The so-called “great wealth transfer” is well underway, with an expected £5.5 trillion set to pass between generations in the next 30 years. Recent research though, suggests that the transfer of wealth might not run smoothly.

According to Professional Adviser, 32% of baby boomers are reluctant to pass their wealth to someone with a different attitude to money.

Perceived views on spending and wealth accumulation between generations could lead to complications in the decades to come. Expert financial advice, and open communication, could be key to preventing conflict.

Keep reading to find out how your clients could be affected and what Boolers can do to help.

9 in 10 people plan to pass their wealth on to loved ones

Having spent an entire career accumulating wealth and building an estate, it is only right that your clients choose what to do with their money.

A will is an obvious way to decide who their estate passes to, but many might also want a say in how that money is spent.

Professional Adviser reports that 90% of people plan to pass money to loved ones. While 51% plan to gift a living inheritance, 39% plan to pass on their wealth when they die.

When choosing who should inherit their money, nearly a third of baby boomers are going to have some tough decisions to make.

Attitudes to money vary between individuals and generations

Our attitudes to money are largely formed when we are young. The amount of money we grew up with, the spending habits of our parents, and myriad external factors will all play a part in how we perceive wealth as adults.

While our personal circumstances might change, our attitudes are likely to remain hardwired.

Younger generations are growing up in a post-global financial crisis world, with easy access to money and investment apps, with so-called “advice” available on social media 24/7.

Generation Z will understandably have different attitudes to money than their baby boomer parents and grandparents, who might have been taught to save from a young age and could even have experienced rationing in their youth.

Reports suggest that this disparity is real. While Generation Z is more likely to prioritise spending now (39%), just 22% of baby boomers answered likewise.

Your clients in their late-50s accumulated their wealth over decades, sacrificing spending in the present to pay for their future selves. This group may be unwilling to see their hard-earned money frittered away by the instant gratification favoured by the next generation.

Intergenerational planning and open communication are key

Kings Court Trust, in association with the Centre for Economics and Business Research (CEBR), confirm that wealth transfers are set to grow to £100 billion by 2025, and to £355 billion by 2047.

These are huge sums of money, potentially passing into the hands of a younger generation ill-equipped to manage such an influx of wealth.

Intergenerational planning, and cross-generational advice, are key.

At Boolers, building and nurturing ongoing relationships is integral to how we offer advice and manage our clients’ long-term plans. That might mean managing multiple generations of the same family.

In this way, we can encourage honest communication about estate planning, helping to avoid potential future conflicts. We can also pass on our knowledge, whether through educating younger generations or empowering older generations to pass on their own financial lessons.

Bespoke financial advice could help find the right solution for your clients

Managing an estate isn’t easy. Tax implications, the possibility of disputes, and unexpected shocks can all alter how wealth is transferred, and when.

Trusts, or stipulations in a will, can be used to assert some degree of control over how an inheritance on death is spent. “Giving while living” might be an option too.

The number of people choosing to give a living inheritance is growing. Financial advice could help your clients to choose the best way to financially support the next generation – through tax-efficient gifting, for example. This has the benefit that the older generations will still be around to offer guidance and see the joy their money brings.

Get in touch

Financial education will always be key when receiving an inheritance. And with trillions set to change hands over the next few decades, this will be more important than ever.

If you have any clients who could benefit from estate planning assistance, or who have questions about any other aspect of their long-term financial plans, please get in touch. Email or call 0116 240 7070.

Please note

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.