Over the last six months, Coronavirus has focussed minds on how wealth will be passed to the next generation. We are increasingly seeing clients contact us to get their financial affairs in order, primarily as a result of priorities and financial situations having changed for many families. The fear of increasing taxes to cover the cost of pandemic measures is also driving behaviour.
Younger generations, who stand to be hit hardest by the crisis, may need to call on the “Bank of Mum and Dad” for financial support although parents need to evaluate how cash calls could impact their own retirement plans.
Passing wealth through the generations may also involve transferring valuable shares in a family business. But can the next generation be trusted as stewards of a long running family business?
There is certainly no 'one size fits all' solution but what is clear is that "it is essential that a plan is put in place for individuals to best take forward the family wealth in the roles that suit their ambitions, whether that be as shareholders, active business managers or the next generation of entrepreneurs".
The relationships between generations within high net worth families are complex, with cultural influences, changing education paths, and entrepreneurial mindsets being just some of the factors affecting the arrangements around business planning and succession