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05 Jan 22
Should you leave an inheritance to your children?
Recent trends in inheritance planning
Reportedly worth over £115m, the iconic James Bond actor Daniel Craig recently returned to the big screen starring in “No Time To Die”. However, the 53-year-old actor has recently hit the headlines saying that he doesn’t plan to have much money left to give to his children by the time he dies; stating “Isn’t there an old adage that if you die a rich person, you’ve failed?”.
However, in a polar opposite to the stance being taken by Craig and other celebrities of late (Gordon Ramsey, Sting, George Lucas), my clients look to me for advice when cascading their wealth to the next generation…writes Mark O’Neill FPFS, Chartered Financial Planner and Director at True Bearing.
Protecting your assets from threats
My role as a SOLLA accredited later life adviser is to help clients protect assets from various threats, inheritance tax, funding future care fees, inflation and low interest rates amongst others. There has been a growing trend for clients requesting advice on “succession planning” to understand their options on how investments and other assets can benefit their families and loved ones after they are gone. Rather than wait until death, this can take the form of lifetime gifting strategies which gives parents the enjoyment of seeing the difference it makes to their children and grandchildren’s lives. This could be outright, or to employ trusts which control access and timing of gifts whilst also keeping them in the bloodline - an increasing occurrence due to rising divorce rates.
Common requests around Inheritance Tax Planning
Another common request is to help my clients to reduce their Inheritance Tax (IHT) liabilities. Gifts above the £3,000 annual allowance take 007 years (I couldn’t resist the James Bond reference) to be effective for IHT purposes. However, there is often a balance to be struck between reducing an estate via spending and perhaps gifting capital, yet retaining enough for future needs such as long-term care.
Often clients have said to me that they are planning on spending their wealth to live the retirement they dream of but would like to make sure that their home can be inherited by their children. When I dig deeper, it is rather the value of the home that they would like to safeguard which can be achieved using certain types of life assurance.
Is an inheritance more than just money?
Finally, I have long been a believer that leaving a valuable inheritance takes the form of passing on life skills, values and investing time in children rather than simply attaching a monetary value and viewing that as a job done. Perhaps various celebrities are also following suit, although regardless of the intentions of our clients at True Bearing, we are on hand to provide sound financial advice to help achieve their objectives.