Recent research by Investec Investment & Wealth suggests that 30% of adults are unwilling to pass their money on to their children in case they get divorced and the money leaves the family.
We have heard people telling us this for many years. With the divorce rate in England at around 42%, it might be worth considering which of your children is most likely to divorce, because on average one of them probably will. If you have left them money, let’s hope they have a better solicitor than their spouse.
The research goes further to claim that 14% thought that an inheritance might reduce their children’s incentive to work hard, with other respondents having little faith in their children’s ability to manage money.
The good news is that are ways to protect an inheritance from divorce or misuse and to prevent it from acting as disincentive to work. When making your Will it is important to consider leaving assets into a Discretionary Trust, or setting one up during your lifetime. Because there are a range of beneficiaries, if managed by the right people in the way these trusts my help to keep assets out of the clutches of divorce lawyers as it is difficult to argue that the money in the trust belongs to one particular person. The money can also be held within the trust and drip-fed to beneficiaries rather than them receiving a huge lump sum. If you really think your children cannot manage their money (although they often can with good advice), by leaving it in trust you can appoint someone else to manage it for them.
While you should always seek professional advice before setting up any kind of trust, it just goes to show that receiving professional advice when making a Will ensures that you are fully aware of all of your options.
Give us a call on 01473 358195 for an initial discussion in the comfort of your own home with no obligation or CLICK HERE for more information about creating a trust.
Stephen Wilkes
Head of Estate Planning
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