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Succession planning and talking money with your Children: Key Considerations

21 February 2025

If you’ve watched HBO’s hit series Succession, you’re familiar with the cut throat drama surrounding the Roy family as they grapple with who will inherit the helm of their media empire. While their backstabbing and power plays make for compelling television, the show highlights a very real-world issue: the importance of clear and strategic succession planning.

Whether you’re managing a family business or organising your personal estate Succession planning is a critical process for ensuring that a family’s wealth, business or assets are passed down smoothly and responsibly across generations. While many focus on business continuity and the legal framework of estate planning, an often-overlooked aspect is how to talk about money with your children. The financial decisions that shape the future of your estate and assets can be complex, but an open dialogue can foster understanding and ensure that your legacy is carried on with care and responsibility. In this article, Godwins’ Andrew Neal explores how proper legal frameworks, clear communication, and foresight can ensure a seamless transfer of leadership and assets, avoiding the chaos and uncertainty we see in Succession.

Why Succession planning matters

Succession planning serves as a roadmap for passing on wealth and assets to the next generation. Whether you are transferring a family-owned business, property, investments, or a combination of these, it’s essential to have a plan in place. Proper planning helps reduce the risks of disputes, taxes, and the potential disruption of the family’s wealth.

For many, succession is not just about transferring money; it’s about passing on values, goals, and family traditions. It involves decisions that align not only with legal and financial strategies but also with the family’s vision for the future. That’s where open conversations about money come into play.

The importance of talking about money with your children

When succession planning involves significant financial assets, children may feel entitled, anxious, or even uncertain about their role in managing the wealth. Having frank discussions about money can de-mystify the process and reduce any negative emotions or assumptions. Here are a few key points to keep in mind when broaching the topic:

  1. Start early and foster financial literacy

The earlier you start talking about money with your children, the more prepared they’ll be to manage it when the time comes. Teach them the basics of financial literacy, such as budgeting, saving, investing, and understanding taxes. Having a well-rounded grasp of personal finance will empower them to make informed decisions.

Children who understand the value of money are more likely to respect the family’s wealth and approach it with the responsibility it requires. If a business is involved, offering them a role or involvement, even in a minor way, this can help them develop a connection with the family’s financial legacy.

  1. Discuss values and expectations, not just assets

Money discussions often focus solely on numbers—how much is there, who gets what, and when it will be transferred. However, it’s crucial to also talk about your values and expectations. Discuss why certain assets are being passed on, what you hope your children will do with the wealth, and the impact you want to create. For example, if philanthropy is important to your family, consider incorporating charitable giving into your succession planning.

You should also set clear expectations regarding the management and stewardship of family assets. Will children be expected to manage a family business, maintain investments, or preserve the family home? Setting these expectations early helps children understand their roles and avoid surprises.

  1. Be transparent about your plan

Transparency is key to preventing misunderstandings and resentment down the line. Clearly communicate the details of your succession plan, including the division of assets, any trusts, and how decisions will be made. If there are any contingencies, such as conditions tied to inheritances or the future of a business, explain them clearly.

In addition, be open to feedback and discussions. Your children may have questions, concerns, or ideas about how things should unfold, and addressing them proactively can prevent conflict in the future.

  1. Consider the emotional impact

Money can carry a heavy emotional weight, especially when family dynamics are involved. Sibling rivalry, differing values, or even jealousy can arise. It’s important to acknowledge the potential emotional impact of your decisions and ensure that your children are prepared to manage these feelings.

Encourage family meetings with an estate planner or financial advisor, or consider involving a neutral third party to mediate discussions. This provides an opportunity for everyone to express their thoughts and ensures that the plan remains fair and well-understood by all parties.

  1. Review and update the plan regularly

Family dynamics and financial situations can change, so it’s essential to regularly review and update your succession plan. Life events, such as births, marriages, or the introduction of new family members, may require adjustments to the plan. Periodic discussions help to keep the plan relevant and allow everyone to stay aligned on goals and expectations.

Conclusion

Succession planning is as much about communication as it is about numbers. Talking openly and regularly with your children about money and your intentions for passing on wealth not only prepares them for the responsibility but also fosters a sense of trust and unity. By considering financial literacy, values, expectations, and emotional dynamics, you can create a legacy that benefits future generations while minimising the conflict and confusion as seen in the TV series.

Do get in touch with the Godwins team if you have any questions about Succession planning.

Making a will – guide for an individual

13 October 2022

This briefing note is designed to provide an overview of some of the points you may wish to consider when reviewing your existing Will or putting a new Will in place. The information in this note is brief so please let us know if you would like further information on any of the points raised.

Why should I make a Will?

