Many believe incoming changes to the UK’s divorce rules, along with pandemic pressures, will cause a spike in separations – and there are a great many wealth implications to consider.
According to the old adage, no matter what level of wealth a family has managed to build up, there is still a tendency for them to go “From shirtsleeves to shirtsleeves in three generations.
In a highly uncertain world, transferring wealth across the generations efficiently is more of a concern for families now than ever. But there are numerous risks that could ruin your chances of keeping as much money within your family as possible. Some are more prosaic, like the hefty Inheritance Tax bills that might be the result of not maintaining a well-considered, up-to-date will and taking proper estate planning and succession advice; others, like divorce or familial disputes over shared business interests are simultaneously more dramatic and more common than one might think. As the headlines continue to underscore, both are brutal destroyers of wealth – as many families sadly know to their (very great) cost.
Despite the best intentions of the first-generation creators of wealth, many families have seen their assets – and living standards – fall quite dramatically as a result of common money management mistakes.
We tackled Inheritance Tax mitigation strategies specifically as regards to property in another of our eBooks, IHT Planning and Property: Tips to Minimise Tax Before and After Inheritance. We have partnered with top law firm Mishcon de Reya to create am eBook that explores the essential steps families at all levels of wealth should take to guard against other big risks, including divorce and conflict over the family business.
Savvy families have rightly been looking at their wealth “in the round” since time immemorial as a way to use money more efficiently, enabling them to pool capital and minimise their tax obligations through well-established, perfectly legitimate strategies. But the more interlinked and complex a family’s finances become, the more care that needs to be taken in forward-planning and safeguarding their assets over the long term.
When it comes to wealth preservation and transferring it effectively across the generations, the key is the same as with all other elements of wealth management: take proper advice and get proactive as early as possible. Forewarned is forearmed.
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