There are a number of different ways of going about transferring wealth to the next generation. The best known and commonly used option is a will. These legal declarations are extensively employed by the wealthy; our research establishes that more than three-quarters of high net worth individuals around the world have wills.
In the US, almost everyone has a will (94%) and this is only slightly less commonplace in Europe (87%), whilst in Asia and the Middle East this stands at around 50% on average. The uptake of wills within countries is influenced by whether or not “heirship” laws exist, which spell out how part or all of a deceased’s estate must be divided. Such laws are common in civil law jurisdictions, such as in France, Spain, Italy and Latin America.
In Japan, individuals do not typically write wills, instead they express their wishes in general and polite terms, and the family reaches consensus on how assets will be distributed. Birth order is a key determinant here, and sometimes all the property may go to the eldest son. This approach is in keeping with the culture in Japan. Shimon Takagi, Partner at White & Case in Tokyo explains that there is a common view across East Asia that, “property is not your property; you are only borrowing it… We don’t have a strong desire to control something after we die.”
Some 69% of wealthy individuals have revised their wills at least once and 26% have revised them three or more times. These will revisions are predominantly driven by financial reasons and life-stage events. The top four reasons for revising wills in order of importance are: an increase in wealth, tax efficiency/tax planning, marriage/new partners and birth of a child.
Source: Barclays Wealth Insights.