Let's talk

Enter your details, and we'll call you

* Required Fields

Providing an honest and impartial service to our clients. Privacy Policy

Passing Your Wealth To The Next Generation

28/06/18 Estate Planning

Your calculations may show you should have enough set aside to comfortably see you through retirement. Perhaps you would like to pass on some of your wealth to the next generation on your death? If so, there are several issues to think about. Tax implications, how much to give, who to give it to and when all need careful thought.

Who Should Inherit And When?

For many, the obvious answer is children should inherit. However, they may be in their early to mid 50’s and hopefully they will be financially secure. The same cannot be said for your Grandchildren. They may be saddled with student debt or facing problems securing a foothold on the housing ladder.

So should it be the children or grandchildren who inherit? There is lots to consider. You may trust your children and grandchildren but (to be blunt) what about their partner? If passing wealth down to grandchildren are they mature enough to handle their new found wealth appropriately.

Sometimes there are difficult questions to be asked and decisions made as part of a estate management process. It may be impossible to guarantee your wishes are carried through over the long term but a Will and/or Trusts (see below) can help.

How Much To Give

How much wealth can you pass on (in a tax-efficient way) without leaving yourself financially exposed? Nobody can predict the future, what your cash demands will be and how fast you may need access to funds. It is important to remember the risk factors that may impact on your retirement income.

The population in general is living longer. The older you are the higher some of the risks to your retirement income. It is important to ensure you do not run out of money in retirement.

You should ensure you have easy access to funds should the need arise. However, this should be balanced against the tax implications.

Make A Will

If you have no Will your assets (and tax bill) will be allocated to your relatives according to the intestacy rules. There are several potential traps in the rules and if you want to be sure your wishes are acted upon on your death it is best to have a Will in place.

Trusts can deliver control over how your assets are used by future generations. They can also protect (to an extent) against complex family issues compromising your wishes long after your death.

For example, Trusts may protect your beneficiaries legacy should there be any marital disputes. They may also help ensure beneficiaries use their inheritance wisely. Trusts may also be used to manage Inheritance Tax (IHT) issues (see below).

It is possible to place up to £325,000 into a Trust every seven years. Assuming you do not die within those seven years the amount in trust will be outside of your estate (and therefore IHT free) on your death. Trusts and their tax implications are complex and it is important to take appropriate financial advice.

Tax Considerations

You may be tempted to hold a level of cash (or ISA’s) to cover any short-term unexpected expenses. You may believe cash will be easier for your beneficiaries to deal with after your death. It is important to remember these cash and ISA’s are included in an IHT calculation and therefore need to be managed appropriately.

Inheritance Tax legislation is complex. There are those who have tried to exploit loopholes in the legislation over the years and many have been closed. It is important to take professional advice rather than make invalid assumptions. A wrong move may leave your beneficiaries with a significant IHT bill that they will need to pay within 6 months of your death.

Should the above raise any questions simply give us a call or open a Chat and we will be happy to help. If you would like a more detailed discussion on managing your estate complete the form below and we will call you back or email us.


This blog is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investment or course of action. The past is not a guide to future performance. The value of investments can go down as well as up and you may not get back the full amount you invested. Tax and financial regulations can change. Any figures quoted above are correct at the date of publication.