Actor Daniel Craig says he won’t leave great sums of money to his children; Talking about Inheritance

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August 26, 2021 - Neil Haley

Actor Daniel Craig says he won’t leave great sums of money to his children; Talking about Inheritance

“Isn’t there an old adage that if you die a rich person, you’ve failed?” the Bond actor Daniel Craig told Candis magazine, adding: “I don’t want to leave great sums to the next generation.” He says that his philosophy is to get rid of his fortune before he dies. Craig’s high profile and his comments on this sometimes taboo subject have opened up a public conversation about the issues surrounding wealth, inheritance, and whether or not you should leave money to your loved ones when you die.

The internet is alight with people having honest and frank conversations about their intentions about money in a more open way than before. What is interesting is that there are so many differing and sometimes conflicting views on the subject. And whilst few people have the dilemma of what to do with the estimated $160 million Daniel Craig has amassed, inheritance of more modest amounts is common.

Many parents want to leave their children with some financial security for the future. With house prices ever increasing, many see inheritance money as the only way of being able to either buy their own home or to pay off large mortgages. Others plan to spend their wealth, or gift it to charity when they die.

Whilst the formality of inheritance is often left to a solicitor with a will, as financial advisers, we want to talk with our clients and help them to plan for their wealth after their death. Whether you plan to spend your wealth or save it, there is no escaping the need for planning if you are to have a successful and happy retirement.

Financial planning: If you plan to spend or donate your wealth

If you plan to enjoy your retirement and have no intention of leaving any wealth behind, then you might be thinking there is no need for financial planning. Yet the most important consideration is making sure you control your spending so that you have enough to live comfortably on until the end of your life. Life expectancies are getting longer and many people in good health can expect to live into their mid 80s or early 90s. In short, you don’t want your money to run out. You need to make sure that you are drawing down the right amount each month to sustain a comfortable income, as well as having enough to provide unexpected costs such as care fees, and this takes careful investment management.

There are ways you can release money from property you own if you are certain you do not wish to leave money to beneficiaries. Equity Release allows you to release equity from your home whilst allowing you to live in the property until you die. The lender recoups the money borrowed with interest from the sale of the home on death.

Many people plan to take a philanthropic approach to their accumulated wealth and find genuine pleasure in gifting to organisations that benefit society. If, like Daniel Craig, you have sizeable assets then gifting while you are alive is worth considering. Daniel Craig is not cutting out his children out of spite, he simply acknowledges that if they are financially secure, his vast sums of money could be used for the greater good.

If you are considering leaving some money to charity and some to family, then the amount gifted to registered charities will be taken off the value of your estate before Inheritance Tax is calculated. If 10% or more of your estate is left to charity, this can reduce your Inheritance Tax rate from 40% to 36%.

Financial Planning: If you plan to leave money to loved ones

Most people who plan to leave their wealth to loved ones are keen to minimise the amount of Inheritance Tax paid to the government on their death.

The good news is that the standard Inheritance Tax rate of 40% is only charged on the part of your estate that is above the £325,000 threshold.

This means there is normally no Inheritance Tax to pay if:

  • the value of your estate is below the £325,000 threshold
  • you leave everything above the £325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club

If you give away your home to your children or grandchildren your threshold can increase to

£500,000. Similarly, If you’re married or in a civil partnership and your estate is worth less than your threshold, any unused amount can be added to your partner’s threshold when you die. This means their threshold can be as much as £1 million.

Working out how much inheritance tax you have to pay can get confusing. If you want a quick estimate of how much tax your estate may be liable to, using an online tool such as the Which? inheritance tax calculator can be helpful. If you do have inheritance tax to pay then it may be worth speaking to your financial adviser about ways in which you can carefully reduce the size of your estate by gifting money or through the use of trusts.

Gifting money to loved ones can be hugely rewarding and there are lots of alternative options to simply handing over a cheque. You can invest into a pension for a child, or open an investment account to help pay for university fees or a deposit for a first home. You can make significant improvements to your adult children lives too, such as gifting them an ISA or paying off a proportion of their mortgage loan. Some gifts that you give while you’re alive may be taxed after your death. Depending on when you gave the gift, ‘taper relief’ might mean the Inheritance Tax charged on the gift is less than 40%.

Planning ahead

Whether your estate is in the millions like Daniel Craig, or is a more modest size, our independent financial advisers at Furnley House can help you prepare your financial plan and work with your solicitor. Whether you plan to spend your wealth, donate it to charity or gift it to loved ones, our team of independent financial advisers can help. To find out more call Furnley House on 0116 269 6311 or email info@furnleyhouse.co.uk

 

 

Past performance is not a reliable indicator of future performance.

The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

 

 

Sources

https://www.gov.uk/inheritance-tax

https://www.gov.uk/inheritance-tax/passing-on-home

https://www.which.co.uk/money/tax/tax-calculators/inheritance-tax-calculator-a9llq2b2xnqn

https://www.gov.uk/inheritance-tax/gifts