Over half of parents want to give away early inheritance

By Lenore Rice

Just over a half of parents want to give an early inheritance gift to their children according to a new study by Key Retirement.

The 53 per cent of parents who said they favoured gifting to their offspring in their lifetime indicated that they would give an average of £15,000, and 10 per cent of those said they would hope to gift over £25,000. There are mixed motives for lifetime inheritance gifting, with parents obviously considering the long-time financial benefits as part of careful estate planning. The other consideration is that longer life expectancy means that traditional inheritances are being given to offspring when they are in their 60's or 70's, and have already endured the most expensive years.

The majority (58%) of those intending to make gifts to their children want to help them buy a property, while 17 per cent want to assist with a car purchase and 13 per cent have earmarked the money to help pay for a wedding.

Lifetime gifting can be done in a number of ways, though just under a quarter (22%) of those who were surveyed said they would consider releasing equity from a property. That approach obviously results in the parents taking on a new financial burden in the form of increased monthly mortgage payments, and needs to be offset against the risk of a fall in property values by the time they come to sell and redeem the mortgage.

Lifetime gifting should be considered as part of an overall estate plan that includes inheritance tax advice, as well as a discussion of the other financial implications.

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