An estimated £7 trillion is expected to pass between generations in the UK over the next 30 years, according to FTAdviser.
As the wealth built by the Silent Generation and Baby Boomers is handed down to Gen X, Millennials, Gen Z, and beyond, the so-called “Great Wealth Transfer” is already underway. And it’s set to accelerate in the years ahead.
The same report suggests that up to 70% of wealthy families lose their wealth by the next generation, and as many as 90% lose it by the third. While some of this loss is inevitable due to taxation, asset division, and everyday spending, much of it could be preserved through careful planning and open communication.
Failing to talk to your beneficiaries about your estate plans can create confusion or even conflict among loved ones, and may mean your estate isn’t as efficient as it could be.
By contrast, open, honest conversations can clarify expectations, ensure your intentions are understood, and help your family plan together for maximum long-term benefit.
With such vast amounts of wealth set to change hands, now is the time to plan carefully and start having open conversations, so everyone is working towards shared goals.
Continue reading to discover four financial conversations you should have with your family to protect your wealth amid the Great Wealth Transfer.
1. “Are our nil-rate bands maximised?”
In the 2025/26 tax year, the “nil-rate band” allows you to pass on £325,000 without incurring Inheritance Tax (IHT).
What’s more, if you leave your main home to a direct descendant, the “residence nil-rate band” adds a further £175,000 to your total allowance, meaning you can pass on up to £500,000. However, this allowance tapers for estates worth over £2 million.
And, if you’re married or in a civil partnership, you can typically pass your entire estate to your partner IHT-free. Your surviving partner can then inherit any unused nil-rate bands, effectively doubling your collective threshold to a maximum total of £1 million.
It’s important to make the most of these allowances during the Great Wealth Transfer, especially since pensions are set to be included in the scope of IHT from April 2027. As such, your estate could be far larger, meaning more of your wealth might be subject to tax.
Read more: The rules around pensions and Inheritance Tax are set to change in 2027. Here’s how you can prepare
Conversations with your loved ones can help ensure you’ve maximised these nil-rate bands. This may involve rewriting wills to make sure that spouses in the family combine their allowances and that properties are passed down to direct descendants.
Without open conversations, your family might unknowingly pay significantly more IHT than necessary during the Great Wealth Transfer, which could reduce the legacy you’ve worked hard to build for the next generation.
2. “Do we have Lasting Powers of Attorney in place?”
If you or another loved one loses mental capacity, other members of the family could struggle to make important decisions on their behalf. Given the potential for significant sums to be involved amid the Great Wealth Transfer, it’s important to nominate a Lasting Power of Attorney (LPA).
An LPA is essentially a legal document that allows you to appoint an “attorney” to make decisions on your behalf should you lose the ability to do so.
Discussing LPAs with your family can ensure that everyone understands who has been appointed and what their responsibilities are. This can help prevent disputes or confusion during what will already be a difficult time.
Moreover, discussing the arrangements openly allows your attorneys to ask questions and fully understand your wishes, ensuring they can act in your best interests if the time comes.
3. “Are there any other estate planning strategies that could benefit us?”
You may want to discuss other estate planning options that could benefit your family.
For instance, you could take advantage of your gifting allowances to lower the value of your estate, while supporting loved ones during your lifetime.
You might also consider using trusts as part of your estate planning approach, as any assets in trust are removed from your estate for IHT purposes.
It’s worth speaking with your family to ensure they understand the terms around a trust, especially if they’re named as beneficiaries.
By reducing the overall value of your estate, either through gifting or putting assets in trust, you can help control how much of your wealth is passed on and what happens to it amid the Great Wealth Transfer.
4. “How could a financial planner help us?”
A financial planner can help you and your family navigate the Great Wealth Transfer. They can talk with multiple family members and help you approach typically challenging discussions around inheritance and estate planning.
They can also work with multiple generations simultaneously, creating an intergenerational financial plan that considers the needs and goals of everyone involved.
This can help ensure that assets are transferred in the most tax-efficient way while supporting each family member’s unique needs.
Get in touch
Our team of independent financial advisers in Lewes is here to support you in your estate planning efforts.
To find out more, please get in touch by emailing us at financial@barwells-wealth.co.uk or by phone on 01273 086 311.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
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.
The Financial Conduct Authority does not regulate estate planning, tax planning, trusts, Lasting Powers of Attorney, or will writing.
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