Between the generations: How to look after your family as well as your finances

When putting together a financial plan, it often makes sense to consider the implications for other members of your family at the same time.

Many people are unsure of the value of their different assets, and how to manage them. Most parents find it difficult to discuss their wealth with their children and what will happen to it when they are no longer around. Whatever the reasons for this lack of communication, the failure to discuss and review your options, can result in having to pay unnecessary taxes, which can run the risk of reducing the value of your estate.

What is Intergenerational Planning?

Intergenerational planning is an important part of a financial plan if you have children and grandchildren who you want to continue to provide for. The term 'bank of Mum and Dad' was coined for a reason. There are so many things to consider when looking at intergenerational planning, from saving for your children's education, to setting up a savings plan for longer-term events, such as helping your kids onto the housing ladder.

We all want to enjoy helping our loved ones with the wealth we have accumulated when we are still around and see the difference it makes. Consequently, it is important to seek financial advice that will help set the right plans in place to manage your assets effectively. Advice and conversations around your plans and wishes can lead to a better understanding among family members regarding the family's hard earned wealth.

What can a financial adviser help with?

Even when there is open and regular communication amongst family members, there will always be some challenges that a family will not be able to deal with on their own. Having an understanding and objective third-party point of view can be useful, turning what could be potentially emotional discussions into pragmatic conversations. For example, having a Trustee can ensure your wealth is managed and distributed properly. If there are assets involved, a trustee, as a neutral party, can protect the beneficiaries over a longer period. They can also act as mediators over emotional attachments that family members may have over certain items - items that could eventually lead to litigation amongst the family.

At certain times in life, you may be asked for a loan by family members or feel the need to ask for one yourself. Is it a loan, or would it serve a better purpose as a gift (if, for example, you are trying to reduce your estate value for inheritance tax purposes?) If you are the one lending, what rate of interest has been agreed, (if any), and are you both clear on the repayment terms?

The importance of planning

By planning ahead, you are developing a clear goal for the direction of your wealth, in order that it can be sustained for future generations. Lacking a proper plan could result in wealth being lost to such things as taxes, poor investments and unprepared recipients of the wealth. There are many pitfalls you can avoid to make sure your hard work will last well beyond the next generation. Along with investing wisely and developing a good estate plan, educating the next generations is a crucial element in making the family wealth last.

How we can help

At McCrea Financial Services, we believe that planning should centre on ensuring the right amount of money goes to the right people at the right time. When it comes to gifts, there are certain barriers that can prevent you from giving everything that you would like. However, there are ways to overcome these, and we can explore them with you, in a way which meets with your overall aims and objectives.

To get in touch with the team and to find out more about how we can help with intergenerational planning and any other aspect of financial planning for the future, contact us for an initial free-of-charge meeting on 0141 572 1340 or email

You can also visit our website for information on our Trust Planning service here. Follow us on FacebookTwitter or LinkedIn for the latest news.