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Discussing inheritance is too important to be left until someone has died

We Need to Talk About Inheritance

With inherited wealth set to double in the next 20 years, it’s time to get over the awkwardness and have the conversation now.

This will be one of the most uncormfotable conversations you will ever have with your family. But sadly, it’s more important than ever to discuss inheritance.

According to the Resolution Foundation, it’s becoming painfully clear that the 20th Century trend of each generation being better off than the last has gone sharply into reverse. “Millennials”, born between 1981 and 2000, are far behind the economic milestones their empty-nester parents and baby-boomer grandparents had reached by the same age.  

Millennials are half as likely to own their own home by age thirty as their baby-boomer grandparents were. And empty-nesters, born after 1955, generally have an awful lot less capital to fall back on, in the form of home equity, pensions and savings, than their baby-boomer parents. 

It’s down the usual factors: soaring house prices keeping the younger generations off the property ladder, and the steady demise of the job for life and the workplace pension. And it means that, for many of us, inheritance – drily termed “intergenerational wealth” by the Resolution Foundation – is set to grow in significance as a buffer against a bleakly impoverished old age.

There is a light at the end of the tunnel for baby boomers and empty nesters alike. Wealth passing down the generations through inheritance is growing noticeably, and current trends suggest that the total value of inheritance is likely to double by 2035, as baby-boomers progress through old age to the end of their lifespans.

Why Talk About It?

If inherited wealth is set to double, why not just keep calm & carry on, safe in the knowledge that an inheritance will eventually save the day? Because it’s not as straightforward as that.

There’s the spectre of the “Dementia Tax” to contend with for a start. With the annual cost of a care home place averaging £40,000, a few years in care can wipe out the chance of a much-needed inheritance lifeline. But a properly considered estate plan can limit the damage considerably.

And modern families are complicated. People are marrying more than once, or not at all, and new blended families of every conceivable variety are created every day. But the problem is that inheritance law – especially the “intestacy rules” that determine how assets are inherited without a Will -  have barely attempted to keep up.

Inheritance rules are so complex and lacking in transparency that it’s all too easy for your intended heirs to end up losing out. Stuart Herd’s story is case in point. Going to your grave without a properly considered estate plan is like playing Russian roulette with your family’s financial security.

Talking to your Kids about Inheritance

Your adult children may not want to hear about your plans to take care of them when you’re gone. Comfortable as you may feel about your own mortality, your kids won’t want to face the thought of losing you. And the idea of profiting from your death will be anathema to them.

If your children respond with a shudder and a swift change of subject, back off for now and come back to the subject another time – several times if necessary. Break it down into little snippets of information you can relay to them as and when they’re ready to hear it.

Meanwhile, you don’t need your children’s involvement to create a robust estate plan, but you do need guidance so that you can make informed decisions. So, take the first step and seek advice from an estate planner you trust.

For our help with taking that first step, call us on 0151 601 5399 or complete the contact form below.

"I decided to get advice about making my will because I was about to travel abroad with my children for the first time in many years. My financial advisor recommended Will Written. I appreciated being able to have a consultation at home, so that I could discuss my situation in confidence. I was able to ask wide-ranging questions and Gina’s knowledge and expertise were reassuring. An estate plan was created for me that exactly suited my needs, resources, family and dependents. I have the peace of mind of having made a will that ensures my assets are safely passed to my children at the end of my life. I also have added protection if I become ill or disabled, because I have made a Lasting Power of Attorney appointing my best friend to manage my affairs if I lose the ability to manage them for myself. "

Christine J

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