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Careful planning can ease concerns surrounding family inheritance says Martin Cuthbert, regional head of the wealth and investment management division of Barclays Leeds
In our experience, the issue of inheritance planning and passing on wealth can be a thorny subject for many families, and family-run businesses in particular.
Succession planning is one area of modern financial transactions that is often opaque, with many people reluctant to talk openly about the details of what they will leave behind when they are gone, or discuss what they are likely to inherit from loved ones.
Although being able to provide for the financial needs of surviving relatives is a special kind of gift, it can also be extremely challenging, not just because of the technical complexity of making appropriate arrangements, but also because of the hard choices about how to divide wealth.
Our Wealth Advisory team which explains and advises around the various inheritance options has seen amongst our clients that there are many factors that individuals take into account when considering succession planning. These include family expectations, the sacrifices and contributions that family members have made, and even with whom they have had better relationships with.
We also find that there is a degree of anxiety amongst wealthy individuals in passing on their wealth despite the age-old adage of you cant take it with you. Research published last year by the wealth and investment management division of Barclays on this subject found that when it comes to succession planning a third of Yorkshires high net worth individuals do not trust their children and stepchildren to protect their inheritance.
Although this is somewhat below the UK average of 40 per cent of wealthy individuals mistrusting their offspring, the fact that a third of high net worth people in Yorkshire harbour these concerns shows that wealthy individuals in this region might benefit from careful advice around inheritance planning.
Experts have partly attributed this lack of trust in the future generation to the changing structure of many UK families. As second and third marriages become more common, this is thought to lead to more complex relationships with both children and stepchildren in relation to wealth and inheritance planning, which further underlines the importance of seeking advice in these matters.
It is clear that with wealth comes an increasing complexity of choice, and in some cases this can result in concerns about trust and conflict when considering the intergenerational transfer of wealth.
Through working closely with our clients professional advisers, we stress that understanding in advance the options for succession planning, and seeking advice from solicitors and accountants, as well as wealth advisors, can help address these fears and provide confidence that your wealth will be wisely managed in the future.