Whether you’re preparing for the years ahead or actively passing on wealth to the next generation, it’s never too early, or too late, to ensure your financial plans reflect your values and wishes.
The ‘Great Wealth Transfer’
Over the next three decades, we’ll witness the largest intergenerational transfer of wealth in history as baby boomers pass on their assets. Analysts have dubbed it the ‘great wealth transfer,’ with trillions set to cascade down through families. However, with this handover comes complexity – both emotional and financial.
The intergenerational mismatch
A growing divide in attitudes to money could be influencing wealth transfer decisions. A third of baby boomers1 say they’re reluctant to pass on wealth to someone whose values around money differ from their own. Younger generations, especially Gen Z, tend to have a more short-term financial outlook, which can cause concern for older generations seeking reassurance that wealth will be respected and managed wisely. Researchers fear this disparity in attitudes could therefore impact older generations’ wealth transfer decisions.
The communication gap
Despite the scale of wealth involved, many wealthy individuals still hesitate to discuss financial planning with their families due to fears of family disagreements, with 10% avoiding the topic altogether and 27% finding it uncomfortable2.
However, this reluctance to have a discussion could lead to future misunderstandings, as family members may have unrealistic expectations about their inheritance. Only 12% of wealthy individuals said they regularly discuss financial plans with their family and 23% want to but struggle to start the conversation.
This difference in perception further highlights the need for open and realistic conversations.
Generational differences add to the tension
Nearly half of those under 353 said they expect to receive an inheritance, while 10% of those over 50 worry their family will be disappointed by their actual plans. Older generations are also more hesitant to talk about money, with 27% of those over 50 believing younger generations are more comfortable discussing financial matters.
Regional and financial pressures
The stress of managing wealth isn’t limited to inheritance alone. A separate survey4 found the top financial worries among affluent individuals include maintaining a certain lifestyle in later life, the performance of investments and potential tax liabilities.
Regional differences add another layer. In London, for example, 88% of wealthy individuals reported financial stress, with 20% saying they worry constantly. The East of England follows closely behind, with 85% experiencing similar concerns.
Options for wealth transfer
There are a range of ways to pass on wealth, including lifetime gifting or setting up trusts. Each comes with its own tax considerations and planning complexities, which is why sound financial advice is essential. For those in later life, this might also include simplifying financial arrangements or setting aside assets to help with future care needs. With the right support, you can make informed choices that reflect your goals and values.
Bridging the divide
Inheritance planning doesn’t need to cause conflict. In fact, it’s often the lack of communication that leads to confusion or disappointment. By engaging your family early and honestly, you can reduce the risk of future issues, support your loved ones with clarity and strengthen trust.
Open and honest discussions
Whatever your level of wealth, having open and honest discussions about money and inheritance could ease your financial stress, helping your family to avoid future disappointment and ensuring everyone understands the reasoning behind the financial decisions you make. While these conversations may be uncomfortable, they could help to reduce your financial stress in the long run as well as being essential for preventing shocks for your family.
Break the taboo and have open conversations with your loved ones about your financial circumstances and inheritance plans, allowing you and your family to take control and make necessary financial arrangements now that will help to ensure that you’re in good stead for the future.
It’s clear that open, honest conversations are crucial. Your financial planner can help bridge generational gaps by building relationships with your beneficiaries, supporting them with guidance and helping ensure your intentions are understood and followed.
1Aberdeen, 2&3Rathbones, 4Arbuthnot Latham[DM1] [CH2]
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning.
Third of ‘Boomers’ fear how young will spend inheritance
London has highest level of wealthy people worrying about money – FTAdviserHNWIs holding back from wealth planning due to fear of disagreements – Money Age
