Want to see my heirs enjoy the money while I am still alive Want to help pay for my heirs’ education Want my family to be taken care of if I were to pass away unexpectedly To help teach my heirs valuable money management lessons while I am still alive To help my heirs pursue a passion or business venture while I am still alive To obtain the tax benefits by giving to family members

Share it Well: Investor insights and expert tips in inheritance

Q: See what gets passed down

Easier to divide Harder to divide

Let’s talk about wealth transfer.

In the next 20 years, $84 trillion expected to pass to younger generations

$57 trillion to Gen X and Millennials alone, according to Cerulli Associates, US High-Net-Worth and Ultra-High-Net-Worth Markets 2021.

So why aren’t more people talking about transitioning wealth?

While 72% of investors have an estate plan, 8 in 10 are concerned about a smooth wealth transfer.

Half struggle with how to divide assets fairly.

And, they’re not talking.

6 in 10 heirs never had in-depth inheritance discussions with their parents.

And it’s not just about money.

Investors want to pass on values.

Top 3 values they want to pass on: 79 % family work ethic; 68% family culture; 66% family traditions.

But how to instill those values isn’t so clear cut.

The good news: All generations agree how to spur action.

6 in 10 say: Have a formal estate plan; have more open communication; have parents bring up the topic.

What does this mean for you? It’s a good time to talk.

Get the full story: UBS Investor Watch.

Share it well: Discussing and dividing wealth across generations

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Inheritance planning is top of mind for US investors

Even though high net worth investors have made strides over the last eight years with estate planning, they worry about the financial and familial discord that can accompany wealth transfer.

Eight in 10 investors say they want the inheritance process to go smoothly. Nearly as many are concerned about minimizing taxes and making sure that beneficiaries use their inheritance wisely. And many want to give while living.

Investors have become more diligent about preparing …

I have a wealth transfer/estate plan

0 %

0 %

... but they have concerns about transferring wealth

% important

The transfer of assets goes smoothly

The transfer of assets is done in a tax-optimized way

My heirs use their inheritance wisely

More than money

Beyond transferring assets, investors want to pass on their family’s values. Yet

4 in 10

benefactors said they worry that heirs don’t share their values.

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And many don’t want to wait until the end to help heirs

prefer to pass on wealth while still living

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See why

But many aren’t having the conversations critical to a smooth transfer

Investors are reluctant to have “the talk” about inheritance plans. Half of benefactors have not shared how much they’re worth and a third haven’t said how they intend to divide their assets.

Why? Many families simply aren’t comfortable talking openly about finances. Benefactors say that inheritance planning isn’t a pressing issue, and their heirs feel it’s a depressing topic. In addition, parents don’t want heirs to feel entitled, while heirs don’t want to appear greedy.

Benefactors are withholding important information …

My heirs don't know how much I have

I have not shared my most recent will with my heirs

My heirs don't know where all my wealth is (e.g., accounts)

My heirs don't know how my wealth will be divided

… and families struggle to start the conversation

“It’s not a pressing issue”

Benefactors

Inheritors

“Don’t want heirs to feel entitled or appear greedy”

“We don’t talk about financial issues in the family”

“It’s a depressing topic for everyone concerned”

“I’m not sure how to bring up this topic”

Dividing an inheritance fairly complicates the process

Many US investors grapple with the notion of fairness. Half, for example, are struggling with how to share their assets in a way they consider fair, particularly if it means dividing assets unequally.

Benefactors who have resolved to favor some heirs over others are clear about why: 70% will give more to heirs with whom they have closer relationships. Others cite heirs’ financial needs and shared values.

Benefactors find it challenging to divide assets

49%

struggle to divide assets fairly

Why certain heirs will inherit more

We have a closer relationship

Greater economic need

Different generations will receive different amounts

I trust them more with money

They live in a way that more closely matches my values

They took more responsibility caring for me

Conflicts, lack of communication negatively impact wealth transfer

Failure to take the necessary wealth transfer steps can result in financial loss and family discord. Many estates pay excess taxes without protection strategies in place. Others are subject to court decisions and delays when benefactors neglect to draft wills and other documents.

Many heirs have experienced such fallout. One quarter of those we surveyed admit to having conflicts with other heirs. Among heirs who also served as executors, 55% said carrying out their benefactors’ last wishes was difficult.

Failure to take steps had consequences

0 %
Heirs who experienced conflicts over the division of assets

0 %
Heirs who served as executors said carrying out last wishes was difficult

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See what gets passed down

How to spur action on inheritance planning

Though obstacles exist, and wealth transfer can be complicated, both benefactors and potential heirs agree on how to break down barriers.

Topping the list is having a written wealth transfer plan. Investors also cite having more open communication and insight into how other families approach estate planning and professional assistance. Both agree that parents should initiate the conversation.

Benefactors and heirs agree on meaningful action …

Have a formal wealth transfer/estate plan

Have everyone involved in the same room to discuss together

Have more open communication

59% of benefactors and 59% of inheritors believe more open communication is needed.

Learn how other families approach this topic

Have a professional facilitate discussions

Spotlight on family dynamics

Family dynamics and the type of assets being passed, particularly family businesses, can complicate inheritance plans.

More than half of the families we surveyed are made up of a first marriage with children. But one in five investors are in “blended” families with stepchildren, and just as many investors have no children.

Not all families look alike

Pie chart showing that 54% of investors are in a first marriage with children; 20% are in blended families with stepchildren; 20% have no children; and 6% are widowed, divored, single investors with children, or not married but have children.

Blended families find dividing assets more difficult …

% who struggle to divide assets fairly

… and are less likely to divide assets equally

Some heirs will inherit more than others - Blended 40% and Not blended 30%

Divide equally among all heirs - Blended 60% and Not blended 70%

Investors without children give more to charitable causes …

… and are likely to give more to some heirs than others

Percentage comparison showing that 52% of investors without children are likely to give more to some heirs than others, compared to 48% dividing equally among all heirs. And among investors with children, 30% are likely to give more to some heirs than others, with 70% dividing assets equally.

But they also tend to communicate less

Percentage comparison showing that the heirs of 31% of investors without children know where the wealth of their benefactors is, compared to 57% of investors with children. And among investors without children, 60% know how the wealth of their benefactors will be divided, with 34% of those with children knowing.

Many business owners plan to pass their business on to family

Circle chart with coin icons in middle showing that 44% of business owners plan to sell or transition their business to family members.

But they aren’t sure how to divide assets …

Struggle to divide evenly

Haven’t set expectations about business transition

… or whether heirs want the business

What business owners think their heirs want

Line chart showing that 67% of business owners think their heirs want their business, wth 33% wanting assets from the sale of that business.

What heirs actually prefer

Line chart showing that actually only 52% of heirs want the business, wiith 48% of heirs wanting assets from the sale of the business.

About the survey:

For this edition of UBS Investor Watch, we surveyed 2,259 US investors with at least $1 million in investable assets. The research was conducted from April - August 2022.

Learn more about passing on values

Explore more about Multigenerational wealth