UBS just published the sixteenth edition of its annual Global Wealth Report, and it is chocked full of interesting data and perspective on all aspects of global wealth. I was particularly impressed by the section on female inheritance in the United States. Women often experience two wealth transfer events in their lives: receipt of assets from parents, and sole control over their own family assets when their spouses die. UBS recently completed a survey of 2,000 female investors, each of whom had at least $1 million in investable assets. Eighty percent of those who had inherited assets admitted having faced challenges including not knowing the extent of their parent’s wealth or encountering financial surprises. One-third had no prior conversations with parents regarding wealth transfer and 40% actually inherited funds without any estate plan in place.
Among those not yet having received assets, 74% said they are not prepared to handle an inheritance without considerable difficulty. One third say they have no idea where their parents’ assets are located, how they will be divided, and whether there are any estate plans in place.
While these surveys focused on inheritance from parents, I suspect the story would be largely the same for spousal assets.
Forecasts indicate that as much as 70-80% of the coming $83 trillion transfer will accrue to women, and McKinsey estimates that women will control two-thirds of all wealth by 2030. Most important, BankAmerica estimates that women are responsible for charitable decisions in roughly 85% of families and women tend to be more charitable than men. Specifically, another BankAmerica study found that among high-net-worth families, 93% of women donate regularly as compared to 87% of men.
In any case, there are four steps that every woman should take to prevent the difficulties cited above:
- Initiate conversations with spouses and parents about values, legacy, and financial plans before it is too late.
- Seek Professional Advice to understand financial options and create a personalized plan. It is incumbent on financial advisors to insist that both spouses be included in planning sessions and periodic investment reviews.
- Gain financial knowledge on budgeting, tax and estate matters, and investment products.
- Include siblings and children in the process to prevent family conflict.