However, the wealth manager’s survey also found that, while the vast majority would trust their spouse to distribute the wealth, the challenge comes when there is a divorce and remarriage – a scenario that is on the rise.
Nearly half (48%) of the parents surveyed were concerned about how wealth would be distributed to their children if their spouse remarried.
The firm commissioned a survey of 480 UK adults who are over 40 and married with children, to discuss the distribution of their children’s wealth.
Rachael Griffin, tax and financial planning expert at Quilter, said: “Complex families are increasingly the norm and with that has come a rise in the number of estate disputes ending up in court.”
One way to safeguard a child’s inheritance is to set up a trust. Trusts are a legal arrangement that ring-fences money for future distribution to stated beneficiaries. If a surviving spouse remarries then a trust protects the wealth, ensuring it remains in place for the intended beneficiaries.
According to the survey, 36% of parents would consider trust planning to help ensure their wealth is protected for the benefit of their children, with a further 41% saying they may be interested in trust planning.
These responses show that there may be a demand for trust planning, said Quilter, despite the UK government’s recent consultation on the “outdated nature” of trust taxation.
Griffin added: “It’s vital the government consider how trusts fit in modern day society and their consultation reflects their current usage.
“Trusts date back centuries, which means at first glance some people may think they are legal structures that are now irrelevant for most people in modern-day society.
“However, this couldn’t be further from the truth. In fact trusts may be having a renaissance.”