Thinking about wealth and assets, it’s natural to think in terms of today: what you have, your ambitions for the future and ensuring you have enough set aside for a rainy day.

What’s equally important though, is protecting your wealth so that it can be passed on after your death – in whatever way feels right to you. Practically speaking, that might be making sure your spouse is financially looked after, providing for your children or grandchildren, or leaving assets to a partner, friends, charities or other beneficiaries.

Transferring wealth on 

With the Baby Boomer generation (those born between 1946 and 1965) having benefited from the more generous defined benefit pensions, the long term rise in stock markets and the acceleration in house prices over £300bn, this decade is set to see this wealth being passed on to Generation X (those born between 1966 and 1976).

Although this makes for a positive story, there are also many things to be concerned about for the Baby Boomer generation regarding the passing on of wealth to the next generation.

As life expectancy has increased, the cost of care in old age is a substantial one, with the wealthier Baby Boomers left to fund old age care themselves, which will diminish what can be passed on to the next generation.

Possible tax changes ahead 

With national debt having skyrocketed in the last year, we expect the Government to look to tweak the tax system to increase the tax take from this wealth, whether that be by increases to or changes in Inheritance Tax, Capital Gains Tax, property taxes such as Stamp Duty or newly talked about taxes such as a Wealth Tax.

Although Generation X have not had as many of the financial benefits as the Baby Boomers, for example with the advantageous defined benefits pension schemes coming to an end, stock markets and property prices are still rising, putting them in a good position to pass on wealth to Generation Y (those born between 1977 and 1994).

Key future life planning considerations 

The majority of our conversations at ZEDRA Estate Planning with the Baby Boomers and Generation X centre around a few topics:

  • How to make sure they have adequate financial resources in retirement and to look after themselves in their own home or if necessary, in an old people’s home or nursing home should the need arise;
  • How to ensure that their wishes are followed should they die or become incapable of making decisions due to ill health or an accident;
  • How to protect family wealth and pass it on to their family in the most efficient and beneficial way either during their lifetime or at death.
What next? 

Deciding how to transfer your wealth can be difficult. However, it is important to do so in order to protect and preserve it for future generations and we believe the first step in anyone’s financial plan should be to ensure they have a Will in place.

Preparing a Will means that your estate will be distributed as per your wishes, rather than per the rules of intestacy, which might be very different. A Will is also important to optimise your estate; you may be able to minimise the amount of Inheritance Tax payable by your estate, leaving more of your assets to your loved ones.

Contact us to find out how we can help you.