The rise of the ‘living inheritance’

There appears to be a significant shift in how families think about inheritance.

Sky News published an interesting article today looking at what it describes as a “generational shift” in how people think about inheritance, with more families choosing to pass wealth to the next generation during their lifetime rather than waiting for it to be inherited after death.

It is easy to understand why.

For many younger people, financial help towards a first home or support at an important point in their lives may have considerably more impact now than an inheritance received decades later.

But giving wealth away during your lifetime should not be considered in isolation.

A substantial gift can have implications for inheritance tax and your wider estate planning. It may change what your Will needs to say. Where money is being provided to help with a property purchase, families should also be clear about whether it is genuinely a gift or whether it is expected to be repaid.

For larger or more complex estates, there may also be questions around trusts, business or investment assets and how lifetime giving fits within the family’s longer-term plans.

And perhaps most importantly, nobody should give away more than they can comfortably afford. Later-life care and changing personal circumstances can make future financial needs difficult to predict.

There is something very positive about wanting to see the next generation benefit from your wealth during your lifetime. The important thing is to make those decisions deliberately and with a clear understanding of the consequences.

How We Can Help

If you are considering making substantial lifetime gifts, our Legacy team can help you understand how they fit within your Will and wider estate planning. please contact our Legacy Department on enquiries@lauruslaw.co.uk