How wealth is eroded
Erosion of wealth can occur for many reasons and it will not surprise you to learn that taxation is one of those reasons with unprotected gifts and inheritances susceptible to double taxation taps. Perhaps more surprising though is that it is the social impacts on gifts and inheritances that have a far more damaging effect such as children divorcing, bankruptcy, claims from creditors and long-term care.
With many parents wishing to help children onto the property ladder with substantial gifts during their lifetime, this area has become of particular concern, especially with divorce rates so high in the UK.
How can you protect lifetime gifts or inheritances from these damaging effects?
Once thought of as purely planning for the wealthy, trusts have now become a much more mainstream and accessible part of estate planning with trust frameworks setup, often in conjunction with your Will, so that children or grandchildren can receive gifts or inheritances in a protected manner.
By taking proactive measures, families can mitigate the risks of asset destruction and ensure that their wealth and legacy that took generations to build, endure through the generations.
