We often work with clients who would like to leave some of their estate to grandchildren. However, there is often the concern that they may not have the maturity to appreciate how an inheritance can help them in the long term, and that younger people might focus on short-term spending or waste their inheritance.
Fairly simple measures can be taken, such as postponing the age of inheritance to 21 or 25, which can hopefully encourage more mature decisions than an 18-year-old might make.
Where more structure is required to manage a grandchild’s inheritance in the long term, trusts can be used to limit access to capital and income.
A trust can provide protection over the capital value ensuring it is only released when the trustees agree that it is going to be used sensibly. Trusts can be used to manage the way a grandchild benefits from any income generated from the fund, but without them having easy access to the capital.
Family investment companies can provide a flexible alternative to trusts. The grandparents’ wealth is managed within a private company of which the family are shareholders. From this, the children and grandchildren can receive dividends depending on their different categories of shares.
Planning what will happen to your estate if you die can give you peace of mind, even if it isn’t the easiest subject to think about. At Glaisyers ETL, we have years of experience helping clients decide which route to take when planning how to allocate their inheritance to family members.
If you are worried about how best to include your grandchildren in your will, please feel free to contact Chris Burrows at our Private Client department at [email protected] or 0161 833 5694.
You can find more of our Private Client resources here.