A valid Will dictates how your estate will pass after you die. If you die without a valid Will, your estate will pass in accordance with a set of statutory provisions, known as the “Intestacy Rules”. The Intestacy Rules are no substitute for a properly drawn-up Will and can often result in unintended consequences. For example, under the rules an unmarried partner has no rights at all.

When should I review my Will?

You should review your Will at regular intervals, to ensure that it is still appropriate to your circumstances and that it is consistent with the latest legislation.

In particular, you should consider reviewing your Will whenever there is a major change to your or any of the beneficiaries’ financial and/or personal circumstances. Please note that if you were to get married, this would have the effect of revoking your Will (unless that Will was specifically made in contemplation of the marriage).

What should I include in my Will?

A Will can deal with a multitude of matters. As a starting point, you may wish to consider the following:

Executors Executors are people you entrust to deal with your estate following your death and to carry out the terms of your Will. The role carries with it great responsibility and it is important you choose people who you trust to deal with things properly. Executors are required to act unanimously, so it is important that the people you choose are capable of working well together. Executors should be at least 18 years of age, of full capacity and, crucially, likely to outlive you!

In some circumstances, it may be possible/appropriate to appoint the Members of Godwins Solicitors LLP as your executors. We are happy to discuss this with you.

Funeral wishes You may like to include your funeral wishes in your Will, although there is no requirement to do so. It is one of the first things we get asked following a death; it is important that your next of kin are aware of your wishes.

You may wish to state whether you would like to be buried or cremated, the location of your final resting place, and/or whether you would like your body to be made available for medical research or organ transplant.

Guardians If you have minor children then you ought to consider who would be best suited to caring for and looking after your children. Please note that a guardianship provision would only be capable of taking effect on the death of the last person with parental responsibility for any child.

Personal possessions and specific bequests

We tend to deal with personal belongings separately from the rest of the estate, as this reduces complications when dealing with the estate administration. We usually provide for a person’s belongings to pass to the executors to distribute at their discretion. If you have particular items that you would like to pass to specific individuals, we can record this in a separate Letter of Wishes, which you can update from time to time without the need to change your Will.

Pecuniary and specific legacies

You may decide to leave cash gifts of fixed amounts or specific assets to one or more individuals or charities.

Residuary estate

You will need to consider who you would like to receive the balance of your estate after payment of all liabilities and administration expenses to include taxes arising as a result of your death as well as any legacies given in the Will (known as the “residue”) and the way in which you would like those people to benefit. If there is more than one beneficiary, you will need to decide on the respective shares that they are to receive.

If you have children, you will want to consider the age at which you would be happy for them to receive funds. The default is age 18, however, many people prefer to defer this until age 21, 25, or even later. You should also consider what you would want to happen if none of your intended beneficiaries were to survive you. In these circumstances, do you have other individuals or charities in mind who you would like to benefit?

Another consideration is whether it would be unwise to make funds available to any of the beneficiaries for any reason (e.g. if there is a risk of divorce or bankruptcy proceedings).

Finally, you should consider if there is anyone who might feel aggrieved by the provisions of your Will and who may seek to challenge it. Whilst it is not possible to remove the risk entirely, there are steps that can be taken to reduce the likelihood of a successful claim being made against your estate.

What about inheritance tax?

In preparing your Will, it is necessary to give some thought to inheritance tax, which is primarily a charge to tax on the value of an individual’s estate at death. On a person’s death, inheritance tax is currently payable at the rate of 40% on the chargeable value of the estate above the “nil rate band”. The nil rate band is currently £325,000 (but may be reduced by the value of certain lifetime transfers/gifts).

There are some steps you can take during your life to reduce the value of your estate for inheritance tax purposes.

In terms of Wills, there are a few points to note: • As of April 2017, an additional allowance known as the “residence nil rate band” may be available where a person leaves a property interest to “direct descendants” (which includes children, grandchildren, and so on, as well as step-children and the spouses/civil partners of those people). The maximum amount of the residence nil rate band is currently £175,000. Care should be taken when drafting a Will to ensure that the residence nil rate band is capable of being claimed. A taper is applied to reduce the available residence nil rate band for estates valued over £2 million. • Gifts to charities are free of inheritance tax. In addition, the overall rate of inheritance tax is reduced from 40% to 36% where a person leaves at least 10% of their net estate to charity. • Properly structured gifts of farmland, business interests, and shares in unquoted trading companies may qualify for generous reliefs from inheritance tax. It is important that you let us know if you hold any assets of this nature.

Can my beneficiaries amend my Will?

It is currently open to the beneficiaries of a Will to vary their entitlements, if so desired. There are no inheritance tax implications, provided this is done within 2 years of death. For example, a beneficiary may have no real need of their inheritance and may prefer to pass it on to their children. Provided this is done correctly, the funds will effectively bypass the original beneficiary’s estate for inheritance tax purposes.

What happens if I lose mental capacity during my lifetime?

