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financial support given by living parents to their children or grandchildren as an alternative to leaving an inheritance to them after they die
'"Pre-heritance" makes canny parents generous … A combination of high house prices and 40% inheritance tax is prompting the over-55s to give financial support to children to help them purchase a home of their own, rather than leaving them an inheritance which could be subject to inheritance tax.'Citywire 12th September 2004
'In total, almost 82 per cent of over-55s (8.6 million) with children and/or grandchildren, have stated that they would rather give a 'pre-heritance' than leave an inheritance to their offspring.'www.cashquestions.com 10th September 2004
it seems that parents are increasingly beginning to recognize the advantages of giving financial support to their offspring at a time when they really need it, thereby also potentially avoiding the pitfalls of inheritance tax
In the autumn of 2004, research by a leading UK insurance company revealed that the tradition of leaving an inheritance to children or grandchildren was destined to become a thing of the past. Amid speculation that parents and grandparents would in the future be more likely to give financial support to their offspring whilst still alive, a new term in financial commentary emerged: pre-heritance.
According to a national survey in the UK, 82% of people over 55 said they would prefer to give financial support to their children or grandchildren before they die. 44% said they would consider releasing equity from their homes in order to give their children or grandchildren the finances necessary to buy their first house or to cover the cost of weddings or education. It seems that parents are increasingly beginning to recognize the advantages of giving financial support to their offspring at a time when they really need it, thereby also potentially avoiding the pitfalls of inheritance tax, tax paid on inherited money or property. The term pre-heritance, also sometimes written preheritance, has filled the gap in the lexicon as a description of this growing trend. It predominantly occurs in the uncountable form, although by analogy with the noun inheritance there is some evidence for countable use, as illustrated in the second citation above. There is to date no evidence for the use of related verb and adjective forms pre-herit or pre-herited, though these may emerge in the future.
The term pre-heritance has been formed by blending the prefix pre-, meaning 'before', and a contracted form of the noun inheritance. In forming the new word, the noun inheritance has been subject to the process of what linguists would call clipping. Clipped forms usually result from removal of the end of a longer word, such as the form ad or advert from the noun advertisement, but occasionally examples occur, as here, where the beginning of the word (in-) is removed. In some cases, clipped forms become more frequently used than the words on which they were based, as for example plane as a clipped form of aeroplane or airplane. The word inheritance has its origins in Anglo-Norman French enheritaunce, which means 'being admitted as heir'.
This article was first published on 23rd May 2005.