Next-gen at the helm: managing wealth, relationships and risk

The world of private wealth is undergoing a generational shift. Today’s next generation,  globally mobile, digitally fluent and guided by clearer values, are preparing to inherit not only significant assets, but also the responsibility of stewarding them across borders, blended families and increasingly complex structures.

This demographic expects transparency, flexibility and well‑coordinated advice. Yet many of the classic pressure points remain: divorce, incapacity, second marriages, international parenthood and post‑death disputes. They now arise in more nuanced ways, often requiring early, cross‑disciplinary input from family law, private client, immigration, Court of Protection, and contentious private client specialists.

What follows is a practical guide to some of the key legal dynamics shaping wealth transfer for modern, and next-gen families.

Family law and intergenerational wealth

Nuptial settlements: why structures can still be exposed

For families seeking to preserve multi‑generational wealth, the financial impact of divorce is often underestimated. Trusts and wealth‑holding vehicles are a powerful part of family governance, but they can be vulnerable if they are connected to a marriage. Under section 24(1)(c) of the Matrimonial Causes Act 1973, where a trust benefits a spouse or current/future children, the family court may treat it as a nuptial settlement, giving it the power to adjust the structure on divorce. This is the case notwithstanding that its original purpose may have been to safeguard family wealth. This risk applies across a spectrum: from longstanding offshore structures to vehicles created during a relationship.

Nuptial agreements: certainty through transparency

Nuptial agreements have become a central tool for families wishing to provide clarity around future wealth distribution, and are frequently encouraged by family matriarchs and patriarchs. Whilst the next generation may be concerned to keep inherited wealth private, attempts to shield inherited wealth from disclosure can undermine the agreement and the very protections families seek: namely, from redistribution on divorce. Fairness and transparency at the time the nuptial agreement is entered into, requiring full and frank disclosure of assets, liabilities, and income, is therefore critical.

At present, nuptial agreements are influential but not legally binding, with the court retaining ultimate discretion to disregard any arrangement it considers unfair. Proposed reforms may introduce fully enforceable ‘qualifying nuptial agreements’: contracts that would be fully enforceable provided they follow a prescribed format. But, as things stand, parties do not have the power to curtail judicial discretion over asset division.

Therefore, whilst nuptial agreements that satisfy the three stage test in Radmacher v Granatino [2010] UKSC 42 will, in principle, carry weight, they nonetheless fall short of providing the degree of certainty often sought by next‑generation couples and by older family members wishing to preserve family wealth.

Cross‑border marriages: one relationship, multiple legal systems

International pre-nuptial agreements introduce an additional layer of complexity. An agreement that carries weight in England and Wales may have little or no effect elsewhere (and vice versa), and factors such as residence, domicile and the location of assets all influence international enforceability. Where parties have connections to multiple jurisdictions specialist cross-border advice is essential to ensure the agreement is enforceable internationally.

Modern families: parenthood, surrogacy, and global mobility

Surrogacy

Many UK families now pursue surrogacy overseas, particularly in the United States. The legal process in England and Wales, however, remains distinct: the surrogate is always the legal mother at birth, and intended parents must obtain a parental order within six months of the child’s birth to transfer legal parenthood and parental responsibility.

When surrogacy takes place abroad, delays frequently arise due to immigration requirements. Ensuring that the child can lawfully enter the UK, and that their long‑term status as a British citizen is secure, is therefore crucial to a smooth parental order process.

Same‑sex families

Same‑sex couples may face additional challenges where their relationship, or the non‑genetic parent’s status, is not recognised by the country in which their child is born. This can disrupt nationality applications, future travel and relocation plans. Taking early, integrated family law and immigration advice reduces the risk of families becoming stranded and minimises subsequent nationality or travel difficulties for the child.

Global mobility and immigration

It is increasingly common for HNW individuals and next-gen families to have international connections. However, citizenship and residence entitlements do not always automatically align with how families live.

A child born abroad to a British citizen by descent does not automatically acquire British citizenship. Registration may be possible if the British parent has completed a continuous three‑year period of UK residence before the child’s birth; otherwise, the family may need to relocate to the UK for at least three years before the child becomes eligible to register. Families should therefore seek advice before a child’s birth wherever possible.

A non‑British spouse relocating to the UK typically follows a five‑year route to indefinite leave to remain, after which they may be eligible for British citizenship if the marriage is ongoing. Timing, documentary evidence, and financial requirements must be aligned with the family’s wider plans, including property purchases, schooling and tax considerations.

Managing wealth across generations

Next‑gen family members often want to play an active role in shaping family strategy. But where the older generation remains both alive and capacious, they retain full legal autonomy. This can lead to tension within family governance, particularly where values or priorities differ.

Early dialogue and legally robust planning can ease the eventual transition of responsibilities, reducing the risk of disputes or emergency interventions later.

