Preparing your family for the great wealth transfer|Essentially Wealth

Up to 70% of family wealth can be lost by the second generation without structured planning

IHT changes and pension reforms could accelerate gifting and estate restructuring decisions

Open communication and professional guidance improve long-term wealth preservation outcomes

Over the next two decades, the world will see one of the largest transfers of wealth in history. Research¹ suggests that over $83tn globally could pass from older generations to their children and grandchildren by 2048. In the UK alone, it’s estimated that around £7tn will change hands by 2050.

Strong investment growth in recent years has increased the value of assets held by many families, meaning the scale of this transfer could be even larger than expected. As wealth moves from Baby Boomers to Generation X, Millennials and Generation Z, many families will need to consider how best to pass on assets while protecting their long-term legacy.

Why planning matters

Passing on wealth is not straightforward. The study suggests that around 70% of family wealth is lost by the next generation and up to 90% by the third. Without careful planning, wealth can quickly erode through poor decision-making, tax inefficiency and lack of financial education.

A well-structured strategy can help ensure your wealth supports your family in the way you intend, both now and in the future.

More than just passing on money

Successful wealth transfer involves more than leaving a financial inheritance. It often means taking a broader view of your family’s future and preparing the next generation to manage wealth responsibly.

Open conversations can play an important role. Discussing your intentions, values and long-term goals with family members can help avoid misunderstandings and conflict later on, ensuring everyone understands the bigger picture.

Break it down

Breaking the process into manageable steps helps. We can support you at each stage:

Identify your beneficiaries and clarify who you want to benefit

Select the most appropriate wealth transfer structures, such as lifetime gifting and trusts

Develop a tax-efficient strategy to minimise Inheritance Tax (IHT) and other liabilities

Facilitate family discussions to ensure everyone understands the plan

Help educate future beneficiaries so they are prepared to manage their inheritance

Review and update your plan regularly to reflect changing circumstances.

Reviewing your options

Proposed changes to the IHT treatment of pensions from April 2027 may accelerate the pace of wealth transfer. As a result, now could be a good time to revisit existing arrangements.

¹Capgemini 2025

It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.