Gen Z must be financially independent and not ‘rely’ on Great Wealth Transfer, say UAE experts

Based on this, Dubai-based financial experts are warning of a transformation in global inheritance patterns as the world prepares for the largest wealth transfer in history.

With longer life expectancy and mounting healthcare costs, the traditional concept of passing wealth to the next generation has evolved from certainty to mere possibility.

The world is preparing for the ‘Great Wealth Transfer’ say Dubai finance experts

“Younger generations should plan for financial independence without relying on inheritance. This means focusing on saving, investing, and building their own wealth. Expecting an inheritance is risky, as circumstances can change, such as medical costs or lifestyle choices that deplete available assets,” Stuart Porter, a wealth coach based in Dubai told Arabian Business, adding that inheritance has shifted from being a “traditional expectation.”

“In previous generations, it was assumed that wealth, particularly property, would be passed down to children. Today, however, many people prioritise their own retirement and lifestyle needs, with less focus on leaving a financial legacy. This change, coupled with longer life expectancies and rising healthcare costs, has significantly impacted how people think about inheritance,” he said.

The transformation comes as the world prepares for what financial circles term the ‘Great Wealth Transfer’ – an unprecedented transfer of up to $90 trillion from baby boomers to younger generations over the next two to three decades, the report by Fortune said.

“This transfer is significant because it’s not just a financial event, but also a societal shift in terms of who holds wealth. The way this wealth is managed, transferred, and taxed could have major implications for the global economy, especially as younger generations face more complex financial landscapes than their parents did—rising housing costs, student debt, and an unpredictable job market, etc.,” Dubai-based finance expert Mike Coady added.

The UAE’s position as a global expat hub adds complexity to this wealth transfer. While the Emirates operates under a no-inheritance-tax regime, expat residents must navigate inheritance laws in their home countries alongside local regulations.

“In the UAE, expatriates may come from many different backgrounds where inheritance is valued differently, affecting their expectations and planning,” Porter said, adding that “often they will have taken positions overseas to provide for their parents – a reverse of the Great Wealth Transfer.”

A phenomenon known as “SKIing” (spending the kids’ inheritance) has emerged among wealthy residents who prefer to enjoy their wealth during their lifetime, according to Porter. This trend, coupled with increasing life expectancy and healthcare costs, means less wealth might be available for traditional inheritance, he added.

UAE parents support children during their lifetime

Moreover, the role of property in inheritance presents particular challenges in the UAE market, Coady explained. While real estate has traditionally formed a significant portion of inherited wealth, the UAE’s dynamic property market adds another layer of complexity to inheritance planning.

“Real estate often represents a significant portion of inherited wealth, especially in countries where property ownership is high. However, real estate can also bring complications, particularly in terms of tax liabilities. For instance, in countries with inheritance tax, the value of property can push estates over the exemption threshold, leading to large tax bills for heirs. Inheritance of real estate is also subject to local laws; in some places, joint ownership with heirs or lifetime gifting is a strategy to mitigate taxes. Cultural factors come into play as well—in some societies, passing down the family home is a tradition, while in others, the focus is on liquid assets like investments,” he said, adding that the UAE’s tax-free environment makes it “attractive for wealth transfer, but unfortunately this isn’t the norm globally.”

Which is why many UAE-based parents now opt to support their children financially during their lifetime rather than leaving a posthumous inheritance. This support often takes the form of education fees, home deposits, or living expenses.

“Parents who help their children with education, housing, or starting a business may feel they have already transferred a significant portion of their wealth during their lifetime” he said.

“This could mean less is left behind in traditional inheritances. It also raises the question of fairness—if one child receives more help during their lifetime, parents might not feel obligated to leave equal inheritances. This evolving dynamic, coupled with shifting cultural expectations, makes intergenerational wealth planning more fluid than it used to be.”

The UAE’s multicultural environment highlights how cultural differences influence inheritance attitudes. While some communities maintain strong traditions of wealth transfer, others emphasise financial independence – making this diversity in the UAE a unique case study in global inheritance trends.

However, economic factors such as inflation and market volatility further complicate inheritance planning for UAE residents.

“This could mean less is left behind in traditional inheritances. It also raises the question of fairness—if one child receives more help during their lifetime, parents might not feel obligated to leave equal inheritances. This evolving dynamic, coupled with shifting cultural expectations, makes intergenerational wealth planning more fluid than it used to be,” Coady said.

So, what can Gen Z and upcoming younger generations do to save more?

According to Porter, here are some tips to manage wealth transfer effectively:

1. Open communication – Although often a taboo subject, families should discuss their financial plans and expectations openly.
2. Estate planning – Wills, trusts, and tax-efficient strategies can ensure wealth is passed on in the most effective way.
3. Gifting during life – Some parents may prefer to gift their children money while they are still alive to avoid high inheritance taxes.

“Younger generations should focus on creating their own financial stability by saving, investing, and being mindful of their spending habits. The Great Wealth Transfer could provide opportunities, but it’s important not to rely on it. It’s better to be prepared and independent,” he concluded.