evens. Tne op lour
reasons lor rev|s|ng v|||s |n order ol |nporance are. an
|ncrease |n vea|n, ax elfc|ency/ax p|ann|ng,
marriage/new partners and birth of a child.
The importance of these different factors changes
v|n age. ax elfc|ency |s ne nos |nporan lor o|der
respondents whilst the purchase of property and
cn||db|rn are |ey r|ggers lor younger ones.
ln erns ol ry|ng o avo|d conf|c, Gareth Morrell,
Research Director in the Society and Change Team at
ne Na|ona| Cenre lor Soc|a| Researcn, sresses ne
importance of letting those who are affected by will
cnanges |nov |n advance ol any rev|s|ons. "l n|n| ne
sor|es ve neard (dur|ng researcn conduced |n ne UK)
vnere nere vas par|cu|ar conf|c vas vnere ne d|v|s|on
ol an esae cane as a surpr|se and l n|n| na |nov|edge
ol v||| rev|s|ons vou|d defn|e|y a||ev|ae conf|c.
\||| rev|s|ons are no un|versa|, lor exanp|e, |n nany
As|an counr|es nere |s an avers|on o conenp|a|ng
mortality, part of the reason for the low rate of will
cnanges |n p|aces |||e S|ngapore, Hong Kong and lapan.
\nen | cones o d|s|nner|ance, ve fnd na as nany
as !0% ol ne vea|ny nave d|s|nner|ed soneone or cu
a lan||y nenber ou ol ne|r v|||s. Tne r|s| ol n|s
happening is fairly similar across the world, with people
|n lnd|a and Ta|van s||gn|y nore |||e|y o be d|s|nner|ed.
Oner |neres|ng fnd|ngs nere are na naura| cn||dren
(raner nan sepcn||dren) are |ess |||e|y o be d|s|nner|ed
and na lan|||es vno are v||||ng o d|v|de ne|r |nner|ance
equa||y are |ess |||e|y o d|s|nner|.
\||| rev|s|ons. v||| ney or von ney
Chart 16 Reasons 8ehind Revision of Wills
* US
** Mexico and Brazil
*** South Africa
Source: Ledbury Research
Main reason that prompted
revision(s) of will (those mentioned
by 4% of respondents)
Total Europe
North
America*
Latin
America**
Middle
East
Africa*** Asia
Increase in wealth !9% 18% 18% 28% 17% 18% 27%
Tax elfc|ency/ax p|ann|ng !9% 18% 23% 11% 7% 22% 9%
Marriage/new partner 12% 14% 11% 28% 20% 4% 6%
Birth of a child 9% 9% 9% 6% 10% 13% 8%
Child reached a certain age/left home 4% 4% S% 0% 3% 2% 6%
Dean ol a rec|p|en ol prev|ous v||| S% 4% S% 0% 10% 13% 6%
Chart 15 Revision of Wills
Total 31% 43% 26%
Monaco 58% 31% 11%
Spain 55% 32% 13%
Saudi Arabia 73% 15% 12%
Japan 46% 46% 8%
US 15% 50% 35%
Ireland 42% 48% 10%
Switzerland 46% 34% 20%
UK 19% 50% 31%
UAE 40% 50% 10%
South Africa 8% 45% 47%
Australia 14% 49% 37%
Hong Kong 48% 43% 9%
India 89% 7% 4%
4% Singapore 80% 16%
* Based on those who currently have a will in place and can recall the revisions
Source: Ledbury Research
Nunber of Lines individuals have revised Lheir will since iL was frsL wriLLen'
0 20 60 40 80 100
Never
12 times
3 or more times
33 32
Hav|ng exp|ored ne nany laces ol success|on, |n ne
fna| cnaper ve peer a |||e lurner |no ne nor|zon o
d|scuss ne expeca|ons na ne vea|ny nave, no
only for their children but for the world in general.
Cruc|a||y lor ne benefc|ar|es ol ne nex genera|on,
ve |oo|ed a vea|ny |nd|v|dua|s v|evs on nov asses
snou|d be d|v|ded anongs cn||dren. Overa||, nere |s a
srong endency ovard d|v|d|ng asses equa||y, and n|s
|s ev|den |n ne US, As|a and par|cu|ar|y across Europe.
Sp|||ng vea|n equa||y |s assoc|aed v|n greaer
fnanc|a| sa|slac|on and reduced lan||y conf|c.
Our research shows that 20% of high net worth
|nd|v|dua|s vno van o |eave a fnanc|a| |egacy n|n|
asses snou|d be d|v|ded unequa||y anongs cn||dren.
