More than a third of high net individuals do not trust the next generation to protect their inheritance according to a new global study released by Barclay’s Wealth.
The United States ranks sixth among the top seven global regions with the highest level of trust in children and stepchildren to maintain the family wealth. The survey found that developed countries display higher levels of uncertainty. Topping the list is the Middle East (78 percent), followed by Africa (77 percent), Latin America (75 percent), Asia Pacific (69 percent), Europe (62 percent), North America (61 percent) and Australia (59 percent).
Wealth can be a blessing and a curse, as evidenced in global attitudes toward wealth and succession. The belief that inheritance places an “unnecessary burden” on the next generation resonated with 29 percent of respondents. Of these, high net worth individuals in India (50 percent), Latin America (44 percent) and Hong Kong (38 percent) were most in agreement.
“Money won is a lot sweeter than money earned,” Vince Vaughn proclaimed in Dodgeball, but the world’s wealthy do not share this attitude when it comes to the next generation. While nearly all of the survey respondents said they indent to pass their wealth on to their children, the predominant attitude was that earned wealth was more likely to result in happiness.
Seventy percent of respondents said that assets should be divided qually amongst their children. That apparently doesn’t satisfy everybody. Forty percent said they had direct experience of family wealth leading to disputes. This figure was highest amongst respondents from India (61 percent). The sentiment was echoed in Singapore (53 perent), Hong Kong (51 percent) and Monaco (51 percent). They must have good family counseling in Qatar, where only 11 percent of respondents said that wealth had caused rifts within the family.
As for the challenges facing the next generation, more than half of the global wealthy (56 percent) rank economic turbulence as the most pressing, followed by care for aging populations (52 percent), unemployment (51 percent), climate change (38 percent) and rising education costs (22 percent).
To better prepare their offspring, parents advocate learning IT/technology (68 percent), science (59 percent) and math subjects (54 percent), instead of humanities and the arts. More of the world’s wealthy think it will be just as beneficial for their children learn Chinese (69 percent) as English (68 percent).
"The report has found that wealth is not the only thing that parents can pass on to their children,” noted Catherine Grumm, director, wealth advisory at Barclays Wealth. “Sharing insight into what the future holds, imparting advice on what it takes to be successful, and the skills needed to equip younger generations to achieve their goals in life are also important to parents.”
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.