Keep your wealth in the family with smart inheritance planning
Despite the fact we all know how important inheritance is in determining a person’s future wealth, the bulk of people simple brush it to one side (all except the very wealthiest, which should tell you something!).
Leaving your inheritance to chance by leaving just a basic Will in place or, worse, not even writing a will at all, is an easy way of allowing the wealth in your family drain out over just a couple of generations.
It’s a bit like opening your wallet and asking the courts and the tax collector to come in and help themselves before throwing the remaining coins on the ground for your family to fight over.
So, what is right way to approach smart inheritance planning?
The clue is in the name. Planning, good sensible planning, is the cornerstone of all smart wealth retention. What’s the best way to do this? Make sure you insert Trusts in your Will .
A Trust is a legal vehicle that is created through your Will to control how your family wealth is managed after your death.
There are many types of Trusts you can use, and they can all ensure that procedures are in place to prevent bad financial decision making after your death.
· You can ensure that your assets stay with your children in the event of your spouse remarrying.
· You can appoint trustees who will have the power to make decisions on behalf of a vulnerable beneficiary, ensuring that the money you leave for them isn’t squandered or lost.
· You can place a property in Trust so that it can be enjoyed by the family without ever being exposed to dangers such as an individuals’ divorce, bankruptcy or long-term care fees.
There are many more Trusts you can use depending on your circumstances. The key is to sit down with an inheritance specialist and work out what the right ones are for you.
Creating the right family culture
One of the most positive aspects of this is that it brings families together to discuss these important financial issues rather than simply sweeping them under the carpet. Something far too many people do.
As trustees they will be obligated to hold an annual meeting to discuss the Trust and make financial decisions for the year ahead. And this is always done under the guidance of a qualified financial adviser who can make sensible recommendations and anticipate any problems that may lay ahead – such as changes to inheritance laws.
Establishing a transparent and forward-thinking culture can be a great thing for a family. Not just because it protects finances but because it gives everyone a stake in their future and teaches them the value of good financial hygiene.
Here at Hillman Legal we have been advising families on Trusts for well over a decade and strongly recommend their use as a sensible and responsible financial strategy.