To our surpr|se, ous|de As|a, ney do no n|n| na a
v||||ngness o a|e over ne bus|ness |s an |nporan
bas|s o d|v|de vea|n. ln nos ol ne res ol ne vor|d,
and noab|y ne M|dd|e Eas and Europe, ne nos
|nporan cons|dera|on lor nose vno van o |eave
a business legacy is gender.
And ne benefc|ar|es are.
\ea|ny |nd|v|dua|s genera||y n|n| na prenup|a|s are
important for the protection they afford, yet the number
ol |nd|v|dua|s vno use nen |s re|a|ve|y nodes.
lus !S% nave ever nad sucn an agreenen |n p|ace,
a|nougn na nunber |ncreases v|n vea|n |eve|s.
Fron an |nerna|ona| perspec|ve, a lundanena|
factor in the use of prenuptials is their legal recognition.
ln sone nar|es, sucn as ne UK and Hong Kong, ney
are no lorna||y b|nd|ng. Hovever, |n nany counr|es,
ney are bon recogn|sed and enlorceab|e. For exanp|e,
a nunber ol European counr|es nave s|gned up o ne
Hague Conven|on on ne Lav App||cab|e o
Mar|non|a| Fropery Reg|nes.
Tnere are a|so nany nunan lacors na |nfuence
whether or not spouses agree to prenuptials. Research
in the US by Heather Mahar, a Fellow at the John M.
O||n Cener lor Lav, Econon|cs and Eus|ness a
Harvard Lav Scnoo|, lound na ne vo na|n reasons
peop|e don use prenup|a|s are o avo|d send|ng
nega|ve s|gna|s o ne|r spouses and over-confdence.
on|y !2% ol peop|e be||eve ne|r narr|age v||| la||, vn||s
d|vorce raes are c|ose o S0% (Harvard Lav Scnoo|).
A conb|na|on ol nese lacors serves o deern|ne
ne |eve| ol usage across ne reg|ons.
Frenup|a|s. ne gap beveen a|udes and benav|ours
Chart 18 Views on Prenuptial Agreements
% who have ever used
a prenuptial agreement
Total Europe
North
America*
Latin
America**
Middle
East
Africa*** Asia
No a a|| |nporan 24% 21% !S% 6% 34% 9% 36%
Somewhat important 37% 40% 49% 23% 18% 9% 33%
Very important 29% 30% 27% 71% 20% 81% 20%
Don' |nov 10% 9% 10% 0% 26% 0% 11%
* US
** Mexico and Brazil
*** South Africa
Source: Ledbury Research
Chart 19 Use of Prenuptial Agreements
* South Africa
** Mexico and Brazil
*** US
Source: Ledbury Research
Total
15%
% who have ever used a prenuptial agreement
0 20 60 40 80 100
North
America***
11%
Europe 15%
Latin
America**
27%
Middle East 15%
Africa* 62%
Asia 13%
I dont believe any assets should be
passed on to the next generation
4%
Dont know 6%
Chart 17 Division of Assets Amongst Children
* % of respondents selecting each statement as best matching how they feel about inheritance planning when it comes to passing on assets to children
Source: Ledbury Research
% Saying each statement*
0 20 60 40 80 100
Assets should be allocated
differently by child
Assets should be equally divided
amongst all children
20%
70%
3S 34
"ll you p|an anead v|n a srucur|ng, and you are sens|b|e |n ne
prov|s|ons |n ne even ol a d|vorce, nen ve n|n| na ve are ab|e
to protect people, so that the terms of the agreement are much
nore |||e|y o be enlorced a ne end ol ne day by a cour.
Marcus Dearle, Managing Partner of the international law firm Withers LLPs Hong Kong office
In the last decade, marriage has become a much
nore ser|ous propos||on lor vea|ny |nd|v|dua|s |n
bon Eng|and and Hong Kong, v|n respec o ne|r
fnances. Sen|na| |ega| cases |n bon |oca|ons nave
nade | poss|b|e lor fnanc|a||y vea|er spouses o
reacn nucn lurner |no ne|r parners poc|es and
a|e nucn nore avay.
"Fr|or o ne year 2000 |n Eng|and and 2009 |n Hong
Kong, ne fnanc|a||y vea|er pary |n a case v|n
substantial assets would normally only be awarded
n|s or ner reasonab|e requ|renens. Tn|s vou|d
usually amount to a property and reasonable needs
cap|a||sed vn|cn vou|d qu|e olen be a sna||
lrac|on ol ne oa| vea|n, exp|a|ns Marcus
Dearle, Manag|ng Farner ol ne |nerna|ona| |av
frn \|ners LLFs Hong Kong olfce. "Tne ve||-
|novn cases ol \n|e vs. \n|e (Eng|and) and DD
vs. LK\ (Hong Kong) cnanged ne |av, br|ng|ng |n
equa||y ol d|v|s|on and nrov|ng ou ne concep ol
reasonab|e requ|renens as | d|scr|n|naed aga|ns
ne nonena|er, ne |nroduc|on ol S0/S0 asse
sp||s |n b|g noney d|vorce cases nas |nev|ab|y
|ncreased ens|ons |n lan|||es.
