Estate planning: balancing family, tax and future care

Many families who wouldn’t consider themselves “wealthy” may still hold significant value in one key asset – their home. Rising property prices mean ordinary households are now sitting on estates that could carry Inheritance Tax (IHT) implications.

At the same time, there’s a growing recognition that wealth doesn’t always transfer smoothly.

Research by The Williams Group suggests that up to 70% of families lose their wealth by the next generation, rising to 90% by the third. It’s a reminder that passing on wealth isn’t just about the numbers; it’s about preparing the people who will receive it.

For most families, it’s not just about how much is passed on, it’s about doing it in a way that feels considered, fair, and sustainable.

On the surface, it can seem simple: build wealth over time, then pass it on. But when you look more closely, estate planning tends to rest on three core pillars that need to be considered together:

• Supporting your children or grandchildren
• Reducing the inheritance tax bill
• Maintaining your own financial security

Each of these makes complete sense. The challenge is that they don’t always align.

For example, gifting large amounts early might reduce tax, but it can also limit your flexibility if your circumstances change later on. Equally, holding on to assets for security might mean missing the opportunity to support your family when it could make the biggest difference.

That’s why estate planning isn’t just about maximising what you leave behind. It’s about making decisions that reflect your wider life and goals, not just your finances.

For many people, this is where the conversation starts.

There’s a natural desire to help, whether that’s contributing towards a first home, supporting education, or simply giving children a stronger financial footing.

More families are now choosing to give earlier, rather than later. In the right circumstances, that can make a meaningful difference.

A well-timed gift could help a child onto the property ladder, ease financial pressure at key life stages, and provide greater stability earlier in adulthood.

But timing is only part of the picture.

How you give matters just as much. Using allowances, spreading gifts over time, or structuring support carefully can help ensure your generosity fits comfortably within your overall plan.

There’s also growing value in involving the next generation in these conversations. Not to hand over control, but to build understanding and confidence, particularly as more wealth begins to pass between families.

Tax is often a key concern within estate planning.

IHT can significantly reduce the value of an estate if no planning has taken place. But there are ways to manage this more efficiently, particularly with early preparation.

This might include making full use of available allowances, reviewing how assets are held, and planning gifts gradually over time.

The key point is that tax planning tends to work best when it’s done in advance. Leaving decisions too late can limit your options. Starting earlier gives you more flexibility and allows decisions to be made in a more measured, considered way.

At the same time, tax shouldn’t become the sole focus.

A strategy that looks efficient on paper doesn’t always reflect real life. It still needs to work for you, your family, and your wider priorities.

This is often the most sensitive part of the conversation, but it’s also one of the most important.

Later life can bring additional costs, particularly if care is required. And those costs aren’t always predictable.

This introduces a simple but essential principle. Before focusing on what you’ll pass on, it’s important to make sure you have enough to support yourself.

In practical terms, that might mean:

• Retaining a portion of your wealth as a buffer
• Avoiding large gifts that could reduce your flexibility
• Planning for different care scenarios, even if they never arise

It’s not about being overly cautious. It’s about maintaining independence and choice in later life. Once assets have been given away, they’re no longer available, so these decisions need to be made carefully and with a long-term view.

When you bring these pillars together, the importance of balance becomes clear. Focusing too heavily on one area can create challenges elsewhere:

• Giving too much too early could leave you exposed later
• Focusing only on tax efficiency might overlook family dynamics
• Holding on to everything might delay support that could make a real difference

Financial planning helps bring these elements together in a structured, joined-up way.

It’s not about finding a perfect answer, but about creating a plan that reflects your circumstances, and can adapt over time.
Because every family is different.

The Great Wealth Transfer highlights the scale of what’s happening. But for most people, the key question isn’t about scale, it’s about approach.

In practice, thoughtful estate planning comes down to three core aims: supporting your family in a meaningful and timely way, managing tax efficiently, without overcomplicating things, and making sure your own financial security remains intact

Estate planning doesn’t need to be resolved all at once. But it does benefit from being considered early, and reviewed regularly as circumstances change.