Published on: 31st December 2019

The average age at which a child inherits from their parents is now 61

The "average" child may be financially secure with mortgage paid and a healthy pension. Alternatively, they may be struggling with debt and looking at working on into their seventies to supplement an inadequate pension ~ health permitting. Those in the latter category may be counting on an inheritance coming down from their parents. With the average age of a parent now in the early thirties this means that our "average" child inheriting at 61 has children who are in their late twenties or early thirties. The average age of a first-time buyer is now 33.

So who do you leave your estate to? Children or grandchildren? Do you know the state of your children's finances? Do you think they are financially comfortable when in reality they might be struggling? If you leave your estate to your children are you just giving them an extra Inheritance Tax liability? If your children live in an area where house prices are high are your children "bricks and mortar rich" but "cash poor"? If your children each have a different number of children and you wish to pass assets down to grandchildren what is fair? Do you give £n to be shared equally in each branch or do you give £nn to each grandchild? In the latter case the branch of the family where your child has the most children (your grandchildren) will benefit more than the branch with the least children. Would your generosity to your grandchildren cause friction between your children? What about the situation where one child is wealthy and another is not (perhaps through no fault of their own)? Every family is different and there is no one answer to fit every circumstance.

The above becomes even more complicated when stepchildren and thus step grandchildren are involved. Advice should be sought from a professional in these circumstances. More and more families are carrying out probate and estate administration themselves without taking professional advice. However, sometimes the cost of using a professional can be more than covered by inheritance tax savings that might save the intergenerational family substantially more than the cost of the professional advice. For example, a Deed of Variation can reroute a gift to children on to their children (the deceased's grandchildren) with no negative Inheritance Tax consequences. Casey & Associates can assist our clients to consider the options when they are alive with careful planning using Wills and possibly trusts. Casey & Associates works closely with financial advisors to ensure a "joined up" Estate and Financial Plan for clients. And when our client sadly passes away we can offer advice regarding a Deed of Variation and formalisation of testamentary trusts. Casey & Associates offers an intergenerational planning service to our clients and their families.

If you would like to meet one of our Consultants and discuss any of the issues raised in this article or any other Estate Planning topic, please telephone 01732 868190 or click here.

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