Third Of Wealthier Individuals To Pass Down Inheritance - Report

Robbie Lawther

27 July 2017

Just under a third, around 31 per cent, of wealthier individuals plan to pass on their wealth to their children during their lifetimes, according to research by .

The study by Lloyds, who surveyed 500 wealthy individuals (parents with assets over £250k, including pensions) across the UK, examined trends around inheritance, attitudes to money and family businesses.

It also revealed wealthier families will set aside almost three quarters (72 per cent) of their financial assets as an inheritance to go to the next generation, either before or after death, with exactly half of those surveyed aiming to give their children more than 90 per cent of their money and assets.

Those with assets over £1 million ($1.3 million) are the most generous, and will leave a higher proportion of their wealth to the next generation. Millionaires aim to leave 75 per cent of their financial assets to their children and over half (57 per cent) will pass on more than 90 per cent of their wealth to their children.

“We are seeing a growing trend of wealthier families beginning to spread their assets across the generations whilst they are still alive,” said Jon Wingent, wealth investment officer at Lloyds Private Bank. “Anyone thinking of doing this needs to consider a myriad of factors, including whether there is any tax due at the time of the gift and then further down the line on death. In addition to this, they will need to figure out the best way to pass on any wealth. An absolute gift is sometimes the simplest approach, but many families choose a trust arrangement which allows the older generation to retain an element of control for a period of time.”

Transferring Wealth

Inheritance can be passed on through a number of ways, with cash being the most common before death (23 per cent). Cash was also most common both before and after (48 per cent). Property was the most common to be transferred after death by respondents, which stood at 77 per cent, followed by other investment (stocks and shares) which was recorded at 57 per cent.

Instinct

When it comes to deciding how to transfer their estates to the next generations, half (49 per cent) of parents planning to transfer wealth to their children rely on their instincts and do what they feel is right for the family. Over a third (36 per cent) uses their own research to make up their mind, while 11 per cent follow the same route as their parents before them. Those with assets above £1 million are most likely to seek professional financial advice (41 per cent compared to 36 per cent overall).