People dream occasionally, about inheriting millions from a long lost relative…
To pay off mortgages or debts accumulated. To fund school fees or to live the millionaire lifestyle.
But have you ever stopped to think about what you might be leaving your family? Mortgages and debts accumulated? Your millionaire lifestyle, or education about money?
Learning how to manage money well, might be the most useful inheritance for your kids.
Very wealthy families build and keep money through the generations. Yes the money helps, but passing on to the next generation the lessons they learnt growing up, is invaluable as the expertise builds up. Teaching how to make financial decisions, even introducing teenagers to the accountant, solicitor and financial adviser, it all helps.
This is even more important if you are the first generation in your family to make money. People rarely consider being the person with the millions to leave to the rest of the family!
What is your family’s culture?
Traditionally in Britain, the aim of the wealthy was to leave the estate in better condition than you inherited it. In a multicultural world, different cultures and faiths have
different ideas about inheritance – do you know your family’s views?
Modern life encourages us to live our dreams now and older people are raiding their savings and pensions to do just that. Add in the cost of care homes and people like Bill Gates giving away large parts of their fortunes to charity. There may not be as much as you hoped for and inheriting your share might not be as guaranteed, as
previous generations.
Is it our money to enjoy or do we have a family responsibility?
An interesting question to consider – with many different viewpoints.Even more popular now, is helping out adult children with home deposits and education, while you are all alive to benefit from the money. Particularly as one might be waiting until you are over 70 to inherit these days.
97% of people know the children are expecting to receive an inheritance, but 95% of them think they need to become more responsible for their own future.
Skipton Building Society 2016.
Practical Information
See an inheritance tax specialist if you are planning to leave or inherit an estate worth more than £325,000. Over this amount, the estate pays 40% tax prior to the money being distributed.
If you receive an inheritance, you won’t have to pay tax on it, unless you sell something, like shares or a property. Then you will pay the usual capital gains tax at the prevailing tax rates.
What to do with your inheritance?
Do nothing. Wait and consider both wild and sensible options before committing your, possibly, once-in-a-lifetime amount of money.
Consider this money in the context of your whole life.
If you have already spent it, the only option is to forgive yourself and learn more about money.
Or as James E McWinney says:
“Splurge thoughtfully”
To create a new story about money, book an appointment with Jenny Bracelin, Business and Money Coach at www.jennybracelin.co.uk