The Bank of Mum and Dad worry about their legacy

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The Bank of Mum and Dad worry about how their money is spent and like to have some control over the gifted funds, research from Prudential has found.

More than three quarters (77%) of over-55s want some control over such spending.

One in four (26%) worry it could be given to spouses of their children if they get divorced and a third (30%) are mindful that their wealth could be squandered by their children.

Les Cameron, tax expert at Prudential, said: “Record house prices are one reason why inheritance tax receipts are rising fast.

“In 2012/13 fewer than 18,000 estates had an IHT bill but the government says that there will be 41,000 taxpaying estates in 2015/16 and that IHT receipts will hit £6.2bn by 2021/22.

“Reducing inheritance tax bills is relatively straightforward. People need to strike the right balance between giving their wealth away during their lifetime to reduce the size of their estate, and maintaining some form of control after their death over who can access it and when.

“With two in five marriages ending in divorce, it is easy to understand why the problem of keeping wealth within their family is a growing concern for the bank of mum and dad when they’re planning to leave money to children and grandchildren.

“To help ensure efficient inheritance tax planning, obtaining financial and legal advice should be money well spent.”

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Written by: Houseladder