The overlooked significance of spousal wealth transfer

Business Times

23-05-2025

WHEN it comes to wealth transfer, most of the attention is placed on intergenerational flow of assets – grandparents to their children or grandchildren, for example. This is famously termed the 'Great Wealth Transfer'.
However, a crucial interim step and form of wealth transfer is often overlooked: the horizontal inter-spousal transfer.
In the US, between 2024 and 2048, a staggering US$54 trillion are expected to first be passed between spouses before being passed on to other generations. Of that amount, 95 per cent will go to women.
This massive transfer of assets will play a powerful role in reshaping the global financial landscape, influencing wealth preservation strategies, succession planning and investment trends worldwide.
For ultra-high-net-worth (UHNW) individuals, estate planning is no longer just about ensuring smooth succession for future generations. It must also include securing the financial stability of the surviving spouse, particularly when they may not have been the primary financial decision-maker.
A quiet but powerful shift
A key driver behind the rise in spousal transfer, especially to women, is demographic: Women, on average, outlive men by an average of five years globally. In East and Central Asia, the gap is even wider. This means inheritance will often go to the surviving widow before reaching the next generation. As a result, women in Asia are increasingly accumulating wealth and taking greater control over financial decision-making.
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Yet, despite its scale and inevitability, horizontal wealth transfer is often poorly planned, highly emotional and riddled with vulnerabilities. Shockingly, in the US, 70 per cent of widows change financial advisers within a year of their spouse's passing, highlighting a significant gap in continuity and preparedness​.
In many cases, the issue is relational. Women are more likely to switch advisers if they do not feel a sense of personal connection or trust, underscoring the need for deeper, more empathetic engagement long before a transition occurs.
It's time we change that.
Across Asia, where multi-generational family businesses are common, the transfer of wealth often prompts deeper structural shifts. According to McKinsey & Company's Asia-Pacific's Family Office Boom, an estimated US$5.8 trillion in intergenerational wealth are expected to be transferred among high-net-worth (HNW) and UHNW families. However, many are unprepared for this transition, leading to avoidable financial stress, particularly during the emotionally difficult period following the loss of a family member.
The problem isn't the money, it's the strategy behind it.
Strategies to safeguard horizontal wealth transfer
1. Early, inclusive planning
Many UHNW families in Asia still operate under traditional wealth dynamics, where the husband often takes the lead in investment decisions. Without active engagement, a widow often lacks the confidence or relationships needed to manage inherited wealth effectively.
To avoid this, financial advisory firms must involve both spouses equally in financial decision-making and offer tailored solutions that ensure continuity and confidence in wealth management.
2. Integrating risk management in wealth transition
Beyond asset allocation and succession planning, UHNW families should integrate life insurance solutions in their wealth transfer and preservation process.
As a strategic risk management tool, life insurance can mitigate financial risks associated with wealth transfer by providing immediate liquidity for debts and taxes, creating a financial safety net for the surviving spouse, preserving asset control and avoid shareholding dilution.
3. Establishing flexible trust structures
Trusts have long been a preferred vehicle for preserving wealth across generations, but they must also be structured to provide the surviving spouse with sufficient control, while ensuring long-term asset protection.
Flexible trust arrangements allow for income distribution, philanthropic pursuits and access to liquidity, ensuring that the surviving spouse can sustain their lifestyle while preserving family wealth for the next generation.
While the 'Great Wealth Transfer' has long been viewed as a single vertical flow, the horizontal phase between spouses is increasingly recognised as pivotal. UHNW families in Asia must be prepared to navigate both the horizontal and vertical transitions strategically.
Early, structured engagement with spouses, an empathetic advisory approach, and clear family governance can ease the path, preserving wealth stability and enabling UHNW families' legacies to withstand generations.
The future of wealth management is not just about preparing for the next generation, it starts with protecting the present.
The writer is CEO of Singapore and Malaysia, Howden Private Wealth