A National Savings and Investment survey back in 2011 revealed widespread ignorance within families about future inheritance plans. The survey indicated that only 7% of people had spoken to their parents about inheritance. Today, seemingly that statistic remains unchanged.
One of the most important parts of planning to leave an inheritance is to talk about it. This is obviously not an easy topic and it is believed that the major obstacle to families discussing inheritance issues is embarrassment. But it may be a good idea to set aside some specific family time to have this discussion because it should be remembered that the consequences of ignoring inheritance planning can be considerably more damaging to family harmony and finances in the long run than any short lived period of embarrassment.
The most efficient way to prepare for this discussion is planning. Take some time to think about your priorities for your money after you are gone. This could include things like making sure your partner or spouse is provided for, donating to a charity that is important to you, caring for a relative that is ill or has a disability, or making sure your grandchildren have the best possible opportunity of a good education. It may help to write down these priorities so that you have a basic draft of the Will you want to leave. This will help a discussion with your family go more smoothly than if you don’t have a clear idea of what you are looking to achieve.
Remember that your inheritance wishes are solely your decision and no one else can tell you what to put in your Will. During the meeting with your family, try to outline what you want to achieve and your reasons, rather than the exact sums involved. This will help your family understand your specific goals and could reduce any potential disagreement. They may also have some relevant input into the management of your estate and it is worth taking on board their expectations and opinions with regard to your assets and possessions.
You can also reassure them that nothing is set in stone as many things could happen between this discussion and the end of your life, and you can amend your Will to reflect this. This conversation can give you the foundation to adequately prepare your Will knowing you have taken your loved ones’ wishes and expectations on board.
As part of your inheritance planning, it is a good idea to talk to your Brunsdon Financial Advisor about Inheritance Tax Mitigation. Mitigation ensures you have done everything you can legally do to pay the minimum amount of tax. There are a number of ways of reducing tax on your inheritance and your Brunsdon Adviser will be able to inform you and advise on the options to suit your personal circumstances.
But still the most important aspect of this difficult subject is to a have an honest, open dialogue with the people that are important to you to help prepare them as best you can for the future after you are gone.
Sources:
https://news-view.co.uk/talking-will-dont-one-7/
http://www.sleeblackwell.co.uk/legal-articles/the-importance-of-good-family-communications-in-avoiding-inheritance-disputes
Please note that this information is for guidance only and does not constitute personal advice. Any information provided in this article regarding tax treatment or legislation is based on our understanding of current UK legislation law, tax law and HM Revenue and Customs practice (March 2018), all of which may be subject to change. The FCA does not regulate tax advice. Brunsdon is not responsible for the content of external web sites.
