Estate planning, and the best way to approach it, has attracted considerable attention recently, and rightly so. With Inheritance Tax (IHT) thresholds frozen once again at the most recent Budget, and pensions due to fall inside estates for IHT purposes from April 2027, more families than ever are likely to fall within its scope. Annual IHT receipts are projected to rise significantly from around £8.7 billion in the 2025/26 tax year to approximately £14.5 billion by 2030/31. (Inheritance Tax Receipts are rising, and set to accelerate further)
This evolving IHT landscape makes it more important than ever to consider intergenerational wealth planning. At Taylor Money, we partner successfully with many families to proactively monitor our clients’ potential liabilities, initiate the right conversations, and provide tailored recommendations to help protect family wealth for future generations.
Why Family Involvement Matters
When managing wealth, the focus in the early years is often on tax efficiency, investment returns, and retirement security. As time goes on, however, estate planning becomes more relevant, and attention often shifts towards reducing the impact of IHT and passing on wealth as tax efficiently as possible to the next generation.
However, one crucial element often gets overlooked: family involvement. Intergenerational wealth planning is not solely about limiting Inheritance Tax, it is about ensuring your loved ones are prepared, informed, and confident to make decisions themselves when the time comes.
Too often, beneficiaries inherit significant wealth without the knowledge or confidence to manage it effectively. This can lead to stress, poor choices, and even family disputes, potentially undoing years of careful planning.
By involving your family early, you can:
- Reduce confusion and anxiety when health changes hands.
- Preserve family values and ensure your legacy supports shared goals.
- Equip your loved ones with the knowledge, skills and confidence to achieve their short and long-term objectives.
Wealth & Spouses
While current legislation allows a person’s estate to pass to their spouse entirely inheritance tax-free, it is important to give some thought to the practical implications of this. In our experience, one spouse naturally takes the lead in the family’s financial affairs. When a bereavement occurs, the surviving spouse may suddenly find themselves making decisions they do not yet have the experience or confidence to handle. At an already difficult time, this can feel overwhelming and can increase the risk of financial stress, uncertainty, and sub-optimal decision-making.
Including your spouse early in planning discussions with your wealth manager can make a meaningful difference, both financially and emotionally. This shared understanding provides clarity and, arguably, more importantly, confidence to navigate an already stressful time. It also minimises the possibility of disruption, allowing your long-term plans to continue supporting your family in the way you both intended.
Practical Steps to Get Started
- Start the conversation early: Invite spouses, adult children, or key beneficiaries to planning meetings with your wealth manager.
- Establish a relationship with wealth managers early: Although your beneficiaries may choose their own wealth manager, having a pre-existing relationship may increase the likelihood of them obtaining their own advice when wealth is inherited or gifted as part of intergenerational planning.
- Include other professionals where appropriate: Joint meetings with your wealth manager and other professionals, such as your solicitor or accountant, can ensure that estate planning, tax planning, and legal arrangements are aligned and fully understood by all parties.
- Document intentions clearly: Wills, trusts, and letters of wishes should be up to date and regularly reviewed.
- Educate beneficiaries: Explain how assets work and what to expect from your estate, and how that can be managed effectively once the wealth is transferred.
- Plan for liquidity: Ensure funds are available for inheritance tax and living costs.
Summary
When done well, intergenerational planning creates peace of mind for you, your spouse, and your beneficiaries. It fosters family harmony and offers proper protection of your legacy. By including your loved ones in the process, you can give them clarity and confidence for the future. Whilst we understand discussing personal matters can be uncomfortable or challenging for some families, giving some consideration to this concept will likely provide long-term benefit to your family for years to come.
If you would like to explore how to involve your family in your financial planning, please reach out to your wealth manager.
Written by Sophie Hendy
