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Publish date

23 May 2023

Concerns are growing over passing on and protecting wealth in the future –with inheritance tax being the biggest worry

We recently carried out a poll asking individuals to share their biggest concern when it comes to passing on and protecting their wealth in the future.

According to the results, the biggest concern people have is around the potential exposure to inheritance tax (over 70%). Protecting gifts and inheritance to children or grandchildren from their partners or spouses if things go wrong was also high on the list of worries, with nearly half (42 %) citing this as a concern. An equal number of people also highlighted being able to gift assets to loved ones but ensure they have enough funds for their own needs as an issue.

This was followed by concerns around being able to ensure that both your spouse and any children from a previous relationship are looked after, with 35% of those asked indicating that this was a worry for them. Other concerns highlighted included protecting family wealth if a child or grandchild moves in with a partner and having someone to act on your behalf should you no longer have capacity to make decisions.

Commenting on the results, Simon Mitchell, Head of Wills, Estate and Tax Planning division says: “This poll shows that the longstanding concern that clients have concerning their exposure to inheritance tax is still very relevant. However, there are steps which clients can take to minimise their tax exposure. Through careful and considerate estate planning, this worry should lessen as you can take advantage of exemptions (should they apply), lifetime gifts, and the use of trusts and family investment companies.”

“Another common concern is the possibility of their children divorcing and whether this would allow their child’s former spouse to make a claim against assets inherited from the parents’ estates. This can be mitigated by creating wills which leave their estate in trust on their deaths. The trust means that the inheritance does not belong to the child outright and is therefore much better protected in the event of a divorce. At some later point, the trust can be wound up and the assets distributed to the child when it is safe to do so.”

“The increase in blended families can also make estate planning more complex, as the results of the poll show. Many people are understandably keen to ensure that their assets can be passed on to benefit both their current spouse or partner and any children or step children from current or previous relationships. There are some estate planning solutions that can help ensure that the needs of everyone involved are catered for. One of the most popular of these is to set up a life interest trust under a will.”

“For example, taking this approach would allow an individual to ensure that their surviving spouse can continue to live in the family home and receive an income from the estate until their death. The remainder of the estate would then pass back to the deceased’s children. The life interest in favour of the surviving spouse benefits from spouse exemption for inheritance tax purposes, and the structure also guarantees that the deceased’s children can then inherit the estate outright following the survivor’s death.”

Similarly, people were also concerned about protecting family wealth if you are getting married or moving in together. There are many steps that you can take in order to protect your family wealth if you are getting married.

Helen Waite, Partner in the Family team adds: “People are often concerned about finances and protecting family wealth should you go through a divorce. In order to protect your wealth if you are getting married you should consider entering into pre-nuptial or post-nuptial agreement (or both for added security) which sets out your intentions should the marriage break down, and provides the best protection of your assets.

“They can include intentions as to the ownership of assets, future inheritances, incomes and liabilities and how you want your finances to be dealt with following a separation. They can define non marital assets, which can be all important. Nupital agreements can help to avoid the emotional and financial impact if the marriage comes to an end, as the clear intentions of the spouses are set out.”

“A note of caution though, while pre and post nups are becoming increasingly popular, it is important to ensure that they are properly drafted, to give them the best chance of being upheld.”

“With more and more couples choosing to live together rather than marry, another consideration is cohabitation agreements. Such agreements set out how property is owned, what contributions each party will make and how thing will be divided if the relationship comes to an end.”


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