Supporting vulnerable relatives: key legal considerations

Beyond wealth management, the next generation is increasingly taking on responsibility for protecting vulnerable family members. This may include arranging appropriate care, overseeing financial decisions, and intervening when capacity concerns arise. A clear understanding of the legal framework, particularly in relation to lasting powers of attorney, deputyship, and best‑interests decision‑making, is essential. Key considerations include:

• Capacity is decision‑specific: Under the Mental Capacity Act 2005, capacity is assessed for each decision individually. A person may manage basic finances but lack the understanding needed for a significant transaction, a will, or even marriage. Where capacity exists, their autonomy must be respected, even if their choices conflict with next‑gen preferences.
• LPAs vs deputyship: Lasting powers of attorney offer flexibility and continuity. If incapacity arises without an LPA, a deputyship application to the Court of Protection becomes necessary, and this is typically more costly, slower and administratively burdensome compared to attorney-managed affairs.
• Gifting and tax planning: Attorneys operate under strict limits. The Office of the Public Guardian permits attorneys to make limited gifts without specific court authority, in the case of customary occasions and charitable donations. Larger gifts or tax‑motivated planning require court approval and are examined closely for reasonableness.
• Care home fees: Local authorities can also challenge gifts made with the intention of reducing care fees. While it is entirely understandable that the next generation may wish to protect future inheritances, local authorities will examine substantial transfers of wealth closely. If they determine that a gift was made primarily to reduce assets for the purpose of care fee assessments, the value of that gift can still be treated as forming part of the estate. To reduce this risk, the next generation should keep clear records showing that any gifts were made for genuine and legitimate planning reasons rather than with the intention of depriving assets.
• Why early planning matters: Taking proactive steps, such as putting LPAs in place while the individual still has capacity and clearly documenting their wishes, can significantly reduce future tension. Early preparation allows advisors to help the next generation anticipate potential issues and approach future challenges with confidence. Establishing a clear gifting history and recording tax‑planning intentions while the older generation has capacity can also provide valuable evidence if decisions later need to be made in their best interests. These measures not only protect personal autonomy but also give the next generation a structured roadmap for managing wealth transitions smoothly, helping to minimise the risk of disputes and avoid unnecessary delays and costs.

• Planning for vulnerable next‑gen beneficiaries: Some next‑gen family members have lifelong support needs or depend on means‑tested benefits. This may arise, for example, where they have suffered a brain injury at birth. Inheriting outright can disrupt that support, trigger deputyship needs and cause deprivation-of-capital complications. Disabled persons trusts or carefully managed discretionary trusts can preserve financial protection without causing adverse consequences. Clear letters of wishes plan an important role in guiding future decision‑making.

Family disputes: preventing problems before they arise

Second marriages and blended families can bring joy, but also complexity. Without careful planning, tension between a surviving spouse and adult children from previous relationships can easily evolve into a dispute after death if not addressed early.

• Remarriage, revoked wills, and 1975 Act claims: Under English law, a marriage automatically revokes an existing will unless that will expressly anticipates the marriage. If the will is not refreshed, the default legal entitlement of the new spouse may override the expectations of adult children. This often runs counter to the wishes of the deceased, and children from a first marriage may ultimately find themselves having to pursue their entitlement through court to achieve a fair outcome.Where a will (or the intestacy rules) fails to provide reasonable financial provision, spouses, former spouses, children and some dependants can bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975. Courts often balance the housing and maintenance needs of the surviving spouse against adult children’s expectations. Mediation is common when these issues arise, and almost always leads to resolution, but this can follow months of cost and strain. Strict time limits also apply, and next generations must be aware that 1975 Act claims generally must be brought within six months of probate being granted.
• The Bank of Mum and Dad – promises and proprietary estoppel: Financial help from parents, contributing to deposits, building annexes, or providing homes, is often accompanied by informal assurances such as ‘you’ll always have a place here’, particularly for HNW and UHNW families. Problems arise when legal ownership remains with the older generation and they later change their will to favour a new spouse from a second marriage.
  Disappointed children from a first marriage may turn to proprietary estoppel, arguing that:

1. a promise was made – that they would enjoy an ownership right or long-term security over the property;
2. they relied on it – for example, investing money, labour, or relocating;
3. they suffered detriment as a result – such as expenditure, lost opportunities, or unpaid care; and
4. it would be unconscionable and inequitable for that promise not to be honoured.Clear documentation of any assurances and contributions dramatically reduces the risk of disputes in these circumstances. Wills should be updated regularly, particularly after remarriage or major life events such as the formation of blended families, to ensure they reflect current wishes. Divorce does not automatically revoke a will, but a new marriage does, so advice is critical whenever circumstances change.

Where meaningful wealth is being transferred within families or through generations, trusts or written agreements should be considered to provide clarity and legal protection.

Next‑gen individuals concerned about arrangements following a parent’s death should seek advice immediately, given the tight time limits for many claims and the benefits of early mediation, both for the preservation of family relationships and financial resources.

Conclusion

For the next generation, proactive planning is no longer a luxury; it is essential. Thinking internationally, documenting intentions clearly, and coordinating advice across disciplines helps protect vulnerable family members, preserve relationships, and ensure a smooth and purposeful transition of wealth and responsibility.

Our private wealth sector brings together specialists in family law, private client, immigration, Court of Protection and contentious private client work. We are expertly equipped to support next‑gen families as they navigate modern relationships, international mobility, intergenerational asset stewardship and the challenges of caring for vulnerable relatives, seamlessly combining expertise across disciplines.

If you would like tailored advice on any of the topics discussed above, please get in touch. We would be delighted to help.