Should I leave a gift in my Will to help my grandchild get on to the property ladder?
Gavin Barwell, MP for Croydon Central and the current housing minister, recently suggested that grandparents should consider leaving an inheritance to their grandchildren to help them get on to the property ladder.
With the latest Land Registry figures showing the average house price in the UK at £216,750 in July 2016 having risen 8.3% over the preceding year, it is easy to see the struggle for the next generation of first time buyers.
On the face of it the solution of a gift from the modern bank of Nan and Grandad may provide a useful solution for first-time buyers to get on the property market, but it may not be best the solution for you and your family. Each family's needs are different and the solution might involve a compromise.
While you may wish to help your grandchildren get on the property market, you may want to consider whether your own children have enough for the future. The number of people with dementia is steadily increasing and with that comes the need for careful planning for the future to ensure that the right care and support is available. The real question, perhaps is 'if I leave the gift to my grandchild(ren), will my own children have enough to live comfortably?'
Others may feel a form of 'moral obligation' to leave their estate to their children to give them the financial security of settling their mortgage.
In any event, your children (and any beneficiary) can always redirect funds or assets to their children by either gifting it themselves or by varying the estate using a deed of variation to mitigate inheritance tax.
If you do decide to provide for your grandchild, you may want to ask yourself:
- 'Do I leave my house or a fund to achieve this objective?'
- 'Are my grandchildren responsible enough to receive the money I want to leave them or should someone else have control of the fund to see that it is used properly?'
- 'My grandchildren are quite young; do I want them to wait until they have some life experience first?'
A good starting point when considering your Will is the Law Society's guidance on making a Will. From there you might decide that the only way to be certain of achieving your wishes is to talk matters through with an expert.
For more information or to arrange a meeting with a specialist solicitor to discuss how to ensure your wishes are met, please contact Robert Mulvany or another member of the Blake Morgan succession and tax team.