Financial issues to discuss with your family

Inheritance and estate planning
Views & insights

Money is a difficult subject to discuss with family, but an open conversation could improve your loved ones’ future finances


24 October 2023 | 3 minute read

Money is a notoriously difficult subject to discuss with family. Yet your family’s finances could be woven together more tightly than you realise. Having an honest conversation could open up financial planning opportunities and improve your loved ones’ future finances. The sooner you talk about money, the better your chances are of protecting your legacy and boosting your children’s financial security.

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Learn more about estate planning, and how writing a will, lifetime gifting and managing your IHT liability can help you and your loved ones in our comprehensive guide.

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 Here, we consider some potential topics.

1. Your estate

Inheritance is a hugely emotive subject. Yet while it might seem morbid to discuss who will inherit a portion of your estate after you have passed away, doing so could prevent future difficulties or disagreements. You can explain what your plans are and why you have made certain decisions.

This could also provide an opportunity to consider if your will needs updating. For example, you might need to amend your will to ensure your estate can benefit from the residence nil-rate band, which could reduce your estate’s inheritance tax (IHT) bill.

2. Lifetime gifting

Although you’ll want to avoid giving away money that you might need in the future – towards care costs, for example – you might wish to consider passing on some wealth to future generations within your lifetime.

Making use of pensions, trusts and life assurance are just some of the ways you can do this. This can be complicated, but we can work with you to give you peace of mind that you’ve laid the firmest foundation for your family’s future.

It’s possible to gift tax efficiently during your lifetime using various allowances and exemptions. Examples include:

  • You can give away up to £3,000 per year free from IHT;
  • You can also make small gifts of up to £250 per person per tax year;
  • You may make further tax-free gifts such as potentially exempt transfers (PETs), which become exempt from IHT if you live for at least a further seven years after making the gift.

3. Power of attorney

Dealing with a deterioration in mental capacity can be particularly tough on your family. If you are no longer capable of making decisions for yourself, you’ll want to ensure someone you trust is legally in this position.

You can put in place a power of attorney, which is a legal document enabling you to name one or more people to look after your affairs if you lose capacity.

Without this document, an application must be made to the Court of Protection (the sheriff court in Scotland), which can be a complex, costly and lengthy process for your loved ones.

4. Complete a financial factsheet

Discuss where you’ll safely leave basic details of your bank accounts, savings, investment and utility providers. Compiling a list of these is time well spent. This could be invaluable to your family in the event you lose capacity or pass away. RBC Brewin Dolphin offers a useful document which you can complete and store yourself or give to a relative.

Talking to your family about inheritance might seem difficult, but we can help start the conversation and guide you through what may be an emotional process. We’ll build a succession plan that suits your individual needs, so you can rest assured you’ve laid the firmest foundations for your family’s future.

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The value of investments, and any income from them, can fall and you may get back less than you invested. This does not constitute tax or legal advice. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Information is provided only as an example and is not a recommendation to pursue a particular strategy.

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