Inter-Generational Financial Planning

Many young people in Ireland today find that saving money into a pension or even buying a house is not a realistic proposition without the assistance of their parents.

Much of the wealth in Ireland has been created relatively recently and certainly in the last 50 years. Therefore, many families don’t have experience of wealth and estate planning or taking care of their heirs financially.

Equally, the younger generation of today face challenges that simply were not a consideration for our parents’ generation. They benefited from gold-plated final salary pensions, free education, roaring stock and housing markets, falling interest rates and negligible inflation for decades.

Contrast that with the challenges of today – unaffordable housing, roaring inflation, and rising interest rates, not to mention the potential havoc of climate change and increasing political instability relative to the last 50 years.

For some young people today, without parental assistance, the choices are to either buy a house, have a family, or save for the future. For many people it’s not possible to do more than one of these well.

Inter-generational financial planning can help both generations. Should your parents or grandparents be in a position to help you financially it can be prudent to discuss receiving your inheritance before they pass away. Receiving a cash lump sum by way of a gift or a loan, when you’re younger, to purchase a house, start a business or upskill, can arguably be more beneficial than receiving it later in life.

Having these conversations with family can be difficult and awkward out of context. We can facilitate these conversations as part of your financial planning, and we specialise in inter-generational wealth planning. For more information on inheritance tax exemptions and rates see Revenue here.

It’s also worth noting the small gift exemption that’s available to everyone. Should your parents, grandparents or other relatives wish to help you with pension payments or other expenses, they can use the small gift exemption to give you €3,000 each per calendar year.

Please see our guide to Estate Planning for further details.

If you’d like to discuss your personal financial journey with us, you can book a 30-minute discovery call directly with one of our advisors.