Happy families: How to prepare for the ‘Great Stuff Transfer’
As wealth begins to change hands, so do the assets — both sentimental and valuable — that go with it
Baby Boomers, described by Allianz as “likely to be the richest generation that has ever lived”, are expected to pass down an estimated £5.5 trillion in assets to Gen Xers and Millennials in the UK. But it’s not just money that younger generations will be inheriting. There are also physical possessions that will need to change hands.
This has been dubbed the ‘Great Stuff Transfer’. It encompasses everything from books, sculptures and vinyl records to fine china, heirlooms and keepsakes. Some of these may be extremely valuable, while others might be worthless but hold a lot of sentimental value.
HSBC Private Bank highlighted the potential impact of the Great Stuff Transfer in its Collectibles: Having purpose and passion report, released last month. Aik-Ping Ng, the bank’s head of family and philanthropy advisory for the Asia Pacific region, explained that many families may have had informal discussions about who should inherit certain assets, especially art, but have never really set their decisions in stone.
“Where valuable collections are concerned, the need for conversations, let alone concrete decisions, is sometimes not recognised as readily as it is for other types of assets and may therefore not be considered at all,” Ng wrote.
Avoiding division between family members
A big reason that stuff is often overlooked in inheritance planning is that certain items can be a sore point, and families may refrain from having discussions about their possessions simply to avoid friction. David Lillywhite, partner at family and private wealth law firm Burgess Mee, has experience dealing with high-value financial disputes, and tells Luxury London that watches are “a classic flashpoint”.
Watches are typically gifted at milestones like birthdays, weddings, or anniversaries. In cases where a timepiece has appreciated in value by the time it’s handed down, some heirs may want to keep it in the family – because no amount of value can match what it means to them. Others may be less emotionally attached to it and would be happy to sell to raise capital. This is where things can escalate.
Unlike liquid assets, which can be shared evenly and cleanly, physical possessions can be harder to break down in a way that satisfies all parties. As Lillywhite puts it: “You can’t split a watch down the middle the way you can a bank account.”
In the scenario where a watch is part of a collection, it might be possible to divide the collection into equal parts, but even this runs the risk that splitting it up will destroy the value of each individual timepiece.
Why conversations can prevent misunderstandings
Families that expect a mountain of stuff to be passed down in the coming years need to take action to prevent future financial and emotional fallout. “A grandfather’s watch, a wine cellar, inherited jewellery, art acquired during a marriage, or furniture from a childhood home may all have financial value. The real dispute is often about memory, identity, and personal history,” says Yasmin Khan-Gunns, family senior associate at Keystone Law. “The best time to deal with these items is before emotions are running high.”
Laura Bywater, partner at JMW Solicitors, which specialises in succession planning and wealth protection, echoes this. She stresses the need to “be clear about your wishes and intentions during your lifetime to help avoid misunderstandings and unmet expectations further down the line – expectations that can be particularly difficult for loved ones to reconcile with at times of grief.”
Parents should also not presume that their children will want to keep the stuff they themselves treasure. Take brown furniture and silver platters, for example. Parents may have happily kept them when they were first passed down, but changing tastes in decor and style mean the majority of Millennials and younger generations are unlikely to want to inherit anything antiquated.
“Open, honest conversations while you’re still here to have them are invaluable,” says Bywater. These discussions should cover which items really matter and which don’t, thus separating the practical from the sentimental. “Understanding those personal attachments in advance can make the eventual distribution feel far more considered and far less contentious.”
How to avoid a courtroom battle
Any discussions should ideally be supported by a formal letter of wishes, advises Bywater. This document should set out each item, its sentimental significance, and the reasons why it will be kept, sold or discarded. “Not only does this provide clarity, it also preserves the story behind each piece for future generations,” she explains.
When items are the subject of dispute, Khan-Gunns recommends her clients create a spreadsheet of the items with valuations and photographs. Family members should then take turns to select the pieces they wish to retain. This process may not be glamorous, but “it’s usually far better than forcing the sale of items whose value is emotional as much as financial”.
Taking these steps should ensure that the Great Stuff Transfer goes smoothly, but, if things do hit an impasse, Khan-Gunns says that families should appoint a mediator who “can help narrow the dispute”. Arbitration is another option that “offers a discreet and efficient route to a legally binding decision without turning deeply personal possessions into a courtroom battle.”
Sorting through a lifetime’s worth of stuff can be a daunting task, but cataloguing and having those important conversations early can help keep family members happy. It can also ensure that children aren’t left to deal with their parents’ clutter.
