Daily Mail – Bank of Mom and Dad wants to keep tabs on inheritance: Parents keen to have say on how money they leave to offspring is spent

Enjoy this article from Daily Mail:

6a01b8d0a6271d970c01b7c7cc7927970b-500pi“Parents across the UK want to control how the cash they bestow is spent by their children, a new survey suggests.

A report from insurer Prudential finds that 77 per cent of over-55s have indicated that they want to have some control of how their legacy is spent. Rising property prices and pension wealth mean that many of the baby boomer generation plan to pass on significant assets to their heirs.

The data highlights about 30 per cent who say they don’t want their wealth to be squandered by their children, and the same number want to ensure that grandchildren benefit from an inheritance.

Estates liable for inheritance tax in the UK face an average bill of nearly £175,000 each – but more than 67 per cent of over-55s are unaware of this.

Despite more than a third of over-55s being concerned about having to pay inheritance tax on their estate, 19 per cent have actually taken action to reduce their potential tax bill. A tax expert at Prudential, Les Cameron said: ‘Record house prices are one reason why inheritance tax (IHT) receipts are rising fast.

Les Cameron advises: ‘Reducing inheritance tax bills is relatively straightforward.

People need to strike the right balance between giving their wealth away during their lifetime to reduce the size of their estate, and maintaining some form of control after their death over who can access it and when.

Just over 25 per cent of parents are concerned that part of an inheritance could end up being given to spouses of their children in the event of a divorce and want to stop family money being lost as a consequence.

Les Cameron understands why it is a concern:

 ‘With two in five marriages ending in divorce, it is easy to see why the problem of keeping wealth within their family is a growing concern for the bank of mum and dad when they’re planning to leave money to children and grandchildren.

‘To help ensure efficient inheritance tax planning, obtaining financial and legal advice should be money well spent.’

13 per cent have already sought, or intend to seek, financial and legal advice to help ensure that their legacy is used wisely The report discovered fewer than nine per cent are seeking financial advice, making gifts to family members and/or setting up trusts.

Les Cameron suggests planning ahead is a keen concern – ‘To help ensure efficient inheritance tax planning, obtaining financial and legal advice should be money well spent.'”