No on|y do nese cnanges |ncrease ne anoun na
spouses can potentially be awarded, but it means that
nov rus asses are be|ng aac|ed by ne fnanc|a||y
vea|er spouse o be |nc|uded as par ol ne
nar|non|a| po lor d|v|s|on. Under ne o|d |av nose
trust assets were often not touched because the
|over |eve| ol cap|a| avards nean na nere vou|d
olen be sulfc|en asses ous|de ne rus o se|e
ne oner spouses c|a|ns. "ls poss|b|e |n Eng|and and
Hong Kong lor ne cour e|ner o a|e na noney (|n
rus) |no accoun as a resource na can be dravn
dovn upon, or, | nas ne pover o vary ne erns
ol ne rus |n cera|n c|rcunsances and ellec|ve|y
na|e fnanc|a| prov|s|on lor a spouse vno vas no a
benefc|ary ol ne or|g|na| rus a a||. Tn|s, |n urn, nas
resu|ed |n rusees be|ng |nvo|ved |n d|vorce |||ga|on
and pronped lan|||es o n|n| carelu||y belore |eav|ng
oo nucn vea|n o |nd|v|dua|s |n d|lfcu| narr|ages.
These changes underline the importance of
prenup|a|s and are pronp|ng greaer a|e-up
anongs |nd|v|dua|s, a|nougn as a|ready noed,
prenup|a|s are no b|nd|ng |n ne UK and Hong Kong,
so lurner seps are necessary. To prov|de beer
proec|on, Marcus Dear|e adv|ses |nd|v|dua|s o
consider legitimate restructuring of their assets in
sucn a vay na na|es | nore |||e|y na a cour nay
well ring-fence certain assets outside the matrimonial
po lor d|v|s|on. Spec|fca||y, ne encourages na||ng
reasonab|e prov|s|on lor ne fnanc|a||y vea|er pary
within a prenuptial agreement, which means the
agreement has a much better chance of being
enlorced |n ne even ol a d|spue.
"ll you p|an anead v|n a srucur|ng, and you are
sens|b|e |n ne prov|s|on you na|e |n ne even ol
a d|vorce v|n ne use ol a pre or pos nup|a|
agreenen, nen ve n|n| na ve are ab|e o proec
people, so that the terms of the agreement are more
|||e|y o be enlorced a ne end ol ne day by a cour,
he adds.
Froec|ng ne lan||y jeve|s exper|ences |n Eng|and and Hong Kong
37
Wealth is, of course, just one of the useful things that
parens can pass on o ne|r cn||dren. \na can prove o be
equa||y va|uab|e |n ne |onger ern |s sone uselu| parena|
|ns|gn |no vna ne luure no|ds and adv|ce on vna o
do to be successful. Understanding the challenges that
future generations face and how children can rise to them
snou|d ne|p nen acn|eve vna ney van o |n ||le.
Words of wisdom
for the nex
generation
For n|s l|na| cnaper, ve researcned ne v|evs ol
wealthy respondents around the world to tap their
co||ec|ve v|sdon on vna ne nex genera|on snou|d
be expec|ng and do|ng. Tne resu|s revea| sone
|nr|gu|ng reg|ona| d|llerences and prov|de a conpe|||ng
picture of what the future holds for all of us.
39 38
Eelore as||ng ne respondens vna ney expeced ol
ne luure genera||y, ve as|ed nen vna ney expeced
ol ne|r cn||dren |n ne luure. Spec|fca||y, ve as|ed
whether they wanted their children and stepchildren
o be nore fnanc|a||y successlu| nan ney nave been.
For nos (7!%) ne ansver vas yes. Tnere vere,
novever, a naer|a| nunber ol peop|e vno do no v|sn
sucn fnanc|a| success on ne nex genera|on. On ne
lace ol | n|s nay seen srange, bu nay be exp|a|ned
by proec|ve parena| |ns|ncs or a des|re lor nen o
succeed |n non-fnanc|a| areas.
Furner ana|ys|s revea|s na |nd|v|dua|s vno v|sn ne|r
cn||dren greaer fnanc|a| success a|so nave oner
lavourab|e a|udes ovard nen, spec|fca||y ney care
about their childrens education and they trust them
more. We also found that those who wished for their
children to follow in their footsteps when choosing a
career, v|sned nen lurner fnanc|a| success.
