Parents delay giving early inheritance over fears of rising divorce rates
A quarter of parents worry their children’s marriages will not last because of lockdown
7th July 2020 11:04
by Stephen Little from interactive investor
Share on
A quarter of parents worry their children’s marriages will not last because of lockdown
Nearly two-thirds of parents are delaying giving out early inheritance as they are worried about rising divorce rates caused by the coronavirus pandemic, research shows.
As a result of lockdown some experts believe there could be a spike in the number of couples filing for divorce.
Rising concerns over marital health is having a significant impact on estate planning, with many parents worried wealth and assets could leave the family estate if their child divorces.
According to a new study by Handelsbanken Wealth Management, 67% of parents have decided to delay family inheritance planning in case their children’s marriages end in divorce.
In fact, a quarter (27%) of parents have little or no confidence about the prospects of their children’s marriages lasting a lifetime and one in six (16%) have doubts about their in-law’s financial competence.
The findings show that these worries are not unsubstantiated, with more than one in four parents (27%) having children who are separated or divorced.
To reduce the risk of wealth leaving the family in the event of divorce, a fifth of parents (21%) are gifting small amounts to their children to help with day to day living. Another 19% are gifting directly to their grandchildren.
The survey of over 1,000 people also found parents were restricting their level of financial support as they believed it could reduce their children’s incentive to work.
Christine Ross, client director at Handelsbanken Wealth Management, says: “The emotional and financial pressures of an enforced lockdown have tested many marriages and sadly for some it will be the final straw. It is not unusual for parents to disapprove of their children’s choice of partner, but they can be equally reluctant to interfere in case they cause a family rift.
“Parents who are pessimistic about their children’s marriages are approaching us for advice on how to prevent assets from leaving the family for good. This often results in parents favouring small financial gifts over lump sums, and in some cases setting up discretionary trusts."
This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.