Inheritance Tax  

How to manage estates more effectively

  • Explain how will writing be made more accessible to consumers
  • Explain the importance of trusts
  • Identify benefits of wills for families
CPD
Approx.30min

Trusts are another useful tool for individuals to create a more tax-effective will. These allow people to set money aside to support a beneficiary outside of their estate (for example, to contribute towards university fees), meaning that they are exempt from IHT. 

Evidently, there are plenty of financial, as well as emotional benefits for individuals to get to grips with writing a well. The key, however, will be for industry leaders and advisers to effectively communicate this to clients. 

Changing behaviours

As is the case with any behavioural change, it will take a collective effort from various stakeholders to ensure that clients are all aware of the benefits of having a valid will in place. 

Firstly, various bodies, such as The Society of Will Writers, Solicitors Regulation Authority, the legal Ombudsman and the Legal Services Board should commit to improving consumer access to will-related information – namely, what individuals stand to gain from having one, and the potential complications that might arise due to intestacy rules.

Likewise, these bodies should also ensure that individuals understand where they can go to receive help or guidance when it comes to creating their will. 

That said, some onus should also be placed on the financial services sector to encourage clients to manage their estate more effectively.

For example, regulatory bodies should be more proactive in promoting a will as a tax-effective method of managing their assets and investments once the individual in question has died. 

Likewise, independent financial advisers should look to incorporate estate management into their tailored financial advice to clients, where appropriate.

This could be as simple as asking a client if they already had, or were considering creating a will, and whether they require any assistance.

Doing so would be a positive step to gently plant the seed that clients should begin thinking about creating a will, as a valid part of their personal finance management. 

In addition to industry encouragement, the process of writing a will must be made as simple as possible for clients.

Similar to many aspects of personal financial management, many consumers are likely to be put off engaging with their will because they fear the process is too complicated.

As such, advisers, both financial and legal, should do what they can to remove the burden from the client and take on most of the ‘heavy lifting’ on their behalf. 

Of course, only the client will be able to assess their assets.

However, qualified will writers will be able to take on the bulk of the technical requirements to create a valid will and, where appropriate, make the necessary recommendations, such as the use of gifts or trusts, to ensure that the clients are able to create a tax-effective will, which will benefit all their intended beneficiaries.