Whilst dealing with your Will, you may also wish to consider what would happen if you were to become mentally incapable of dealing with your affairs during your lifetime. We can advise you on putting in place Lasting Powers of Attorney and/or Advance Decisions to deal with the position. Please contact us if you would like further information on this.

The information in this guide is not intended to replace specific advice tailored to your individual circumstances. Information correct as of January 2022

Points to consider in planning your will

2 January 2022

Information for married couples and civil partners

This briefing note is designed to provide an overview of some of the points you may wish to consider when reviewing your existing Will or putting a new Will in place. The information in this note is brief so please let us know if you would like further information on any of the points raised.

Why should I make a Will?

A valid Will dictates how your estate will pass after you die. If you die without a valid Will, your estate will pass in accordance with a set of statutory provisions, known as the “Intestacy Rules”. The Intestacy Rules are no substitute for a properly drawn-up Will and can often result in unintended consequences. For example, under the rules, a surviving spouse will not necessarily inherit the whole of the estate, whilst an unmarried partner has no rights at all.

When should I review my Will?

You should review your Will at regular intervals, to ensure that it is still appropriate to your circumstances and that it is consistent with the latest legislation. In particular, you should consider reviewing your Will whenever there is a major change to your or any of the beneficiaries’ financial and/or personal circumstances.

What should I include in my Will?

A Will can deal with a multitude of matters. As a starting point, you may wish to consider the following:

Executors

Executors are people you entrust to deal with your estate following your death and to carry out the terms of your Will. The role carries with it great responsibility and it is important you choose people who you trust to deal with things properly. Executors are required to act unanimously, so it is important that the people you choose are capable of working well together. Executors should be at least 18 years of age, of full capacity and, crucially, likely to outlive you!

In some circumstances, it may be possible/appropriate to appoint the Members of Godwins Solicitors LLP as your executors. We are happy to discuss this with you.

Funeral wishes

You may like to include your funeral wishes in your Will, although there is no requirement to do so. It is one of the first things we get asked following a death; it is important that your next of kin are aware of your wishes.

You may wish to state whether you would like to be buried or cremated, the location of your final resting place, and/or whether you would like your body to be made available for medical research or organ transplant.

Guardians

If you have minor children then you ought to consider who would be best suited to caring for and looking after your children. Please note that a guardianship provision would only be capable of taking effect on the death of the last person with parental responsibility for any child.

Personal possessions and specific bequests

We tend to deal with personal belongings separately from the rest of the estate, as this reduces complications when dealing with the estate administration. We usually provide for a person’s belongings to pass to their surviving spouse on the first death, and thereafter to pass to the executors to distribute at their discretion. If you have particular items that you would like to pass to specific individuals, we can record this in a separate Letter of Wishes, which you can update from time to time without the need to change your Will.

Pecuniary and specific legacies

You may decide to leave cash gifts of fixed amounts or specific assets to one or more individuals or charities.

Residuary estate

You will need to consider who you would like to receive the balance of your estate after payment of all liabilities and administration expenses to include taxes arising as a result of your death as well as any legacies given in the Will (known as the “residue”) and the way in which you would like those people to benefit. If there is more than one beneficiary, you will need to decide on the respective shares that they are to receive.

On the death of the first of a married couple/civil partners, it is usual for the bulk of the estate to pass to the survivor. There are two ways in which this can be achieved, either by way of an outright gift or otherwise by leaving assets to the survivor on a “life interest” trust.

• An outright gift means that the survivor receives the assets without restriction and is free to do with them exactly as he or she pleases. This is the simpler option and is often appropriate in the case of a first marriage, where the intention is to benefit shared children on the second death.
• A gift on a life interest trust meanwhile entitles the surviving spouse/civil partner to the income of the assets (including the right to occupy any property owned by the deceased) for the remainder of his or her life. It does not, however, give them a right to the underlying capital value of those assets, which is preserved for the benefit of the ultimate beneficiaries. This option is more complex, but may be sensible in the case of a second marriage where each party has children of their own from a previous relationship and/or if there are concerns about ringfencing funds against care fees, etc. We are happy to advise further on the options available.

If you have children, you will want to consider the age at which you would be happy for them to receive funds. The default is age 18, however, many people prefer to defer this until age 21, 25, or even later. You should also consider what you would want to happen if none of your intended beneficiaries were to survive you. In these circumstances, do you have other individuals or charities in mind who you would like to benefit?

Another consideration is whether it would be unwise to make funds available to any of the beneficiaries for any reason (e.g. if there is a risk of divorce or bankruptcy proceedings). Finally, you should consider if there is anyone who might feel aggrieved by the provisions of your Will
and who may seek to challenge it. Whilst it is not possible to remove the risk entirely, there are steps that can be taken to reduce the likelihood of a successful claim being made against your estate.

