Roughly a quarter (27 per cent) of those aged 45 plus with enough assets to trigger a potential inheritance bill have sought professional advice on the matter, according to research from Canada Life.
The insurer's survey of 1,001 UK consumers aged 45 plus with total assets exceeding £325,000 found the most common estate planning tool was writing a will (used by 73 per cent), taking out life insurance (37 per cent), gifting money (21 per cent) and setting up a trust (13 per cent).
A total of 43 per cent expected to leave an inheritance of more than £500,000 and one in 10 would leave an inheritance of £1m or more.
The survey also recorded the least popular estate planning tools.
A total of 46 per cent said they would never take out life insurance as part of their estate planning and nearly three quarters said they didn’t see the need to use life insurance.
Karen Stacey, head of technical services at Canada Life, said this suggested a lack of understanding of how life insurance can be a successful estate planning tool.
Four out of 10 said they had no intention of using a trust, with a popular objection being that it would be too time consuming or complicated.
Ms Stacey said such perceptions were common and that greater education is needed from professional advisers.
“There is a strong relationship between the lack of understanding of simple estate planning tools by the wealthy and the lack of take up of financial advice.
"The low use of even very simple estate planning tools shows the important role financial advisers have to play in educating potential clients on every aspect of the estate planning process.”
Kim Barrett, proprietor at Barrett's Financial Solutions, said the findings highlighted the important work advisers do, a fact he felt the FCA was not doing enough to promote.
"The FCA should be running a campaign to illuminate the need for good advice and the fact that there are some good advisers out there," he said.
david.rowley@ft.com