Questioned about the top three challenges facing the
nex genera|on, ne nunber one se|ec|on lor SC% ol
ne vea|ny vas "econon|c urbu|ence/|nfa|on/r|s|ng
axa|on. Tn|s |s cons|sen|y |nporan across a|| ol ne
surveyed reg|ons, and |s a refec|on ol ne sca|e ol ne
economic problems we face. This top challenge is also
||n|ed o ne second nos c|ed concern vn|cn |s
"enp|oynen opporun||es.
lnd|v|dua|s vere a|so as|ed vnener ney vaned ne|r
children/stepchildren to follow in their footsteps when
cnoos|ng a career, be n|s a||ng over ne lan||y bus|ness
or following a similar path. A fairly modest 28% globally
sa|d na ney vou|d |||e n|s, v|n a c|ear sp|| |n v|evs
beveen deve|oped and energ|ng counr|es. Tnose vno
v|sned o lo||ov |n ne|r ovn parens looseps (see
cnaper one) van ne|r cn||dren, |n urn, o lo||ov |n
theirs. This is the case for all sources of wealth, genders
and regions.
Tne n|rd b|gges g|oba| cna||enge "car|ng lor an
age|ng popu|a|on |s by no neans a connon pr|or|y
|n a|| reg|ons and serves o expose nose pars ol ne
vor|d v|n aged popu|a|ons. ln Europe, n|s |s ne
s|ng|e nos |nporan cna||enge, refec|ng ne lac na
ne ned|an age ol ne popu|a|on |s nov 40 (Un|ed
Na|ons), and na ne propor|on ol ne popu|a|on aged
CS or o|der |s expeced o ba||oon o 23% by 2030 (!C%
curren|y, Eurosa). Ye | |s seen as be|ng a nucn |over
priority in Latin America, where the median age is just
under 30 (Un|ed Na|ons).
Tne nex nos |nporan cna||enge, "c||nae cnange/
env|ronnena| |ssues, provo|es s|n||ar d|llerences ol
op|n|on around ne vor|d. On ne one exrene nere
|s La|n Aner|ca, vnere | garners SS% ol ne voe and
is seen as the single most important challenge, and on
the other there is the US, where this is only a concern
lor 24% ol nose surveyed. lndeed, ne resu|s snov
that more Americans are concerned about the decrease
|n ne|r counrys |nfuence/pover on ne g|oba| sage
nan ney are abou ne env|ronnen.
Me, on|y beer parens expeca|ons lor ne nex genera|on Tne b|g |ssues. fnances, enp|oynen and age|ng
Chart 20 Expectations of Children****
* US
** Mexico and Brazil
*** South Africa
**** % who slightly agree or completely agree with each of the following statements
Source: Ledbury Research
Total Europe
North
America*
Latin
America**
Middle
East
Africa*** Asia
l vou|d |||e lor ny cn||dren/sepcn||dren
o exper|ence greaer fnanc|a| success
nan l nave.
71% S8% 71% 84% 94% 67% 82%
l vou|d |||e ny cn||dren/sepcn||dren o
follow in my footsteps when choosing
a career.
28% !9% !S% 40% 70% !9% 42%
Chart 21 Challenges for the Future****
* US
** Mexico and Brazil
*** South Africa
**** % selecting each challenge (respondents could select up to three)
Source: Ledbury ResearcSource: Ledbury Research
Total Europe
North
America*
Latin
America**
Middle
East
Africa*** Asia
Econon|c urbu|ence/|nfa|on/
r|s|ng axa|on
SC% S2% S7% S2% 70% S!% S8%
Enp|oynen opporun||es S2% S!% S!% 4S% 63% 7S% S!%
Caring for ageing populations S!% 68% 48% 21% 11% 21% 4S%
C||nae cnange/env|ronnena| |ssues 37% 41% 24% SS% 32% 43% 42%
Rising education costs 22% !9% 26% 18% 23% 2S% 24%
Increasing globalisation !9% 18% 13% 32% 27% 21% 24%
Decrease |n ny counrys produc|v|y !9% 18% 24% 21% 16% 28% 16%
lncreas|ng need o |eep abreas ol
conp|ex ecnno|og|ca| deve|opnens
17% 12% 17% 29% 36% 26% 18%
Decrease |n ny counrys |nfuence/
power on global stage
17% 13% 30% 16% 9% 2% 13%
41 40
\nen | cones o vna subjecs ne nex genera|on
should study, the wealthy are adamant that they should
locus on ecnn|ca| subjecs. Tne op nree p|c|s,
nen|oned by C8%, S9% and S4% respec|ve|y are lT/
ecnno|ogy, nanena|cs and sc|ence. Non-ecnn|ca|
fe|ds |||e soc|a| sc|ences, n|sory and ars a|| cone |n
s|gn|fcan|y |over nan a pass|ng grade (under S0%).
