When reaching later life it is prudent to decide what to do with your money before you die. By not make a will detailing your last wishes you will find that most of your hard earned cash will go to the government rather than to your family or chosen charities.
Should You Help Your Kids?
Did you get a helping hand in your early years? Were you ever left money by elderly family members? The chances are that the answer is no. But with more people who own their own properties reaching retirement age it is likely that their offspring will receive generous handouts upon the demise of their parents.
But is it a good idea for them to expect to receive your money? You need to decide what is best for your children and grandchildren. Indeed if you are child free you will have to decide even more where your money is to go.
Your Later Years
With the increases in the cost of living it would be prudent not to tie up all your money in bequests to your family. Instead cater for your own later years. Use equity release to enjoy your money. You had to work hard to get where you are today – by all means treat your family but do not suffer because they expect large hand outs upon your death. Always obtain advice before subjecting your property to equity release.
You may decide to invest money for your children or even your grand children. Remember that once they reach the age of 16 they will have to account for these savings and pay tax on them. If a child is off to university and you can afford to buy a property let them live in it rent free and also allow them to rent a room to a lodger. Your children will be able to earn £4250 exempt of tax for each lodger.
Helping Your Children
You may feel that you are helping out a child by giving them money when they are either unemployed or off sick. This money will affect the benefits they could receive from the government. They must disclose these gifts when applying for aid.
Any gift of money that is given to your children could become liable for inheritance taxes if you were to die within three years – in some cases up to seven years.
There are ways to invest money for your children that will be tax free if they are under 16. Schemes such as the Children’s Bonus Bonds from National Savings and Investment. You can invest from twenty five pounds to three thousand pounds in each issue and there are several issues each year.
If when you plan to downsize your life you have dreams to travel why not take your children with you? Spending some quality time with them rather than endow them with a monetary gift when you have gone will leave them with happy memories of times spent together. whatever you decide to do with your money make sure your children are aware and are not upset by finding the inheritance they expected has not materialised.