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British millionaires not proactive enough in protecting wealth

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Britain’s millionaires are not being proactive enough when it comes to protecting their wealth for future generations, according to research by Coutts.

 
The survey, which collates the views of 270 millionaires – those with at least GBP1m in liquid assets – reveals that while one third (37 per cent) admitted to suffering serious conflict within the family when it came to dividing up the money and assets, over half (58 per cent) did not have an up-to-date Will in place.
 
The report, titled “Breaking the wealth taboo: making succession a success”, also shows that one fifth of parents were keeping their true wealth a secret from their children over fears it will quash any aspirations they may have, or protect them from inadvertently revealing too much information to people who may then befriend them for the wrong reasons. Of particular concern was the rise in publically available information fuelled by the rise in social media sites about confidential family affairs. Despite this, barely a quarter (23 per cent) of parents would consider insisting on or even raising the idea of a prenuptial agreement to inheritors, despite divorce rates of 42 per cent in the UK.
 
The Coutts report provides an eight-step journey to help wealthy families consider how best to pass down wealth in a way that meets their vision and objectives. The report also features a number of real life case studies with stories such as; “My daughters ex got two-thirds of her money” and “We’re giving most of our money to charity”.
 
Juliette Johnson, executive director at Coutts, says: “In the UK, 46 per cent of marriages are subsequent marriages and with 2.5 million step-children in the UK, blended families and step-grandchildren are now part and parcel of family life which can add further complication to succession and inheritance planning. Our research shows that unless there is a clear plan and open communication about the succession process, family members can feel frightened and frustrated about how the family assets and money are divided following the death of both parents. This is already an emotional time – and can so easily lead to conflict, which in some instances can split families and cause long-term damage.
 
“It is estimated that GBP1trn will pass down from one generation to the next over the next 20 years, and while many families will make this transfer successfully, many more may not, reinforcing the old phrase of ‘clogs to clogs in three generations’. One simple yet effective strategy of preserving the family wealth is to open up communication in the family and start to think about the various risks that could arise in the future and agree how they should be dealt with. It is easier to raise the idea of prenups before your children meet their prospective spouses. This will provoke a less passionate response, than leaving it until engagements are announced.” 

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