What about inheritance tax?

In preparing your Will, it is necessary to give some thought to inheritance tax, which is primarily a charge to tax on the value of an individual’s estate at death. On a person’s death, inheritance tax is currently payable at the rate of 40% on the chargeable value of the estate above the “nil rate band”. The nil rate band is currently £325,000 (but may be reduced by the value of certain lifetime transfers/gifts).

There are some steps you can take during your life to reduce the value of your estate for inheritance tax purposes.

In terms of Wills, there are a few points to note:

• Where a couple are married or in a civil partnership, any unused nil rate band of the first spouse/civil partner to die may be transferred and set against the estate of the survivor on their eventual death (the so-called “transferable nil rate band”). This claim is for the unused percentage, rather than the value unused at the time. On present values, then, the combined nil rate band and transferable nil rate band available on the second death may be as much as £650,000. It is for this reason that it is sensible to leave the bulk of the estate (and certainly everything in excess of the nil rate band) to the surviving spouse/civil partner on the first death, as this avoids an immediate charge to inheritance tax because it is covered by the spouse exemption.
• As of April 2017, an additional allowance known as the “residence nil rate band” may also be available where a person leaves a property interest to “direct descendants” (which includes children, grandchildren, and so on, as well as step-children and the spouses/civil partners of those people). The maximum amount of the residence nil rate band is currently £175,000. Care should be taken when drafting a Will to ensure that the residence nil rate band is capable of being claimed. As with the “normal” nil rate band, any unused residence nil rate band of the first of a married couple/civil partners to die may be transferred and set against the estate of the survivor on the second death (the “brought-forward allowance”), giving a further maximum allowance of £350,000. A taper is applied to reduce the available residence nil rate band for an estate valued
over £2 million.
• Gifts to charities are free of inheritance tax. In addition, the overall rate of inheritance tax is reduced from 40% to 36% where a person leaves at least 10% of their net estate to charity.
• Properly structured gifts of farmland, business interests, and shares in unquoted trading companies may qualify for generous reliefs from inheritance tax. It is important that you let us know if you hold any assets of this nature.

Can my beneficiaries amend my Will?

It is currently open to the beneficiaries of a Will to vary their entitlements, if so desired. There are no inheritance tax implications, provided this is done within 2 years of death. For example, a beneficiary may have no real need of their inheritance and may prefer to pass it on to their children. Provided this is done correctly, the funds will effectively bypass the original beneficiary’s estate for inheritance tax purposes.

What happens if I lose mental capacity during my lifetime?

Whilst dealing with your Will, you may also wish to consider what would happen if you were to become mentally incapable of dealing with your affairs during your lifetime. We can advise you on putting in place Lasting Powers of Attorney and/or Advance Decisions to deal with the position. Please contact us if you would like further information on this.

The information in this guide is not intended to replace specific advice tailored to your individual circumstances. Information correct as of January 2022.

A guide to gifting property

10 November 2020

Property Gifting can be a tax efficient way to pass inheritance down a generation or two, not to mention helping children or
grandchildren on to the housing ladder. For property (be it a house, farm or land), here are some top tips to consider:

Is the property registered? Hampshire was one of the last areas to introduce compulsory first registration of land. Consequently, there are still properties which are not registered at HM Land Registry. As a matter of good legal housekeeping, it is sensible to ensure that property to be gifted is registered so that you and your family can deal with it more easily. This will provide comfort that the legal title is held on a central electronic register, rather than in paper deeds that could be lost or damaged over time.

Whole or part? If you are gifting the whole property, then the process can be straight-forward. However, if you wish to split up a property – perhaps a farm – so that you gift part of it to one child and part to another, then some thought needs to be given to the legal structure of the gift. Of particular importance is what rights and reservations each part of the property may need for independent occupation.

Do you wish to retain control of the gifted property going forward? Property can either be gifted outright to children and/or grandchildren or to a discretionary trust. The advantage of the former approach is simplicity. However, the property gifted is then vulnerable to the recipient’s own misfortunes, whether that be death, divorce or bankruptcy, and is no longer within your control. By contrast, a gift to trust of which you
remain one of at least two trustees, can be controlled, managed and protected by you for the benefit of your intended
recipients.

What are the tax implications? With any gift, it is important to consider the interplay between inheritance tax and capital gains tax on the transfer, as well as any stamp duty land tax (SDLT) and income tax implications. This is a complex area but can be worked through methodically to ensure the best result depending on your and your family’s personal circumstances.

Can you continue to benefit from the assets gifted away? This is a question often asked. In order for the gift to be effective for inheritance tax purposes, it is important that you do not reserve any benefit in the gifted property. This means paying market rent for your use of the property following the date of the gift. The implications vary, depending on how the gift is structured, which, once again, will be discussed with you in detail.