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Almost one in five won’t leave money to their children

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Written by: Emma Lunn
25/08/2021
Actor Daniel Craig says leaving an inheritance is ‘distasteful’ and that he won’t be leaving all his fortune to his children.

Research by Hargreaves Lansdown found that only 82% of people plan to leave their money to their offspring when they pass away.

About 7% plan to leave it to other family members, which includes guardians for youngsters, and those leaving it to grandchildren instead. One in 20 will leave it to charity, and another one in 20 said they want to spend it while they can.

Of those who choose not to leave most of their money to their offspring, the most common reasons are wanting to spend the money themselves and wanting them to make their own way in the world.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “It’s not just Daniel Craig: almost one in five people don’t plan to leave most of their money to their kids when they pass away. Some have made sensible planning decisions for the benefit of their whole family, while others simply want to enjoy the money while they’re still here. However, there’s a risk some parents are cutting their children off to solve problems that can be cured in far more effective ways.

“Leaving an inheritance to your kids hasn’t died off entirely. The vast majority of people want their children to benefit from the money they’ve managed to save during their lifetime, and even among those who are leaving money elsewhere, plenty of them are doing so in order to benefit their family another way.

“Some 7% say they’ll leave their money to friends and family, but not to their children. This is higher among younger people, aged 18 to 34, who are likely to have young families, so they may be leaving money to whoever is going to be looking after their kids. Others are leaving money direct to grandchildren, to help them make a start in adult life and avoid the risk of the money being subject to inheritance tax twice. Some respondents pointed out that their offspring didn’t need their money, and that they were already better off than their parents.”

Among those who don’t plan to leave anything to their children, a common theme was that they didn’t want to stand in the way of them making their own way in life, along with concerns about what they might do with the money, and the idea that somehow it would make their offspring hope for their death.

Coles added: “But leaving money to your kids can make an enormous difference to their finances for the rest of their lives, and there are other ways of tackling these concerns. You can avoid your children counting the days until your death by considering making gifts during your lifetime. This means they can have a legacy when it makes the most difference.”

You can give gifts of up to £3,000 a year which leave your estate immediately for inheritance tax purposes, or you can give gifts of any size, and as long as you live for seven years after handing the money over, it isn’t counted within inheritance tax calculations either.

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