Dr Wendy Piatt, D|recor Cenera| ol ne Russe|| Croup
vn|cn represens 20 |ead|ng UK un|vers||es, agrees |n
the importance of science, technology, engineering and
nanena|cs (STEM) subjecs as "STEM graduaes
earn nore on average nan oners.
As|ed lor n|s connen on n|s fnd|ng, Fuuro|og|s and
Founder ol \nas Nex, Richard Watson, pointed to
two factors that suggest some caution to this strong
technical emphasis is necessary. First, he highlighted the
dangers of teaching people to do things that machines
v||| be capab|e ol do|ng |n en o fleen years. "ll |s
simply the accumulation of facts and then the
application of those facts based on certain set rules or
|novn benav|ours, nacn|nes can do na. Sone ol ne
vea| areas lor nacn|nes are crea|ve nougn, nunan
enpany and |nerac|on. "Teacn|ng peop|e ansvers goes
v|nou say|ng, bu l n|n| eacn|ng peop|e nov o cone
up v|n good ques|ons |s becon|ng nore |nporan |n
nany |nsances.
"ln (a|so) concerned na |l you jus eacn pure|y
prac|ca|, bus|ness-ype s||||s, vnere does na acua||y
a|e us |n erns ol ne qua||y ol our n|n||ng l n|n|
we do need a broader education and we want to get
people to understand a bigger picture and a broader
conex, R|cnard \ason ven on o argue.
Dr Wendy Piatt agrees v|n ne need lor a v|der s||||
base. "ln our exper|ence, enp|oyers va|ue graduaes
across a range ol subjecs, olen v|ev|ng broader s||||s
as nore |nporan nan job-spec|fc or ecnn|ca| s||||s.
The rise of China is one of the great macroeconomic
sor|es ol our age, and ne s|gn|fcance lor luure
genera|ons |s revea|ed |n ne fna| ques|on na as|ed
vn|cn lore|gn |anguages |nd|v|dua|s le| vere nos
|nporan lor ne nex genera|on o |earn. Overa||, ney
thought that Chinese was marginally more important than
Eng||sn lor ne nex genera|on o |earn. ls |nporance
vas sressed bon by na|ve and non-na|ve Eng||sn
spea|ers, a|nougn ne |aer s||| p|aced Eng||sn anead ol
Cn|nese. As|ed o p|c| beveen Mandar|n and Canonese,
ne najor|y se|eced Mandar|n as ne |ey Cn|nese
language to learn.
ln nard nunbers, nere are lar nore frs-|anguage
Cn|nese spea|ers (!.2bn peop|e) nan lor any oner
|anguage ne nex |arges, Span|sn, boass 329n
and Eng||sn |s narg|na||y ben|nd a 328n (Enno|ogue).
Eu ne Cn|nese nrea o Eng||sn as ne g|oba| bus|ness
language seems limited, particularly when one considers
na nere are repored|y nore peop|e sudy|ng Eng||sn
in China than there are people in the United States
(Tne Econon|s).
Eeyond Cn|nese, ne Eng||sn |anguage na|na|ns |s
popu|ar|y anongs ne vea|ny. Sa|||o|o Mulvene
a ne Un|vers|y ol Cn|cago |nves|gaed ne don|nance
ol cera|n |anguages. H|s researcn lound na Eng||sn |s
a threat to other languages in countries where it is used
as a vernacu|ar, bu no a a|| |n counr|es vnere | nas
been adopted to help the local economy interface with
ne vor|dv|de econony. Tnus, Eng||sn |s no |||e|y
o overa|e lapanese or Mandar|n, a|nougn | cou|d
threaten French in Francophone African countries.
Ce|ng ecnn|ca| Language: a sign of the times
Chart 22 Subjects of Importance****
* US
** Mexico and Brazil
*** South Africa
**** The most important subjects for the next generation to study (respondents could select up to three)
Source: Ledbury Research
Total Europe
North
America*
Latin
America**
Middle
East
Africa*** Asia
IT/Technology 68% C9% 61% 8S% 80% 72% CS%
Mathematics S9% S9% 71% S2% S0% 74% S0%
Science S4% S4% C9% 32% S3% S!% 42%
Languages 49% S9% 28% S3% SS% 40% SS%
Social Sciences 20% 12% 12% 3S% 26% 17% 38%
H|sory 18% 17% 27% 16% 17% 6% !S%
Arts 7% 7% 7% S% 3% 2% 10%
Fn||osopny 6% 7% S% !S% 2% 2% 8%
Chart 23 Foreign Languages Worth Learning
Source: Ledbury Research
Chinese
69%
% Most important languages for the next generation to learn (all respondents)
0 20 60 40 80 100
Spanish 36%
English 68%
French 18%
German 13%
Arabic 12%
Japanese 12%
Hindi 9%
Russian 9%
43 42
"ln our exper|ence, enp|oyers va|ue graduaes across a range
ol subjecs, olen v|ev|ng broader s||||s as nore |nporan nan
job-spec|fc or ecnn|ca| s||||s.
