What will your kids do with your legacy? Intergenerational wealth planning and the trust factor.

 16 November 2022
What will your kids do with your legacy? Intergenerational wealth planning and the trust factor.

Do you trust the next generation to make the best use of what they inherit? A new national survey suggests that 25% of baby boomer parents don’t believe that the younger generation will.

The “Planning to pass it on” survey also revealed that 48% of the same parental age group considered that:

“The attitudes and priorities of younger generations affect their decision-making around transferring wealth to the next generation.”

BUT (and it’s a big but):

  • Only 6% saw inheritance and estate planning as an important goal
  • Only 3% of the people surveyed had consulted a professional (a financial adviser, accountant or solicitor)
  • 18% considered their lack of knowledge around was a significant obstacle to inheritance planning

As a result, less than 50% of survey respondents had no structured estate planning in place.

As the financial advisor who wrote the article commented, this isn’t the case for her current clients. They have already made the mental shift and consulted someone to help with their estate planning (i.e. her!).

Trusting the next generation in-laws

One of the major areas of concern the author identified was around trusting the partners of the younger generation. Those doing the estate planning wanted to ensure money and assets stayed in the family even if their adult children’s relationships / marriages broke down.

This is where Trusts can be effective in ‘ring fencing’ money and assets for specific people (and effectively excluding others.) Trusts can also designate funds for specific purposes, such as school fees for grandchildren. For more details, see our page on Trusts.

Lack of estate planning knowledge

The article also highlighted the current state of uncertainty over how much their own retirement and later years would cost. When combined with a lack of knowledge about how to do it, this was causing those without plans to become “paralysed into inaction.” At Panthera estate Planning, we also suspect that people are concerned that estate planning will in itself cost a lot of money, and is therefore only for those with substantial assets and wealth.

Nothing could be further from the truth. Many of our clients have liquid assets worth less than £150,000. This is what many consider their estate to be worth in total.

However, this figure does not include their family home, or heirlooms such as jewellery. When they include the home, pensions, shares and other hidden assets, their estate can easily be nearer the £1million figure.!

You’ll probably be surprised just how much you may be worth “on paper” too. If you own your own home here in Hampshire, the average house price is (at time of writing) an impressive £402,968. That’s 16% up on pre-pandemic levels in 2019 of £346,850. If property prices continue to rise, so will the value of your estate.

That’s why estate planning for the next generation is important to avoid your estate paying more Inheritance Tax than it need to. Remember, the more IHT the estate has to pay, the less is left for your children and grandchildren.

Estate planning the easy way

We find the best way to start estate planning is just to talk about it with someone who knows about it.

That’s why we offer an initial, no obligation consultation with Panthera Estate Planning, either in person here in Waterlooville or online with Paul Hammond. There’s no hard sell, just a chance to talk through your concerns, ask about options and take a brief overview of what you’ve got, and what you want to do with it in the future.

  • If you then want to start making plans together, that’s great, we can then set up a meeting to really dive into the details.
  • If you don’t want to go ahead just now, that’s also fine - it’s always your choice. You can always just sign up for our newsletter and read our regular blogs until the time is right for you.

Want to take the first step?

It’s easy.

We are genuinely here to help, so do get in contact. Our ground floor office in Cowplain is easy to find, with convenient parking and level access from the street.

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I have no reservations about Panthera - they appear to be a forward thinking company making life for the client a pleasure to deal with. I would thoroughly recommend them to anyone who needs sound professional advice concerning Estate Planning.

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