The hidden emotional challenges of gifting assets during your lifetime

Passing assets to your loved ones during yourlifetime could have many benefits. Yet, that doesn’t mean it’s simple, and youmight experience emotional challenges even if you’re sure it’s the right thingto do in your circumstances.

According to an FTAdviser article (29 July 2026), 7 in 10 people believe financial support should begiven 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 whenyour loved ones could benefit the most, a living legacy means you could see theimpact your gift has.

Another reason gifting during your lifetime isgrowing in popularity is that it could be useful from an Inheritance Tax (IHT)perspective. Not all gifts are immediately outside your estate when calculatingIHT. However, some gifts may fall outside your estate for IHT purposes if yousurvive for seven years after making them.

As a result, passing on assets earlier in yourlife could reduce a potential IHT bill.

Despite the benefits, it’s normal to havemisgivings about passing on assets. Here are three emotional challengesbenefactors might face.

3 emotional challenges and how financialplanning could help

1. You’re worried gifting assets could affectyour long-term financial security

Even if you’re confident in your finances, youmay worry about how your circumstances could change in different scenarios.

You might worry that gifting assets now couldcompromise your financial security if an unexpected event occurred. Indeed, theFTAdviser article notes that 37% of respondents said the risk of running out ofmoney was the biggest barrier to providing financial support.

Having a cashflow model could ease yourconcerns. A cashflow model can illustrate how your financial position couldchange over your lifetime based on different decisions you make.

So, if you’re thinking about gifting assetsnow, you might review how this would affect your long-term finances. You canmodel unexpected events too, such as how gifting assets and then experiencing ahigh unexpected cost or a period of market volatility might affect you.

You should note that the results of a cashflowmodel depend on the data entered and the assumptions used. As a result, theycannot be guaranteed.

However, being able to visualise the impact ofdifferent scenarios on your financial security could provide peace of mind orhighlight potential risks before you proceed.

2. You’re concerned about how the beneficiarywill use the gift

You’ve worked hard during your life to becomefinancially secure, and giving up control of assets might feel daunting. Whatif your loved one uses the gift differently from how you intended?

Working with a financial planner could helpyou explore your options.

One option would be to involve yourbeneficiaries in relevant parts of your estate-planning discussions. This couldallow you to state how you’d like them to use the gift and help them understandits financial implications.

Another option might be to establish a trust.Some trusts allow you to set out conditions about how and when the assets areto be used.

Trusts are a legal arrangement, and you maynot be able to remove assets once they’ve been placed in a trust. Seeking bothlegal and financial advice could help you assess whether using a trust is theright choice for you and your beneficiaries.

3. You suspect gifting assets might lead todifficult discussions about your estate plan

Passing on your assets during your lifetimeoften leads to wider discussions about your estate plan, such as the contentsof your will or your wishes if you need care later in life. Some people maydelay deciding because they find these topics difficult to discuss.

These conversations can be challenging, butthey’re often important. Working with a financial planner can help you considerpractical points and prepare you for talking to your loved ones.

Contact us

As your financial planner, we could help youassess different options for passing on wealth to your loved ones and providereassurance if you’re concerned about the implications. Please get in touch totalk 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 ofwriting and is subject to change in the future.

The Financial Conduct Authority does notregulate cashflow modelling, trusts, or estate planning.

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