Dr Wendy Piatt, Director General of the Russell Group
Chart 24 Foreign Languages Worth Learning*
* Top three most important languages for the next generation to learn (by country)
Source: Ledbury Research
Most Important Second Most Important Third Most Important
Where English Dominates
Ireland Chinese 72% Spanish 42% Russian 26%
UK Cn|nese 7S% Spanish 41% French 21%
US Chinese 66% Spanish 64% Arabic 21%
South Africa Chinese 64% French 34% Span|sn !9%
Australia Cn|nese 8S% Spanish 20% Frencn !C%/H|nd| !C%
Rest of the World
Monaco Eng||sn 90% Chinese 61% Spanish 26%
Spain Eng||sn 97% Chinese 71% Cernan 2C%
Sv|zer|and Eng||sn 9S% Cn|nese S3% Spanish 38%
Qatar Eng||sn !00% Cernan S3% French 31%
Saudi Arabia Eng||sn 92% French 44% Chinese 40%
UAE Eng||sn 82% Chinese 74% Spanish 22%
Hong Kong lapanese 2S% French 22% Cernan !2%
India Eng||sn 9!% Frencn 49% Cernan 37%
Japan Eng||sn 9S% Chinese 82% French 13%
Singapore Japanese 21% French 17% Cernan 7%
4S 44
This report has already discussed many of the UK-wide
fnd|ngs vnen | cones o ne conp|ex||es ol success|on
p|ann|ng. ln n|s fna| sec|on, ve dr||| a |||e deeper |no
ne UK survey daa o |den|ly sone d|llerences and
pecu||ar||es na ex|s a a reg|ona| |eve|.
UK regional
differences
47 46
London and South East a wealth and
conflict hotspot
London nas sone ol ne n|gnes |eve|s ol lan||y conf|c
associated with wealth in the UK, with 41% of high net
vorn Londoners exper|enc|ng sucn conf|c. Our researcn
across ne vor|d nas |den|fed na vea|n|er |nd|v|dua|s
end o exper|ence nore conf|c, and | |s nerelore no
surpr|s|ng g|ven ne sca|e ol vea|n |n ne cap|a|, na
nere are n|gn |eve|s ol conf|c. Converse|y, exper|ence
ol sucn conf|c |n ne Soun Eas |s jus 29%, noab|y
ra|||ng ne UK average ol 37%.
When it comes to their usage of wills, the picture in
bon London and ne Soun Eas |s nucn nore a||gned,
v|n 90% ol |nd|v|dua|s nav|ng v|||s |n London and 93%
nav|ng v|||s |n ne Soun Eas. Usage ol prenup|a|s |s
a|so s|n||ar, runn|ng a S% and 4% lor London and ne
Soun Eas, respec|ve|y.
North East and Yorkshire setting the pace nationally
Tnose |n ne Norn Eas and Yor|sn|re are par|cu|ar|y
sens||ve o ne burdens na cone v|n nav|ng vea|n,
with nearly 44% of the wealthy saying that inheritance
p|aces an "unnecessary burden on ne nex
genera|on. A s|gn|fcan lacor |n n|s |s ne|r re|a|ve|y
n|gn avareness ol ne lan||y conf|cs na end o
come with family wealth.
Ey a nunber ol neasures, ne Norn Eas and Yor|sn|re
are setting the pace for the rest of the country when
| cones o success|on. \|n near|y vo n|rds (C4%)
seeing the importance of succession planning, they
are in the top spot for this measure; they are also tied top
|n pr|or||s|ng proless|ona| adv|ce around |nner|ance and
op |n ne|r a|e-up ol v|||s. lndeed, everyone |n our
sanp|e ol n|gn ne vorn |nd|v|dua|s lron ne Norn
Eas and Yor|sn|re nad a|ready dravn up a v|||.
Tn|s proac|ve approacn o success|on pernaps par|y
exp|a|ns ne n|gn |eve| ol la|n na ne vea|ny lron
ne Norn Eas and Yor|sn|re nave |n ne|r cn||dren/
stepchildren to protect their inheritance.
Midlands dealing with serious trust issues
Our researcn d|sp|ays qu|e sar| rus |ssues beveen
ne parens and ne nex genera|on |n ne M|d|ands.
As|ed vnener ney rus ne|r cn||dren/sepcn||dren
to protect their inheritance, about half were either
anb|va|en or sa|d ney d|d no rus nen. Tn|s |s n|gner
nan ne UK average ol 4!% and s|gn|fcan|y n|gner nan
ne g|oba| average ol 34%.
