Gifting a Living Inheritance

Passing something on to family to ensure that they’re well looked after and able to meet their financial goals is something that many of us aspire to – and in many cases this gift will come in the form of an inheritance. Helping your beneficiaries after you have passed away can be a good way to make sure you leave a positive impact, however it doesn’t have to be the only way to help out.

Some people prefer to gift what is sometimes referred to as a “living inheritance”. This is typically a substantial sum of money, given to a child or grandchild in order to help them with a major expense such as the deposit for a first home or student loan repayments.


Sooner rather than later

As many young adults find different bills and expenses piling onto them, it can be a real struggle to reach big milestones such as getting onto the property ladder. A living inheritance is a way to support them when they need it the most; a traditional inheritance, on the other hand, is more likely to come when they are older and perhaps more financially stable.

This may make the gift more meaningful, as it will have a significant impact on the recipient’s future. Having funds available for your children or grandchildren when they’re in need of a helping hand is also a very rewarding experience.


The gift you can share

Knowing that you’ll be able to leave an inheritance for your family can be a very rewarding feeling, but sometimes the experience of actually sharing in their excitement as you help them is more rewarding still.

Help your child onto the property ladder, for instance, and you’ll have the satisfaction of visiting them in their first home and helping them to thrive. This is a very lucky position for a parent to be in, and is another reason that some prefer the option of a living inheritance.


Could equity release help?

If much of your wealth is tied up in your home, equity release could be one way of raising money to gift to your loved ones. You should also consider the alternatives, and read ‘Is it right for you?’ carefully before deciding whether or not to go ahead.

Equity release will reduce the value of your estate, and may affect your entitlement to means-tested benefits. The most popular type of equity release plan is a lifetime mortgage, which is a loan secured against your home.

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