Why We Need to Talk About Protecting and Expanding Family Wealth

Financial Planners


Maintaining and increasing wealth and the prosperity of family businesses play an important role in strengthening the Scottish economy as a whole.

Rhian Morgan, Financial Planner at Acumen Financial Planning - Photos, Newsline MediaRhian Morgan, Financial Planner at Acumen Financial Planning - Photos, Newsline Media
Rhian Morgan, Financial Planner at Acumen Financial Planning – Photos, Newsline Media

Many of the most famous brand names have their roots in multi-generational family businesses. Scotland’s top 100 family-owned businesses employ over 110,000 people, with total turnover estimated at over £20 billion.

Therefore, it is important for families to have proper financial planning at every stage of life. It could be someone looking to help young people get back on their feet, or someone preparing to hand over a business to their children.

Rhian Morgan, a financial planner at Acumen Financial Planning, specializes in Inheritance Tax (IHT) and estate planning. She explains that people who have built up a relatively large amount of money (often “baby boomers”) can get frustrated when it comes to things like IHT. They see the younger generation struggling to climb the housing ladder without benefits such as a final salary pension.

“It’s very important for these customers to be able to pass their wealth on to the next generation,” says Morgan. “Part of our role as financial planners is to facilitate conversations. It also includes coaching and helping clients identify opportunities. , is not uniform.”

Morgan aims to bring younger members of the family into the discussion early on, and is working to ensure that the right professionals, such as lawyers, accountants, tax experts and private bankers, are involved in the conversation. “We take a collaborative approach to property planning,” she says. “This is also true when talking about business. For example, if someone wants to transfer stock, they need to consider capital gains tax, wills, powers of attorney, etc.”

There can be various challenges that need to be addressed when it comes to financial planning for family wealth, including getting people to talk about it first.

Morgan says it’s helpful for clients to have a clear understanding of what they want to do with their assets. Acumen can then use financial projections to test such an approach for the feasibility of gift giving without running out of funds for the client in the event of the unexpected. We can work with our clients to explore all options, including how they maintain control and continue to access wealth rather than gifting assets early on.

“Other problems may be related to not having proper legal documentation in place or not knowing what will happen in a relationship,” Morgan adds. “If we are going to transfer wealth to our children, we need to make sure they understand what the implications are if they marry and it becomes marital property. It is important to maintain the

Another challenge is that the associated tax rate relief remains low in relation to how quickly family wealth accumulates, which may complicate the relevant legislation. “Tax rates have been reviewed frequently in the budget, many of which were frozen after the pandemic, and inheritance tax rates and inheritance tax deductions have not changed significantly for many years,” Morgan added.

We also need to deal with people who hesitate to think about death. “There’s something fun about pensions and retirement planning, but not with IHTs and wealth planning. No one wants to think about the end of their lives. There is something to be said for enjoying witnessing the bounty of things.”

Focusing on the main benefits of proper real estate planning, Morgan explains that, from a corporate perspective, there are business reliefs attached to legal entities that mitigate IHT. Taking over a business during a customer’s lifetime also means that the next generation can benefit from the experience. “It’s not just about passing on wealth, it’s about passing on knowledge. You can take your family to the next step, slowly give them responsibility, and teach them about the business in an impactful way,” she says. . “When it comes to inheritance of wealth in general, there is an opportunity to start the seven-year clock early, allowing large gifts to be inherited tax-free. I’ve seen clients pay for their grandchildren’s school fees and set up funds for future driving lessons, so there are plenty of opportunities.”

For younger generations, especially during the current period of high inflation and rising cost of living pressure, it can be helpful to benefit from family wealth early and tap into what is known as a ‘dad and mum’s bank’. .

Morgan concludes: “It’s important to strike the right balance between allowing children to find their own journeys and wanting to give something to the next generation. It is important to do it right.”



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