‘PRE-INHERITANCE’ GAINING PROMINENCE
Issues relating to intergenerational wealth and the growing need to provide financial assistance to the younger generation have become a recurring theme in today’s society and, with so many people now benefiting from inheritance pay-outs, this has inevitably led to more and more family conversations about ‘pre-inheritance’.
The scale of inheritance
According to a recent study conducted by Key, 11.6 million people in the UK received an inheritance at some point during the past ten years. More than half of these were left money by their parents, with grandparents the next most likely source followed by uncles or aunts, family friends, cousins and siblings. Interestingly, the average age for someone to receive an inheritance was 47.
Right time of life?
For many people, inheritance can involve substantial, potentially life-changing sums of money, especially when property is involved. However, the idea of inheritance arguably works best when a beneficiary receives support when their financial need is greatest. By the time most people receive an inheritance though, they have typically already built up a sizeable stock of assets themselves.
Providing a helping hand
As a result, the idea of ‘pre-inheritance’ is gaining traction. Early inheritance gifts enable people to provide a cash injection at a time when their support is most needed. In addition, ‘pre-inheritance’ provides the person making the gift with an opportunity to witness the impact their generosity has on a loved one’s life.
Sound advice is key
Before making an early inheritance gift though, it is vital to fully consider all of the consequences, particularly in relation to your own financial situation. Understanding any potential tax implications, especially relating to Inheritance Tax, is also clearly paramount. Given the complexities involved, it is therefore essential to seek professional financial advice prior to taking any actions.