The minister is wrong: you shouldn't leave your money to your grandchildren

It may seem like a wise approach, but it could leave everyone worse off

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Inheritance should skip a generation, according to housing minister Gavin Barwell. He apparently said his own mother will be leaving her estate to her grandchildren rather to him and his brother, and he wants other people to follow her example. However, what he didn't mention is that this kind of approach can be fraught with issues and in some cases can even destroy families.

In theory, the idea is sensible. If people in their 80s can see that their 50-year-old children are doing well for themselves, they might choose to leave their money to their grandchildren - in their 20s - instead. They may be struggling with student debts or unable to save to get onto the housing ladder, and an inheritance could ensure each generation has the opportunity to be as financially secure as the one that came before.

Dangerous

There are, however, three problems with this approach. The first is that those 50-somethings may not be as financially secure as their parents think. A recent study by First4lawyers discovered that 41% of those who had either been left out of a will or received less than expected said they had been relying on the inheritance, so the upset left them in financial difficulties.

Another study, by LV= showed that millions of people are relying on a cash windfall from an elderly relative. Without it, a fifth will not have the comfortable retirement they were hoping for, while a quarter will end up having to work on later in life in order to make ends meet. After all, we don't all have generous public sector pensions like Gavin Barwell.

Even if your offspring are financially secure enough not to need an inheritance, there are still risks posed by the fact it is such an emotive issue. Heather Roberts, a contentious probate solicitor at the law firm Stephensons, said: "While the government's suggestion might have noble intentions, there is a very real prospect that inheritance which skips a generation could lead to disagreements between family members." The First4lawyers study found that 49% of those affected by an unfair will no longer speak to their family because of it.

Finally, if you don't do it right, the whole issue could end up in a court. Roberts explains: "Under the Inheritance (Provision for Family and Dependants) Act 1975, children who feel they have not been sufficiently provided for by their parent's estate can contest the will in order to secure the inheritance they believe they are entitled to."

"We could see instances of parents taking legal action against their own children in order to secure any money or assets. In my experience, inheritance disputes – particularly those between immediate family – rarely end amicably and can be incredibly costly for all concerned."

What should you do?

So while Barwell's suggestion may make a great deal of sense on paper - and may work for some families - for others it could end up leaving everyone worse off.

The only way to know whether it would be right for you, is to talk to your family. If you ask your offspring whether they think it would be a good idea - instead of telling them - then you can deal with any issues, and decide on the best approach for you and your family.