Exp|or|ng ne assoc|aed area ol lan||y conf|c, ve a|so
lound conpara|ve|y n|gn |eve|s ol prob|ens assoc|aed
with wealth. Indeed, the Midlands are on par with
London v|n 4!% exper|enc|ng sucn conf|c.
C|ven nese dynan|cs, | |s concern|ng o see na ne
upa|e ol v|||s |n ne M|d|ands |ags ne na|ona| average.
As n|s repor nas |den|fed, la|||ng o p|an proper|y lor
ne pass|ng ol vea|n |s |se|l a |ey conr|buor o lan||y
conf|c, and nay add o nese prob|ens.
North West average, except when it comes
to prenuptials
Tne reg|ona| fnd|ngs |n ne Norn \es are very s|n||ar
|n nany respecs o ne na|ona| fnd|ngs. lndeed, nose
lron ne Norn \es n|gn be seen as be|ng a yp|ca|
slice of the UK wealthy population.
They put a little more emphasis on succession planning
nan ne average vea|ny person |n ne UK, bu ney do
not necessarily translate this into the appropriate actions.
lus 90% ol nen nave v|||s, aga|ns a na|ona| average
ol 93%.
Interestingly, whilst they may be slow with completing
their wills, their usage of prenuptials is amongst the
highest in the country. Around 8% of wealthy
|nd|v|dua|s lron ne Norn \es nave used prenup|a|s
aga|ns a na|ona| average ol S%, refec|ng a v|ev
amongst 24% of the regions wealthy that prenuptials
are "very |nporan.
South West fair warning to the next generation
Tne nex genera|on |n ne Soun \es nas ne nos
to worry about when it comes to securing inheritances
from todays wealthy. In this region, we found that
!0% ol ne vea|ny d|d no be||eve na asses snou|d be
passed on o ne nex genera|on. Tn|s vas n|gner nan
any oner reg|on and n|gner nan ne UK average ol C%.
Amongst those who are planning to pass on wealth
o ne|r cn||dren, ve a|so lound s|zeab|e nunbers
(!7%) vno |nended o lavour par|cu|ar cn||dren |n ne
a||oca|on raner nan s|np|y d|v|d|ng ne asses equa||y
amongst their children.
Ta|en ogener, nese resu|s e|| ne nex genera|on |n
ne Soun \es na ney snou|d no be a||ng expeced
inheritances for granted. If they do, they may be
unpleasantly surprised.
Scotland serious about succession planning
Across all the regions, we found that it was the
Scots who were the most concerned with planning for
success|on and |eav|ng sonen|ng ben|nd. Our researcn
lound na 72% ol ne vea|ny |n Sco|and be||eve | |s
|nporan o |eave a fnanc|a| |egacy vnen ney d|e,
aga|ns a UK average ol CC%. Add||ona||y, C4% ol ne
wealthy in Scotland said that succession planning was
|nporan (UK average. S7%).
Tne Scos are a|so snovn o be lerven be||evers |n
d|v|d|ng ne|r vea|n equa||y beveen a|| ne|r cn||dren
and pass|ng ne|r vea|n on o ne nex genera|on.
lus 2% ol ne Scos sa|d ney d|d no be||eve any asses
snou|d be passed on o ne nex genera|on.
We see fairly good follow-through on these good
|nen|ons vnen | cones o success|on, v|n 92% ol ne
Scos nav|ng v|||s, on|y s||gn|y |ess nan ne na|ona|
average ol 93%.
