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Get The Next Generation Ready For Inter-Generational Wealth Transfer


There’s a huge intergenerational wealth transfer brewing, as baby boomers start to think about passing on their assets. Private Client Director, Luke Ashton, from our partners at Brooks Macdonald shows you how you can get ready for the handover. And with priorities shifting across the generations, it should be interesting.


Why Is Inter-Generational Wealth Transfer Such A Hot Topic Right Now?

The baby boomer generation hold a lot of wealth in this country, and they’re getting older.


Inheritance tax has always been a hot topic, and following the announcement in the last autumn statement that the threshold where it kicks in has been frozen until 2028, it’s now an even hotter topic. My colleague Leanne Harvey talks more about inheritance tax in her article on estate planning.


Also, given the current financial climate, transferring wealth is one of many financial milestones that can seem more complex than it did before.


What’s The Best Way To Introduce The Next Generation To Money Management?

Education and support are crucial, so start them young. Children can learn by managing pocket and birthday money, balancing spending with saving. Set a good example and get them involved with savings accounts and Junior ISAs.


We encourage our clients to involve their adult family in our financial review meetings, particularly as they prepare to pass their wealth on. It’s a great way for the younger generation to become familiar with their family finances.


How Can I Encourage The Next Generation To Value Money They Inherit?

It’s good to foster an appreciation of family money and how it was achieved. Talk about where the money comes from and get children to spend time around the business, the properties or the work environment.


When passing on wealth, it’s not unusual to have concerns about how it may be spent. We can help address these concerns by putting a nominal amount in an investment account for each child, or by setting up a philanthropic trust.


Another big worry is that family wealth will be lost through divorce. We can make sure your money goes where you want it to, with various options for appropriate trusts - perhaps to pay for grandchildren’s education.


What Else Can I Do To Ensure A Smooth Transition?

Be organised and keep clear records in a suitable place where the right people know where to find them. Sorting out an estate is really time consuming and difficult, especially for someone who is grieving. If you have your affairs in order, your family will be in a good place to move forward.


Write a will and set up power of attorney, so that someone else is able to organise your affairs for you, if you are unable to. Take professional advice – not just from a wealth manager, but also from accountants and/or solicitors. Professional advisers can provide continuity and some helpful handholding.


Gauge your heirs’ interests and capabilities – for example, will they take over the business or would it be wiser to sell in advance? Most people give away wealth when it feels right for a number of reasons. They think the person they’re giving it to is in a good place financially, with a good understanding and the right attitude to working and spending.


But, even if your children are in the right place, are you? Take some time to mentally prepare yourself to hand over control.


It’s natural to worry about the future, and particularly the next generation, but there’s a lot you can do to ease the way. Some thoughtful preparation can make all the difference for a smooth financial transition.

If you’re looking for help from a financial professional, get in touch for a free, impartial conversation by emailing the team at Brooks Macdonald on pc@brooksmacdonald.com or visit their website here


Important information - Investors should be aware that the price of investments and the income from them can go down as well as up and that neither is guaranteed. Investors may not get back the amount invested. Past performance is not a reliable indicator of future results. Changes in rates of exchange may have an adverse effect on the value, price or income of an investment. Tax treatment depends on individual circumstances and may be subject to change in the future, so you should seek independent tax advice, as to your own position. The information in this article does not constitute advice or a recommendation and you should not make any investment decisions on the basis of it.


Brooks Macdonald is a trading name of Brooks Macdonald Group plc used by various companies in the Brooks Macdonald group of companies. Brooks Macdonald Group plc is registered in England No 04402058. Registered office: 21 Lombard Street, London EC3V 9AH.


Brooks Macdonald Asset Management Limited is authorised and regulated by the Financial Conduct Authority. Registered in England No 03417519. Registered office: 21 Lombard Street, London EC3V 9AH.


Brooks Macdonald International is a trading name of Brooks Macdonald Asset Management (International) Limited. Brooks Macdonald Asset Management (International) Limited is licensed and regulated by the Jersey Financial Services Commission. Its Guernsey branch is licensed and regulated by the Guernsey Financial Services Commission and its Isle of Man branch is licensed and regulated by the Isle of Man Financial Services Authority. In respect of services provided in the Republic of South Africa, Brooks Macdonald Asset Management (International) Limited is an authorised Financial Services Provider regulated by the South African Financial Sector Conduct Authority. Registered in Jersey No 143275. Registered office: 5 Anley Street, St Helier, Jersey JE2 3QE.


More information about the Brooks Macdonald Group can be found at www.brooksmacdonald.com



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