For families, the start of a new year presents a natural time to discuss and share plans for the future. Here, our experts detail the three conversations around wealth, planning and purpose that could benefit every family as they look ahead.
Family governance
– Stuart May, Coutts Philanthropy & Family Wealth Specialist
The beginning of the year is a great time to take stock but really the challenges faced by wealthy families are evergreen and there’s no bad time to have a conversation around family governance. Ultimately, at the heart of the discussion is a conversation about what the family wealth is for. The answer may feel obvious but unless you are communicating and building a shared consensus, different family members and generations may hold differing ideas and concepts of responsibility.
Every family has unique dynamics, so it’s important to have a shared goal: turning wealth into an opportunity without falling foul of cautionary tropes. That might start with looking at the immediate landscape for tax and wealth planning, perhaps being aware of the changes to agricultural and business tax relief due in April 2026, or to forthcoming changes to pension contributions and property taxes. Adapting to near-term change is important, but you also need to have agreed, long-term goals that cross and unite each generation.
A family charter can be invaluable here. This enables generations who may never meet to maintain the shared purpose agreed for their wealth. This can establish what the family agree is fair and how need is assessed. Is money passed on solely for education or property? What does a purposeful role look like – earning for further growth, following a passion or providing for those less fortunate? How is the family home ‘split’ between multiple children and their partners?
For assets such as a family business, a charter could be instrumental in protecting longevity and growth potential – for example by setting out how those within the business are remunerated and how those outside of it may still benefit through agreed structures.
Equally, inheritance is a perennial issue when it comes to wealth. Through prudent family governance you can make clear where everyone stands and remove any ambiguity. The start of the year is a great time to look at wills and ensure everyone is on the same page to plan appropriately. Sadly, too many family disagreements come from incompleteness in a will or unexpected decisions that are only revealed following a death.
Succession doesn’t have to be a pressured reckoning moment. By building a roadmap together, families can be clear in what’s expected and be prepared when it comes to dealing with the unexpected. Education, motivation and spouses can be some of the biggest questions and potential friction points but families shouldn’t be afraid to address them collectively and in good time – especially in the context of preparing the next generation for wealth.
Your family and their future – How we’re helping guide families like yours
Your legacy and passing on to the next generation
– Stuart May, Coutts Philanthropy & Family Wealth Specialist
Again, consensus is invaluable. For parents, make sure you and your partner agree on how to talk about wealth with your children and when to pass it on. Children need to know what the main purpose of the wealth they receive is for – and what it isn’t for. They also need to know that they can ask questions and share their own ideas. Having these conversations now and keeping up a healthy dialogue can prevent the knowledge gaps that could lead to younger family members being exploited when they do come into wealth.
A great way to provide the next generation with the skills and knowledge to manage wealth could be to introduce them to charitable or philanthropic ventures so they can experience the value and responsibility of money in a social context. As they grow older, family members can then understand the world of investments and markets by managing ISAs. When they reach adulthood, it can then make sense to introduce them to the family charter, so they understand their role and the values behind it. This prepares them to take full responsibility for managing the family’s wealth and ensuring its growth and continuity.
Coutts clients and their children can benefit from our financial education programme – Collab By Coutts. The programme seeks to both ground and inspire younger family members through workshops with guest speakers and Coutts specialists, alongside educating them about investing, real estate, entrepreneurialism and social impact. Collab can also help them build up a network of peers in similar circumstances and join an alumni community. To find out more about Collab By Coutts, please speak to your Private Banker. Criteria apply.
Please note, the value of investments and the income from them can fall as well as rise, and you may not recover the amount of your original investment.
Assessing your investment strategy
– Michael Crisp, Coutts Financial Planning Specialist Team Leader
A new year provides the perfect opportunity to assess and review your financial situation and your goals as a family. Your current outlook may be based on your current state of health and prosperity. However, it is only good sense to consider arrangements should the worst happen. Agreeing your will, lasting power of attorney and protection / life insurance, and sharing this with your family could help ensure that if the most unfortunate of circumstances does arise, they are at least financially well placed.
Conversation is just as important as legal documentation. As a family, agreeing on your asset strategy, knowing where your investments are held, their timeframes and purpose, can serve to unite expectations for your wealth. You’ll also be able to plan your expenditure, assess your liquidity needs and stay flexible enough to balance this against the arrival of new family members or other key life events.
As certain as the changing seasons is tax. January is a great time to look at maximising your allowances for parents, children and grandchildren through pensions, ISAs, lifetime ISAs (LISAs) and junior ISAs (JISAs) – especially as these have the potential to provide returns over time.
We often discuss tax wrapper diversification with families at this time of year as we know changes could be made to allowances in the future. So, making sure your family is aware of the tax-free allowances available and where to utilise these can be valuable. Changes to inheritance tax and the business owners’ and agricultural asset owners’ relief may require specific planning. In line with this are family considerations on passing down investments and gifting outside of inheritance which may involve a conversation to agree when and how to sell or liquidate assets.
You and your family should never feel like there are financial matters that can’t be addressed. Coutts has been helping families for over 300 years and although you may feel you are encountering an unprecedented situation, our experts are not. Our range of services and experience in financial planning for families means we’re able to help them plan for today and the future in confidence. We’re ready to have a conversation whenever you are.
If you’d like to find out more about how we could support you with these conversations and establish longevity in your wealth as a family, please speak to your Private Banker to learn more about the services we offer.
Build a wealth strategy
We're here to help, but please be aware that we cannot offer any tax advice. We recommend you contact an independent tax advisor to discuss your personal tax situation.
Tax reliefs referred to are those applying under current legislation which may change. The availability and value of any tax reliefs will depend on your individual circumstances.
