3 Useful Options You May Want to Consider When Passing on Assets to Your Loved Ones

Introduction

This article has been prepared by Angus Kirk, an independent Financial Planner at Transform FP, specialising in estate planning for high-net-worth families and individuals. He explores some of the key decisions you may wish to consider when thinking about how best to pass on wealth to future generations.

Planning Your Legacy: Why Timing, Structure, and Intention Matter

We all want the best for our families — not just in our lifetimes, but long after we’re gone. As wealth accumulates over time, a natural question begins to surface: how can I pass on my assets in a way that supports my loved ones, reflects my values, and avoids unnecessary tax burdens?

The good news is, you have more than one option. From gifting during your lifetime, to passing on wealth via your will, or using a trust structure to protect your intentions, your choices can be shaped around what matters most to you and your family. Whether you’re planning to support children onto the property ladder, preserve assets across generations, or ensure your affairs are handled with clarity, these three options could form part of a considered estate plan.

1. Gifting During Your Lifetime: Help When It Matters Most

Making financial gifts while you’re still alive can be one of the most rewarding and effective ways to pass on wealth. It allows you to see the difference your support makes — whether it’s helping a child buy their first home, easing the cost of education, or offering a financial buffer during uncertain times.

With rising living costs and housing affordability remaining a challenge, intergenerational support is becoming the norm rather than the exception. Research from the Institute for Fiscal Studies found that around half of first-time buyers in their 20s receive financial assistance from family. Not only can this be emotionally meaningful, it can also unlock lower mortgage rates and better long-term financial security for the recipient.

But gifting can also be strategic. From a tax planning perspective, transferring wealth early could help reduce the size of your taxable estate. In the 2024/25 tax year, every individual benefits from a £325,000 nil-rate band before Inheritance Tax (IHT) is due, and couples can potentially double that threshold.

Importantly, gifts made more than seven years before your death are typically exempt from IHT. Additionally, small gifts — such as the £3,000 annual exemption — are immediately outside of your estate. Over time, these allowances can accumulate to substantial benefit. Before making a gift, however, there are two essential questions to ask:

1. Will you still have enough to maintain your lifestyle and cover potential care costs in later life?
2. Could gifting now reduce what’s available to other beneficiaries you also wish to support?

A robust financial plan can help weigh these questions with confidence.

“Lifetime gifting can be incredibly impactful — emotionally and financially. But timing is everything. It should always be part of a wider, sustainable estate strategy.”
— Shadi Kirk, Independent Financial Planner, Transform FP

2. Leaving Wealth via a Will: The Traditional, Tried-and-True Option

For many, a will remains the cornerstone of their legacy. It’s simple, well-understood, and ensures that your wishes are honoured after your death — assuming, of course, that it is properly drafted and kept up to date.
Leaving assets through your will is particularly appropriate if you:

• Wish to retain control of assets throughout your lifetime;
• Prefer to defer support until a later stage in your beneficiaries’ lives;
• Are concerned that earlier gifts might compromise your own financial security.

A well-drafted will can serve as a guiding document for your family, giving clarity around who should inherit what — from property and savings to family heirlooms or charitable legacies. It also avoids the default rules of intestacy, which might otherwise distribute your assets in a way that doesn’t reflect your wishes. One drawback of relying solely on a will is that your loved ones may receive wealth after the point at which they need it most. For instance, a child in their 50s may inherit a substantial amount — but only after decades of financial struggle. In such cases, combining a will-based legacy with lifetime gifting could create a more balanced approach.

It’s also worth noting that assets left in a will form part of your taxable estate. As such, careful IHT planning — including the use of allowances, reliefs, and structuring — should be a priority.

“A will is a vital document, but it shouldn’t be your only tool. A truly effective estate plan often involves a blend of strategies working together.”
— Angus Kirk, Independent Financial Planner, Transform FP

3. Using a Trust: Structure, Protection, and Long-Term Stewardship

If you’re seeking greater control over how and when assets are accessed, a trust can offer both flexibility and protection. A trust is a legal arrangement where you (the settlor) place assets under the stewardship of trustees for the benefit of your beneficiaries. The structure allows you to define not only who will benefit, but also under what conditions — such as age restrictions, educational use, or phased access. There are many situations where a trust might be appropriate:

• Passing on wealth to young children or vulnerable adults
• Ensuring wealth remains within the family over multiple generations
• Supporting education costs or property purchases in a controlled way
• Protecting assets from creditors, divorce, or financial mismanagement

From an IHT perspective, trusts can also be used to reduce liability — but the rules are complex. Some transfers into trust may themselves be chargeable to IHT at the time of creation, while others fall under different regimes depending on the type of trust chosen (e.g. discretionary trust vs. bare trust). Once established, most trusts are difficult to unwind, so it is essential to take legal and financial advice to ensure the structure is aligned with your goals.

Designing Your Legacy: The Best Plans Are Tailored

The reality is that you don’t need to choose just one approach. Many clients find that the most effective estate plan blends these options — for example:

• Using annual gifting exemptions to gradually reduce estate size
• Drafting a will to formalise wealth transfer and honour your values
• Creating a trust for grandchildren, with conditions for future use

You may also wish to consider related planning issues, such as ensuring lasting power of attorney is in place, preparing for long-term care, or setting up a letter of wishes to guide executors and trustees.

Let’s Talk About Your Estate Plan

The decisions you make today can shape the wellbeing, choices, and opportunities available to your loved ones tomorrow. Whether you are just beginning to think about estate planning, or ready to formalise your legacy, our team is here to help. Get in touch for a confidential, no-obligation conversation about how to protect your assets, reduce potential tax exposure, and ensure your wealth ends up in the right hands, at the right time.

Important disclaimer: This article is for general information only and does not constitute financial advice. The information is aimed at retail clients only. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. The Financial Conduct Authority does not regulate estate planning, tax planning, or will writing. We recommend that you speak to a qualified financial planner for advice tailored to your individual circumstances and goals.