A new study reveals more than half of wealthy Britons have not spoken to loved ones about inheritance plans. 1 in 5 six-figure earners surveyed said their wealth came from running their own business, which begs the question, are small business owners also keeping their wills a secret?
- A large number (42%) have made no will; 1 in 10 say they have no plans to do so
- A third have sought professional advice to avoid inheritance taxes
Most wealthy Britons prefer not to share their inheritance plans with their families. That’s according to a new study that found that 54% of respondents had not spoken to loved ones about plans to pass on wealth. More than two-fifths (42%) had not yet made a will, though 17% were planning to do so in 2023, according to Brown Shipley, the Quintet Private Bank that commissioned the study.
1 in 5 six-figure earners said their wealth came from running their own business.
The report indicated that large numbers of wealthy people are now consulting wealth management professionals, with almost a third (32%) saying they had reviewed their plans to make sure money was passed on in a tax-efficient way.
What is the UK tax-free inheritance allowance?
The current tax-free inheritance allowance is £325,000, while a £175,000 nil-rate band applies to homes passed to children or grandchildren. However, gifts made in the last seven years of someone’s life are exempt.
Brown Shipley’s annual wealth report found that nearly two-thirds (63%) of respondents who lived in homes valued at £500k or more owned their properties outright.
And 1 in 5 six-figure earners said their wealth came from running their own business.
Rebecca Williams, Head of Wealth Planning at Brown Shipley, said: “Speaking to loved ones about estate planning and your will can be uncomfortable, but it can help provide clarity and prove beneficial to long-term family dynamics.”
Those wealthy individuals who put off making a will may find their wealth isn’t passed on in the way they wish, or that their loved ones might have expected. There are decisions that individuals can make now that can have a positive impact on how loved ones will benefit – in the near term and over time.Rebecca Williams, Head of Wealth Planning at Brown Shipley
Williams said it was encouraging that many people are taking action to pass their wealth on efficiently and consulting a professional adviser to do so.
“This can help ensure wider plans and timing for passing on wealth are taken into account, while also ensuring that the most tax-efficient structures are in place,” she said.
Reasons why a will might be contested
1. The will was not properly executed, meaning it was not witnessed or notarised
2. The testator (the person who made the will) was not of sound mind at the time the will was written
3. The testator was coerced into signing the will
4. The will was forged
5. The testator was unduly influenced by someone else when writing the will
6. The testator did not have knowledge of the contents of the will when signing it.
7. A later will was written that conflicts with the earlier will
8. The beneficiaries of the will are not the people the testator intended to benefit
Other common reasons for will disputes
This information is intended solely for information purposes and should not be used to make financial decisions.