Generation wealth, generation responsibility

Some of these jumped out at me:

• For Gen Y (broadly those in their 30s and early 40s), Google’s AI says that they are value-conscious – seeking meaning and purpose, suggesting they may want to leave a legacy or work towards a higher philanthropic purpose, and that they are confident, curious, and ambitious, and therefore possibly with a greater lean towards entrepreneurism.
• For Gen Z (broadly, today’s teenagers and those in their 20s), Google AI describes them as pragmatic and financially savvy, suggesting a desire for prudence with what wealth they have or may inherit.

These generations are (or are expected to be) the beneficiaries of the great wealth transfer, the reported massive transfer of wealth from older generations (often referred to as the ‘baby boomer’ generation) to younger generations that is anticipated to take place in the coming years.

Many argue that with wealth comes great responsibility, whether that be to society at large or to future generations of your own family.  Most probably, it is a mixture of the two.

As a result, these two generations will need to take ownership of their financial futures – whether that means managing wealth they’ve built through entrepreneurship or stewarding assets inherited from the previous generation.

There are many reasons why planning at an early stage matters in the responsible stewardship of wealth:

1. Creating an initial backup plan

None of us can predict the future, such as when we might fall ill or have a catastrophic accident, or indeed when this might happen to a close family member. An initial plan, such as a Will (which has the benefit of being written down and legally binding), some simple tax advice, and a Lasting Power of Attorney directing who should be responsible for managing your financial affairs in the event of a catastrophic event, is the bare minimum when it comes to responsible stewardship.  Taking these steps should ensure that the administrative burden of your death does not land as heavily upon your immediate family, especially at a time when they will be dealing with their own grief as well.

That peace of mind should allow you to concentrate on what really matters to you.

2. Tax efficiency

Tax planning is actively encouraged; the government provides people with ways to reduce tax as a method of actively incentivising certain behaviours (such as using an ISA).

It is essential to understand these options to help achieve your family’s goals now and, in the future, whilst adhering to best practice and working within the law.  Many successful people sensibly structure their affairs to maximise available opportunities.

3. Understanding what you’ve already got or will be given

The wealth you have or may receive may be complex and diverse, spread across various ownership structures with distinct tax rules (possibly even in different countries) and different legal methods of accessing that wealth.

Good decision-making is built on knowledge and understanding. Nothing could be more prudent than understanding the situation you have in front of you before taking actions such as releasing assets, spending wealth, or giving away wealth.  As such, maintaining clear and accessible records of assets is key, and professional advisors can provide substantial assistance with this.

Understanding the position and the options means maximising the opportunities to make the best decisions to achieve your goals, whatever they may be.

4. Understanding possible ownership structures

Different ownership structures for your assets, both now and in the future, can help you achieve your objectives, whether in the present, later in life, or after your death.

We can assist clients in assessing whether the correct ownership structure is a joint ownership between spouses or a more complex arrangement, including trusts, companies, or partnerships, and discerning whether those goals are entrepreneurial, investment-focused, personal financial freedom, leaving a legacy for future generations, philanthropy, and much more.

5. Understanding your legal rights and responsibilities

You may have legal responsibilities as a guardian of someone else’s wealth through a Power of Attorney, as an executor of their Will, as a trustee, or as the holder of another such position of responsibility. Likewise, you may have rights as a shareholder in a company, a beneficiary, a dependent, or a spouse. It will be essential to understand and fulfil your legal responsibilities, such as to the beneficiaries of wealth and to HMRC, and also to ensure you are aware of your own rights in reviewing and accessing wealth which may be owed to you or those you care about.

Taking the next step

Wealth, whether earned or inherited, carries both opportunity and responsibility. By starting conversations early and implementing the right plans, you can protect what matters, gain peace of mind, and create the freedom to focus on your goals.

If you would like to explore how best to safeguard and structure your wealth, for yourself and for future generations, our Private Wealth team at Greenwoods would be delighted to help you take those first steps.