49 48
Chart 25-30 UK regional differences*
Wealth Leading to Family Conflict
% who slightly agree or completely agree with
ne saenen "ln ny exper|ence, lan||y vea|n nas
|ed o lan||y conf|c
UK Total 37%
London 41%
Soun Eas 29%
South West 34%
Midlands 41%
Norn Eas and Yor|sn|re 40%
Norn \es 38%
Scotland 38%
Passing Assets on to the Next Generation
% se|ec|ng ne saenen "l don be||eve any asses
snou|d be passed on o ne nex genera|on as ne bes
match for how they feel about inheritance planning
UK Total 6%
London 3%
Soun Eas S%
South West 10%
Midlands 8%
Norn Eas and Yor|sn|re 6%
Norn \es 8%
Scotland 2%
Level of Trust in Children/Stepchildren
% who do not agree with the statement
"l rus ny cn||dren/sepcn||dren o proec
ne|r |nner|ance
UK Total 41%
London 3S%
Soun Eas 43%
South West 37%
Midlands S0%
Norn Eas and Yor|sn|re 33%
Norn \es 42%
Scotland 41%
Burdens of Inheritance
% who slightly agree or completely agree with
ne saenen "lnner|ance p|aces an unnecessary
burden on ne nex genera|on
UK Total 35%
London 26%
Soun Eas 36%
South West 31%
Midlands 41%
Norn Eas and Yor|sn|re 44%
Norn \es 38%
Scotland 40%
Importance of Succession Planning
% who slightly agree or completely agree with
ne saenen "A |ey fnanc|a| pr|or|y lor ne |s
success|on p|ann|ng
UK Total 57%
London SS%
Soun Eas SC%
South West SS%
Midlands S3%
Norn Eas and Yor|sn|re 64%
Norn \es 60%
Scotland 64%
Use of Wills
% of respondents who currently
nave a v|||
UK Total 93%
London 90%
Soun Eas 93%
South West 97%
Midlands 9S%
Norn Eas and Yor|sn|re 100%
Norn \es 90%
Scotland 92%
Source: Ledbury Research
Chart 31 Division of Assets amongst Children*
* % respondents selecting each statement as best matching how they feel about inheritance planning when it comes to passing on assets to children
Source: Ledbury Research
UK Total London
South
East
South
West
Midlands
North
East and
Yorkshire
North
West
Scotland
Assets should be
equa||y d|v|ded anongs
all children
78% 78% 84% C9% 74% 72% 76% 86%
Assets should be allocated
differently by child
13% 13% 8% 17% 18% 12% 14% 12%
l don' be||eve any asses
should be passed on to the
nex genera|on
6% 3% S% 10% 8% 6% 8% 2%
Don' |nov 4% 6% 3% 3% 0% 10% 2% 0%
S0
Contact us
For nore |nlorna|on or o be |nvo|ved |n ne nex repor,
email Barclays.wealthinsights@barclayswealth.com
Te|. 0800 8S! 8S! or d|a| |nerna|ona||y 44 (0)!4! 3S2 39S2
www.barclayswealth.com
Conclusion
F|ann|ng lor vna nappens aler dean |s no sonen|ng
na |s easy lor anyone. As ve nave seen, cu|ures across
ne vor|d, espec|a||y |n Eas As|a, lee| unconlorab|e even
n|n||ng abou ne|r ovn nora||y, nucn |ess p|ann|ng
for it. Yet wealth comes with responsibility and, in many
cases, conf|c. our researcn nas lound jus nov lan||y
wealth can be a double-edged sword. The good news
novever, |s na our survey a|so revea|ed na vea|n does
no necessar||y br|ng conf|c. ln lac, ne fnd|ngs nave
added to a growing body of research that shows that
wealth, or at least income, can bring happiness.
Tne survey nas sned ||gn on sone ol ne conp||ca|ons
associated with succession planning. The fast-changing
vea|n genera|on |andscape neans na va|ues and
beliefs shift between generations. In many regions the
family unit is now multi-faceted and disparate. It is
therefore not unreasonable to see elements of distrust
as an undercurrent in some high net worth families.
lrrespec|ve ol ne conp||ca|ons v|n pass|ng on asses,
fnanc|a| or bus|ness, n|gn ne vorn |nd|v|dua|s are |een
o bequean sone |egacy o ne|r cn||dren. \na ve nave
seen |s na ne lan||y un| does no a|vays vor| v|n|n
ne rad||ona| gender ro|es. H|gn ne vorn nusbands
and laners are nore |||e|y o a|e ne |ead |n |oo||ng a
success|on p|ann|ng, as opposed o v|ves and noners.
\e expec n|s o cnange |n ne luure.
The research has also shown that wealth transfer is a
n|gn|y eno|ve and conp|ex subjec area. l |s an area
vnere objec|ve, proless|ona| adv|ce |s eas||y ava||ab|e
and eminently sensible: sensible to facilitate both
fnanc|a| and lan|||a| sab|||y. Hovever, ne perce|ved
|nporance ol n|s adv|ce |s no un|versa|, even anongs
nose vno vou|d benef nos lron |.
H|gn ne vorn |nd|v|dua|s are concerned v|n prepar|ng
ne nex genera|on lor vna ne luure n|gn no|d.
Tn|s a|es ne lorn ol ecnn|ca| and |anguage s||||s,
bu a|so lan||y va|ues and fnanc|a| sab|||y, |n order o
equ|p ne|r cn||dren |n ne bes vay poss|b|e o surv|ve
the tests of time.
Legal note
\n||s every ellor nas been a|en o ver|ly ne accuracy
of this information, neither Ledbury Research nor Barclays
Wealth can accept any responsibility or liability for reliance
by any person on this report or any of the information,
opinions or conclusions set out in the report.
This document is intended solely for informational
purposes, and is not intended to be a solicitation or
oller, or reconnenda|on o acqu|re or d|spose ol any
|nvesnen or o engage |n any oner ransac|on,
or o prov|de any |nvesnen adv|ce or serv|ce.
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