A recent study by the Skipton Financial Services indicated that children who are expecting to inherit their parents’ wealth could end up being very disappointed.
Whilst I’m sure most children don’t give a lot of thought to what they will receive when their parents die and tend to be more concerned with the here and now, the recent comments of entrepreneur and billionaire Bill Gates have certainly put it on the public agenda.
With the likes of Bill Gates openly admitting that he only intends to leave his children ‘some money’ so that they will ‘still need to work’ I wonder whether this will be ‘food for thought’ for parents when considering making wills.
The Skipton study showed that one in five of the 2000 people surveyed indicated that their children had already received their inheritance during their lifetime and one in four indicated that they will only leave just a percentage or none of their estate to their offspring because they ‘want them to stand on their own two feet’. Of course, there may be many reasons for this, such as children being wealthy or successful in their own right or because they feel that their grandchildren or other relatives are more in need of funds. The size of a parent’s estate may also be a consideration when deciding who should receive inheritance as may the tax implications of leaving funds to a particular person.
Surprisingly, almost half of those surveyed who were under the age of 40 admitted that they expect to receive a large inheritance for their parents. For many, the reality will be different, with only 75% of parents intending to leave their entire inheritance to their children.
Andrew Barker, managing director of mutually-owned financial advisory firm Skipton Financial Services, which commissioned the research, said: ”Traditionally your entire financial wealth and any assets would all be inherited by your children after your death but it seems this is becoming a thing of the past as people want to use the ‘would-be’ inheritance fund to enjoy their own well-earned retirement or even because they feel their children have already had their fair share.”
Andrew Barker added: “The other interesting thing our research found is that there is a perception that inheritance tax doesn’t affect most people so they won’t have to pay it when the time comes. Only four per cent correctly stated the £325,000 threshold an individual can have in assets before inheritance tax comes into play with one in four saying they had no idea at what point it was payable.”
If you are considering lifetime tax planning to protect your wealth for your family and would like guidance on this, or any other private client matter, please contact Clare King on 0113 336 3363 or alternatively via email at firstname.lastname@example.org
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