UK millionaires failing to protect £1 trillion wealth
Britain's millionaires are not being proactive enough when it comes to protecting their wealth for future generations, according to a new report by private bank and wealth manager Coutts.
Over the next twenty years, £1 trillion will be passed down from one generation to the next but many parents are failing to protect their wealth or prepare their children for the pitfalls and responsibilities of wealth, the report stated.
After collating the views of 270 millionaires - those with at least £1 million in liquid assets –the survey revealed that while one third (37 percent) admitted to suffering serious conflict within the family when it came to dividing up the money and assets, over half (58 percent) did not have an up-to-date will in place.
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Nearly half of millionaires' can't even decide how to divide up their estate between heirs, the survey said.
The report also shows that one fifth of parents were keeping their true wealth a secret from their children over fears it will quash any aspirations they may have, or protect them from inadvertently revealing too much information to people who may then befriend them "for the wrong reasons".
The rise of social media and publicly available information has increased parents' concerns, but barely a quarter of parents said they would consider insisting on or even raising the idea of a prenuptial agreement to inheritors, despite divorce rates of 42 percent in the U.K.
Known as the "Queen's Bank," Coutts is the private banking arm of the Royal Bank of Scotland and is renowned for its affluent clients.
It recommended one "simple yet effective strategy of preserving the family wealth": opening up discussions within the family on the various risks that could arise in the future, such as divorce, and to agree how they should be dealt with.
The executive director at Coutts warned that the U.K.'s increasingly fragmented family structures, due to divorce and re-marriage, which made planning for inheritance a cause for potential conflict.
"Our research shows that unless there is a clear plan and open communication about the succession process, family members can feel frightened and frustrated about how the family assets and money are divided following the death of both parents," Juliette Johnson said.
"This is already an emotional time – and can so easily lead to conflict, which in some instances can split families and cause long-term damage."
- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt