For many, the lockdown has been fantastic, an opportunity to spend more time with loved ones and rekindle some long-forgotten romance. For others, it’s been far less harmonious which could cause a spike in the divorce rate, this has been backed up by new research by Handelsbanken Wealth Management.
The wealth management company recently commissioned a new study and found that almost three-quarters of adults (73%) believed that the lockdown would trigger a significant rise in the divorce rate.
When you think about this, it’s not entirely surprising. If you’re not used to spending a large amount of your time around your loved ones, it can be a shock to the system and emotions will run higher than usual. Sadly, this extra time together does cause people to reassess their lives and this sometimes results in a parting of the ways.
Parents also seem to have noticed the dangers which are causing them to delay their own estate planning. More parents are now looking at their children’s marriages and are fearing; they will end in divorce. The research discovered that over two-thirds (67%) had delayed family inheritance planning fearing assets could leave the family estate.
In fact, a quarter (27%) of parents have little or no confidence about the prospects of their children’s marriages lasting a lifetime, and one in six (16%) have doubts about their in-law’s financial competence. The findings show that these worries are not unsubstantiated, with more than one in four parents (27%) having children who are separated or divorced.
To avoid substantial wealth leaving the family in the event of a divorce, a fifth of parents (21%) are gifting small amounts to their children to help with day to day living, while 19% are gifting directly to their grandchildren.
Parents have other reasons for restricting levels of financial support; 13% of parents say it will reduce their children’s incentive to work, and 12% think there would be little left for their grandchildren.
Christine Ross, Head of Private Office (North) & Client Director at Handelsbanken Wealth Management says: “The emotional and financial pressures of an enforced lockdown have tested many marriages and sadly for some, it will be the final straw.
It is not unusual for parents to disapprove of their children’s choice of partner, but they can be equally reluctant to interfere in case they cause a family rift.
“Parents who are pessimistic about their children’s marriages are approaching us for advice on how to prevent assets from leaving the family for good. This often results in parents favouring small financial gifts over lump sums, and in some cases setting up discretionary trusts. In times like these, it’s important for advice to be sought, especially when it concerns safeguarding the financial well-being of different individuals within a family.”
Read more finance-related articles in our dedicated section here.