Succession Planning – What Happens Next?
The number of people aged over 75 in the UK will almost double to nearly 10 million by 2040.
A recent study by the Institute of Fiscal Studies has found that 44% of elderly households expected to leave an inheritance of £150,000 or more. This is compared to only 24% in 2003.
Will this increasing trend diminish as more people live into their 90s and need care, leaving less wealth to be inherited, but want to protect their assets.
A separate study published by the Resolution Foundation has found that the amount of money passed on through inheritance each year has doubled over the past 20 years and is probably going to double again in the next 20 years.
The issues here are how to protect capital for future care costs and yet at the same time ensure that any potential inheritances are left with some certainty of who the funds or assets will end up with.
Home ownership rates increased rapidly for people born before, during and after the Second World War, peaking at around 75% among the baby boomers born between 1946 and 1965. This group now hold more than half of all the wealth in Britain.
Nearly two thirds of people aged between 20 and 35 have parents who own their own home. Therefore, they might expect to inherit a share of the property value in the future.
However, millennials’ inheritances will not be evenly distributed. Researchers suggest that more than 80% of millennials who already own their own home have parents who are home owners, compared with less than half of non-home owning millennials. The haves and the have nots.
It would appear that our national debate and public policy have a long way to go to catch up with the fact that wealth and inheritance have grown significantly as features of modern Britain.
The big question for many people is what is their succession plan? …….. What happens next?
Many of our clients are considering using a family trust or investment company for some asset protection, certainty of succession and tax planning.
If you would like more information about setting up trusts and companies, please download our case studies below or get in touch with Daine McCormick today.
Download our useful case study on the use of Family Investment Companies as a trust alternative.
|Date:||16th September 2016|
|Date:||2nd May 2018|