10 surprising estate planning facts and why they matter to you

Inheritance and estate planning can feel like problems for another day, far in the future. But the unexpected can strike at any time and you’ll want to be ready when it does.

Estate planning should be built into your financial strategy from the outset, not tacked on as an afterthought. And yet, many of us are still failing to act.

Keep reading for 10 estate planning facts that might just persuade you to look again at your inheritance and legacy.

1. Half of UK adults don’t have a will

Today’s Wills and Probate recently confirmed that nearly half (49%) of UK adults don’t have a will in place. Nearly a quarter of over-30s who plan to write one suggested that they’d likely prioritise watching TV.

A will, though, is the simplest way to ensure your wishes on death are known. Put one in place now and remember that life events can change your priorities. Check in with it regularly to make sure it still aligns with your wishes.

2. More than half of Brits have never discussed inheritance with their family

A recent report by the Personal Investment Management and Financial Advice Association (PIMFA), suggests that 58% of Brits have never discussed inheritance with their family. The problem is worse among the baby boomer generation, where the figure rises to 63%.

Communicating your wishes to those affected can help prepare them, financially and emotionally, and could go some way to avoiding disputes after you’re gone.

This is especially important if you’re among the 43% (according to MoneyAge) who plan to split wealth unevenly between their children.

3. Inheritance disputes in England and Wales reach record highs

A recent report in the Guardian confirms that there could be as many as 10,000 disputed wills in England and Wales each year.

Recent increases are being blamed on DIY wills, the increased number of blended families (more on which later) and a rise in dementia cases, which has led to worries about coercion.

4. Only 12% of people with a will include their digital assets

Nearly all of us (around 95%) own digital assets. These might be in the form of physical devices like phones and laptops, or soft assets like photos and social media accounts.

And yet just 12% of UK adults have thought to include digital assets in their wills. Be sure to add your digital assets now.

5. Your pension can play a key role in your estate plan but 70% of Brits haven’t completed an expression of wish form

Back in 2022, MoneyAge reported that 70% of UK adults haven’t completed an expression of wish form. This is used to appoint beneficiaries to your pension via your pension provider (rather than through your will).

Under current rules, your beneficiaries can receive the proceeds of your unused pension tax-free, if you die before the age of 75. On death after 75, the proceeds will be taxed at your beneficiary’s marginal rate.

6. The Treasury’s IHT receipts are set to soar, reaching £9.7 billion by 2028

With the nil-rate band and the residence nil-rate band both frozen until at least 2028, the government’s Inheritance Tax (IHT) take has soared over the last couple of years.

According to MoneyAge, more than £560 million was collected in February 2024 alone. FTAdviser meanwhile, states that receipts could rise to a staggering £9.7 billion by the 2028/29 tax year.

Frozen thresholds mean that more families will be affected over the next four years so be sure to factor this into your plans.

7. Gifting exemptions can lower the value of your estate but they’re often underused

The Telegraph confirms that only 430 families made use of the “gifts from regular income” exemption in 2022.

It allows you to make regular IHT-free gifts to loved ones, if you can prove the gift is regular, from income, and doesn’t leave you financially worse off.

This HMRC exemption is one of several that allow you to gift tax-efficiently during your lifetime, lowering the value of your estate while allowing you to see the joy your inheritance brings to your beneficiaries.

8. More than 5 million over-55s don’t know if their estates will be taxed

Despite rising IHT receipts, around a quarter of those over 55 don’t know if their estate would be liable to IHT. According to Canada Life, this amounts to around 5.2 million people.

Starting your estate planning early gives you plenty of time to calculate a potential liability and act to mitigate a charge.

9. Estate planning can be harder for blended families

Professional Adviser recently confirmed that nearly half (47%) of blended families haven’t updated their will following important life events like a marriage, divorce, or the birth of a child.

The Department for Work and Pensions (DWP) estimates that there were approximately 2.5 million separated families in Great Britain in 2022.

These blended families – usually couples with step-children and children they have had together – are most likely to struggle with estate plans with will disputes higher too. A will is vital here as the laws of intestacy (for those who die without a will in place) don’t recognise the rights of step-children or non-married partners.

10. Funeral costs are at record highs

A recent Sunlife ‘Cost of Dying Report 2024’ confirms that a basic UK funeral now costs £4,141 (a 4.7% rise compared to 2023). The overall cost of dying has also increased (by 5%) to a record high of around £9,600.

Factoring funeral costs into your estate planning gives you peace of mind and reduces stress for those you leave behind, at what will be an already difficult time.

Get in touch

If you have any concerns about your current estate plan or a potential IHT liability, speak to us now. Please contact us at info@janesmithfinancial.com or call 01234 713131.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change. The Financial Conduct Authority does not regulate estate planning, tax planning, or will writing.

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