The beginning of the end for the traditional inheritance? - Palmers Solicitors

The beginning of the end for the traditional inheritance?

Recent data from the Office for National Statistics (ONS) revealed that between 2008-2010 around 1.6 million adults accepted an inheritance of at least £1,000, with half receiving less than £10,000 and only one in ten receiving £125,000 or more

However, the data suggests an increasing number of people are giving assets away during their lifetime, whether to assist the younger generation to get on the property ladder, in an attempt to avoid inheritance tax or long term care fees, or for some other purpose. This, together with the increasing cost of living and rising care costs, is reducing the assets which might otherwise have been left to beneficiaries on death.

Careful consideration is required when giving assets to others during your lifetime. Whilst gifting can play an important role in reducing tax liabilities and protecting assets for the next generation, the rules surrounding both inheritance tax and care fees are much misunderstood. Action taken without specialist advice may well fail to solve the perceived problems and, in some instances, worsen the overall position.

Disputes are also on the increase. It is unusual for the intentions of the parties in family transactions to be clearly recorded at the outset and disputes can arise over whether monies were gifted or loaned, or whether it was in fact intended that the person who provided the monies should have an interest in the assets purchased with the same.

With our vulnerability increasing and mental capacity declining as we live for longer, gifts are being challenged by other family members and the courts are increasingly inclined to set gifts aside in the absence of clear evidence that the person making the gift received independent, professional advice on the implications of the same.

Problems can also arise due to a change in circumstances – e.g. monies given to others can be at risk if the recipient faces divorce or bankruptcy and may pass to others who you would not wish to benefit in the event of the recipient’s death.

Whatever plans you have to use your wealth to assist others, whether on your death or during your lifetime, it is sensible to seek professional advice in order to ensure that you consider all relevant implications and proceed in a way which best meets your intentions.

At Palmers, our experts can provide specialist advice and guidance to individuals regarding the making of provision for others and the protection of their wealth and assets.

For more information, please visit our website or contact our wills and probate department.