Inheritance research finds over half of Brits shy away from 'taboo' topic
Only 14 per cent of respondents planned to instruct a probate solicitor
Research commissioned by legal financing company, Ampla Finance, has revealed that although over half of all Brits (57 per cent) rely on the prospect of inheritance, almost half (44 per cent) had not discussed the topic with parents, guardians or partners.
The YouGov survey questioned 2136 respondents on their understanding of probate, their experiences of having discussions with family about finances after death, and the use to which they would put an inheritance.
For 57 per cent of Brits, inheritance was not seen as a windfall, but as a ‘key financial pillar’ which they planned to use to bolster essential savings, pay bills, clear personal debt or help fund a house deposit.
Partner and head of private capital at DWF's Manchester office, Christopher Noel, said it was “concerning” that so many are relying on an inheritance as a ‘financial pillar’ and that this was “clearly dangerous for a number of reasons”.
“Firstly, the best inheritance tax planning is of course to spend the inheritance, so there may not be much left for the next generation in some cases, particularly if care home fees become an issue.
“Secondly, under English law, people are pretty much free to leave their estates to whoever they want, whether that's family members, carers or charities. People change their mind.”
He added: “We've certainly seen a growth in contentious estate cases over the last few years, as ‘disappointed’ or ‘disinherited’ beneficiaries look to challenge wills. If a significant proportion of people have expectations of an inheritance, that trend is almost certainly set to continue.
“Again, we often advise clients on likely claims and how best to mitigate any such risks – openness in the family is often a good place to start, so there are no unpleasant (for some beneficiaries!) surprises after death."
Almost half (44 per cent) of respondents with a parent, guardian or partner they depend on financially, knew little about the status of their benefactor’s finances, and only 11 per cent with a parent or guardian knew details about their parents ‘wider finances’, such as loans.
Noel said he was “not surprised” by the conclusion of the report that financial matters are a ‘taboo topic’ in many families, “…in my experience, clients differ greatly in their approach to financial matters on death and their willingness to discuss it with family or even their advisers.”
Responses to the survey also suggested that the pandemic had not led to a change in attitude, with only 12 per cent opting to review their will or funeral arrangements since the outbreak. Noel said his team encourages clients to start thinking about wills and estate planning as soon as possible, and that they should be invited to revisit arrangements every few years or so or after an important life or family event.
The research suggested a lack of awareness around family finances and the probate process. Only 11 per cent with a parent or guardian reported that they had ‘enough understanding’ to complete the probate process. Despite this, only 14 per cent intended to appoint a solicitor to undertake the process on their behalf.
Noel commented on the importance of ensuring clients know support is available, and this can be facilitated firm-wide, “Our private capital team works closely with our corporate team in advising business owners, management teams post-private equity deal and so on and we try and get people thinking about these topics before it's too late!
“Getting a private client lawyer involved in advance of any deal should be seen as essential – it's never too early to start planning and to get that peace of mind. We're lucky to be able to deal with the corporate and personal work all under one roof. Getting proper and joined-up advice is absolutely key and we're fortunate here in that we can provide a full service to entrepreneurs, business owners, directors and shareholders.”
Steve Gauke, head of partnerships at Ampla Finance, commented: “The UK probate system is notoriously complicated and increasingly slow-moving, and the lack of knowledge around its workings evidenced in this whitepaper shows that this can catch many people out.
“Unforeseen delays can badly impact a family’s financial planning, so we need greater education around probate and to encourage a frank conversation on family finances, even though we know it’s difficult.”
Louise Hall, commercial director at Ampla Finance, said: “We are pleased to have started a productive conversation on what has long been perceived as a taboo topic in the UK, and underscored the importance of initiating these sensitive discussions to save further stress at an already testing time for families.
“Our hope is that this report goes some way toward encouraging individuals to tackle the hard conversations, ahead of the difficult situation where probate is necessary.”
The full report, with further statistical analysis, is available to view here.