Any discussions involving money can be uncomfortable and particularly so when it involves the transfer of wealth from one generation to the next. However, the next 30 years are expected to see the largest ever intergenerational passing of wealth, as Baby Boomers pass on assets to their heirs.
Baby Boomers have been the wealthiest generation in history and the so-called ‘Great Wealth Transfer’ is estimated1 to be a colossal £5.5tn, so it could be a good time to start a family discussion.
A taboo subject
Financial matters remain one of the few remaining taboo subjects for many families. How can you start the conversation and avoid it being stilted or awkward? Despite the difficulties, it’s vitally important for parents to involve their offspring in financial planning decisions if the wealth transfer process is to be successful.
Finding a balance
It can be challenging to find the right balance, between a desire to leave a significant inheritance, whilst ensuring your own financial wellbeing is taken care of – the unknown future cost of long-term care is one important consideration here. In addition, although helping your child financially may be important to you, you would probably not want to dampen their own work ethic.
A family discussion
Encouraging your children to become involved in financial planning discussions about family assets is a good way to boost their financial literacy and ensure they are ready when the time comes. We can help you start those conversations by including them in the family’s financial planning, so introduce them to us.
1 KC Trust, 2018