The kids are alright?

Further to my blog at the end of March “You can’t Take it with you”, I wanted to share with you some experiences and observations around gifting to children.

In many cases people delay making decisions about gifting to their children and other family members which is often due to fears such as: –

  • They may squander the gift – This may indeed be the case, but if they are set to inherit the money eventually, gifting it to them whilst you are still around allows you to guide them.  However, if this is a concern then the money can be gifted into a Trust. This would entail additional cost, added complexity and possibly a feeling of distrust and therefore if you are considering this option, you should be open with the family; at least about why. Another option is to gift an asset such as a property or a house deposit, which is difficult to squander and from our experience, property ownership makes children more responsible.   Another somewhat extreme but effective measure is to make it known that if the gift is used unwisely, they may be disinherited.
  • Too much too young– I love getting song titles from the Specials into my blogs! Some people are concerned that giving money too soon could remove that individuals work ethic and desire to create their own wealth. This can be tricky and the choice will be determined by the child’s personality and the values they have had instilled upon them. Again, a trust may be a possible solution.


  • Future Outlaws – As we all know; divorce courts start from a 50/50 split of assets. If you are concerned about your child’s choice of partner or future partner you could consider a Pre or Post Nuptial agreement; neither of these provides a guarantee but may protect the family’s wealth. Another option once again is a trust.


  • Fairness – To avoid future rifts, most parents would gift on an equitable basis but this may not always be appropriate as each child will have different levels of wealth, income and life choices. In most cases equality is maintained by adjusting inheritances on death to reflect any earlier gifts to beneficiaries.


There is no perfect solution. One of our roles as financial planners is to help clients think through major life decisions such as this and our experience in dealing with many families and family businesses stands us in good stead. Carpenter Rees will help make sure that the decision you reach is sensible, balanced and meets your personal value preferences, family circumstances and concerns over inheritance tax.  Involving family and helping educate them in financial matters is an area where our involvement makes a difference.

Please contact us if we can help you or one of your family members, friends or colleagues pick their way through this maze.


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