Millions of Brits are sleepwalking into costly estate planning mistakes that could hit them with unexpected tax bills and financial complications, financial experts have warned.
Common Misconceptions
According to financial advisers, one of the biggest misconceptions is that estate planning is only relevant for the wealthy or elderly. In reality, almost everyone with property, savings, pensions, or children should be thinking about it far earlier.
A common problem is that many people either never write a will at all or fail to update one after major life events such as marriage, divorce, having children, or buying property. Others wrongly assume their assets will automatically pass to the people they intended, only for loved ones to discover complicated legal issues after death.
Looming Inheritance Tax Changes
Experts also warn that looming inheritance tax (IHT) changes from April 2027, when pensions are expected to become part of estates for IHT purposes, could make poor planning significantly more expensive for families in the years ahead.
Perhaps most concerningly, advisers say the vast majority of people simply avoid the topic altogether because it feels uncomfortable, complicated, or something that can always be dealt with later. But delaying important decisions around wills, powers of attorney, pensions, and gifting strategies can leave families facing serious emotional and financial consequences at precisely the worst possible time.
Expert Advice
Speaking to Newspage, Rebecca Robertson, Independent Financial Adviser, Planner and Director at Evolution Financial Planning, said: 'The two most common mistakes I see are married couples assuming all assets go to each other and non-married couples not considering what will happen without a will, which can be a major issue for women without any personal assets.'
'The majority of people like to hope for the best and, only when they have to deal with a family's estate when someone has passed away, do they realise the complexity of it all. One milestone when people do recognise they need a will is when they have children, but this is generally at a time when finances are straightforward.'
'Often over time the will becomes old and out of date. Again only years later when they are dealing with another family member or they come across an issue, will they act. If they haven't, they have missed an opportunity.'
'This is going to be even more important post-April 2027, when pensions become part of the estate.'
