Passing assets to your loved ones during your lifetime could have many benefits. Yet, that doesn’t mean it’s simple, and you might experience emotional challenges even if you’re sure it’s the right thing to do in your circumstances.
According to an FTAdviser article (29 July 2026), 7 in 10 people believe financial support should be given to beneficiaries early when it could make the biggest difference. Just 8% of people believe wealth should mainly pass on after death.
As well as potentially providing support when your loved ones could benefit the most, a living legacy means you could see the impact your gift has.
Another reason gifting during your lifetime is growing in popularity is that it could be useful from an Inheritance Tax (IHT) perspective. Not all gifts are immediately outside of your estate when calculating IHT. However, some gifts may fall outside your estate for IHT purposes if you survive for seven years after making them.
As a result, passing on assets earlier in your life could reduce a potential IHT bill.
Despite the benefits, it’s normal to have misgivings about passing on assets. Indeed, here are three emotional challenges benefactors might face.
3 emotional challenges and how financial planning could help
1. You’re worried gifting assets could affect your long-term financial security
Even if you’re confident in your finances, you may worry about how your circumstances could change in different scenarios.
You might worry that gifting assets now could compromise your financial security if an unexpected event occurred. Indeed, the FTAdviser article notes that 37% said the risk of running out of money was the biggest barrier to providing financial support.
Having a cashflow model could ease your concerns. A cashflow model can illustrate how your financial position could change over your lifetime based on different decisions you make.
So, if you’re thinking about gifting assets now, you might review how this would affect your long-term finances. You can model unexpected events too, such as how gifting assets and then experiencing a high unexpected cost or a period of market volatility might affect you.
You should note that the results of a cashflow model depend on the data entered and the assumptions used. As a result, they cannot be guaranteed.
However, being able to visualise the impact of different scenarios on your financial security could provide peace of mind or highlight potential risks before you proceed.
2. You’re concerned about how the beneficiary will use the gift
You’ve worked hard during your life to become financially secure, and giving up control of assets might feel daunting. What if your loved one uses the gift differently from how you intended?
Working with a financial planner could help you explore your options.
One option would be to involve your beneficiaries in relevant parts of your estate-planning discussions. This could allow you to state how you’d like them to use the gift and help them understand the financial implications of the gift.
Another option might be to establish a trust. Some trusts allow you to set out conditions about how and when the assets are to be used.
Trusts are a legal arrangement, and you may not be able to remove assets once they’ve been placed in a trust. Seeking both legal and financial advice could help you assess whether using a trust is the right choice for both you and your beneficiaries.
3. Gifting assets might lead to difficult discussions about your estate plan
Passing on your assets during your lifetime often leads to wider discussions about your estate plan, such as the contents of your will or your wishes if you need care later in life. Some people may delay deciding because they find these topics difficult to discuss.
These conversations can be challenging, but they’re often important. Working with a financial planner can help you consider practical points and prepare you for talking to your loved ones.
Contact us
As your financial planner, we could help you assess different options for passing on wealth to your loved ones and provide reassurance if you’re concerned about the implications of passing on your wealth. Please get in touch to talk about your estate plan.
Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
The Financial Conduct Authority does not regulate cashflow modelling, trusts, or estate planning.
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