The Shift I’m Seeing
A pattern I’ve noticed amongst families with wealth to pass on recently is this: parents are gifting inheritances early instead of waiting for their will to manage it.
More of our clients are asking not how to pass wealth on, but when. It’s no longer just a technical conversation about wills and tax thresholds. It’s emotional. It’s layered.
We’re living through what’s often referred to as the “Great Wealth Transfer”, the gradual movement of wealth built up by Baby Boomers down to the next generations. Recent changes to pensions and Inheritance Tax mean I’m having these conversations more often. But what strikes me is that they’re rarely just about tax efficiency. They’re about the difference money could make to their children and grandchildren now, not eventually, but while they are here to see it.
Of course, there are fears: of money being spent in ways they wouldn’t choose to, of who their children might meet, of divorce, business failure or illness. Ultimately, a fear of the wrong people benefiting from their life’s work. And above all, fear of running out of money themselves. The cost of care sits firmly in people’s minds. Many have watched their own parents’ estates gradually eroded by care fees.
Yet alongside that caution is a genuine desire to see their money make a difference while they are alive. Increasingly, I hear clients say, “I’d rather see it helping them now than sitting in the bank.” That shift is significant.
Why Waiting Until Death Often Misses the Point
Timing matters more than most people realise. A £100,000 gift at 30 is rarely just £100,000. It can be the difference between renting for another decade or owning a home. It can reduce mortgage pressure at a stage of life when costs are highest. It can allow one parent to reduce their working hours. It can provide breathing space. It can turn a business idea into something real.
Money is most powerful when it removes pressure.
When wealth arrives later in life, it is of course appreciated. But its function is different. It tends to reinforce an already established position rather than create it. It becomes additional security rather than foundational support.
There is also the benefit of time. Assets purchased earlier have longer to grow. Beyond the numbers though, there is something more human at play. There is a profound emotional difference between seeing the impact of your wealth while you are alive and knowing it will be distributed after you are gone.
I see a psychological shift happening, from preservation to participation. From simply accumulating wealth to intentionally using it. There is satisfaction in knowing you eased pressure at a critical stage of life. In seeing a grandchild settled in a home you helped fund. In knowing a business exists because you backed it.
This is where saving with intention becomes important. Not just investing to maximise growth for growth’s sake, but investing with purpose.
When objectives are clear, wealth becomes directed. Gifting becomes deliberate rather than reactive. That clarity usually starts with a structured financial plan.
The Risks Holding Us Back
In my experience, hesitation is rarely about a lack of trust.
There’s an old saying that inheritance tax is a voluntary tax – that if you trust your family to look after your money, and plan properly, much of it can be avoided through early estate planning. And it’s true that with careful structuring – gifting, exemptions, spousal transfers, thoughtful use of allowances – a 40% liability can often be reduced significantly.
But my clients, in the main, do trust their children.
What they don’t trust is the unpredictability of life.
Divorce.
Business failure.
Illness.
Market downturns.
Money gifted outright could leave the family line. Bankruptcy or failed ventures could erode it. Premature gifting without planning could compromise their own financial security. And the biggest fear of all – running out of money later in life – stops many people from acting at all.
This is where our role matters.
We don’t just encourage gifting. We build lifetime cashflow models. We stress-test plans. We factor in longevity, care fees, inflation and market downturns. We plan for worst-case scenarios before clients part with capital. The aim is not reckless generosity. It’s confident generosity.
The Practical Side: Planning Properly
Gifting should never be guesswork. Yes, Inheritance Tax planning forms part of the conversation. Understanding the seven-year rule. Potentially exempt transfers. Taper relief.
I have had many conversations to explain annual gifting exemptions, gifts out of surplus income and passing assets to a spouse, there are rules and regulations with these which can be difficult to get your head around if you don’t deal with them as part of your day to day.
For some families, trust planning becomes relevant, discretionary structures, loan arrangements, that allow a degree of protection and control. The right structure depends entirely on the family dynamic and objectives.
But tax is only one side of the equation. The real foundation is cashflow planning. Ensuring clients have enough and planning for longevity, factoring in care costs and accounting for inflation and market volatility.
When we model scenarios properly, something powerful happens. Clients stop operating from fear and start operating from clarity. The most powerful sentence we can say to a client is: “You’re going to be absolutely fine.” When someone truly understands they have enough – even in conservative scenarios – gifting becomes an informed decision rather than an emotional gamble.
Conclusion: A Shift in Mindset
The emotional reality is simple: you still need to live. Security first. Generosity second.
Gifting should never compromise dignity. Clients must feel financially secure. Longevity risk is real. Care costs are unpredictable. But when planning is done properly, wealth transfer becomes less about tax and more about impact.
Many families don’t pass down wealth effectively because they were never shown how to build cash-flowing assets in the first place. Or because financial conversations were never open or comfortable. That’s changing. We’re seeing more multi-generational planning, more education for Gen X and Y around investing, stewardship and responsibility. Because ultimately, this isn’t about tax avoidance. It’s about intentional wealth and using capital where it makes the greatest difference. It’s about seeing the impact of your life’s work while you’re here to witness it.
If you’re wondering how much you can afford to gift – or whether you can afford to gift at all – that conversation starts with clarity.
If you’d rather see your wealth working in your lifetime instead of waiting for a will to do the talking, we can help you plan that properly.
At Herbert Scott, we help families gift with confidence – ensuring they have enough, planning for the unknown, and giving them permission to be generous without fear.
The topics we cover in our blogs aren’t just things we read about – they’re the real-world challenges and decisions we work through with clients every day. Whether it’s navigating changing tax rules, managing investment uncertainty, or planning for life’s bigger moments, this is exactly what we’re here for. If you’re already working with us, you can take comfort in knowing we’ve got it covered. If you’re not yet a Herbert Scott client but you’d like a team that stays on top of all this for you, we’d love to have a conversation. Get in touch, we’re always happy to talk.
Risk warnings
Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.