Any mention of inheritance taxes in a Monevator article invariably produces heat in the blog’s comments. One reason may be that few of us are talking about inheritance in real-life.
Of course if you grew up in landed circumstances – strolling across the lower fields as your father waved his cane across your future realm whilst reassuring you that the family plantation in Barbados, the table at Annabel’s, and his collection of Nazi memorabilia would be all yours to – then your mileage may vary.
But in my (infinitely more limited) experience, talking about inheritance is mostly done in a jokey way.
Well, except in a few specific circumstances I’ll get to below.
And it seems my experience is pretty normal. According to Canada Life’s new report on the impact of longer lifespans, when it comes to talking about inheritance, everyone is NOT at it.
In its survey, the financial services giant found fewer than half of would-be bequeathers have discussed their wishes with the potential beneficiaries.
Although happily this number rises to 60% for those with children:
Source: Canada Life
I think it’s revealing that the ‘let’s talk about it’ figure rises slightly for adults with stepchildren.
Because in my experience this set-up – perhaps not surprisingly – is one of the few reliable triggers for The Discussion.
Talking about inheritance: when and why
For many people who might expect something when their parents shuffle off, only a big life event puts the topic of inheritance properly on the table.
Again, I’m not talking about the fortunate tier who’ve been passing down wealth for generations.
Nor those with very wealthy self-made parents. Entrepreneurs seem to take inheritance super seriously. I suppose they see it as an extension of a lifetime of financial achievement.
Rather I’m thinking of a typical aging middle-class couple who own a nice house inflated by 30 years of house price gains – but not much else in the way of riches outside of pensions.
Heir-raising conversations
After sufficient drinks – or maybe a nasty remortgaging shock – friends of mine born to such doughty stock have sometimes bemoaned their parents’ reluctance to broach the subject of inheritance.
“My parents wave their hands about ‘popping their clogs’ and threaten to spend the lot on cruises and skiing holidays,” a friend might begin. “But they never go skiing! They just buy ambitiously small trees from the garden centre and send money to that Smile charity or ActionAid. Presumably they hoard the rest.”
Already fearing this is sounding too mercenary, they typically continue: “I wouldn’t mind if they spent all the money on having fun, obviously. It’s their money. But they won’t spend it all – unless God forbid one goes into care. And then there’s the house, which must be worth a small fortune.”
Before, finally, the kicker…
“If I knew what I might be in-line for then to be honest it would really help us balance the books today. Because we could be making sacrifices for nothing – paying down the mortgage, not moving somewhere bigger, and Susan staying in that job she hates – only to end up with £250,000 in the bank that we can’t do much more with than give to our kids ourselves.”
Obviously every family and conversation is different.
But that’s the gist. A modestly life-changing sum of money may or may not arrive in anything from five to 20 years or more.
Realistically, nobody can model that, except for the parricide-curious.
Talking about it won’t usually make the timings much more concrete, either.
However having a proper conversation certainly wouldn’t hurt. It could prompt earlier and more substantial gifting, for instance. Or deeper investigations into mitigating inheritance tax.
Long-time readers will know that I’d whack up inheritance tax if I was the Chancellor.
But most of you wouldn’t, and I’m not the Chancellor anyway.
So my best advice to you as your friendly money friend on the Internet is simply to talk about it sooner rather than later, if you expect to receive a large legacy.
Because if you do end up facing unexpected inheritance tax charges, then by that point it will be too late to do much about it.
When people start to discuss their legacy
If you’re traipsing back from visiting your eldery parents every month wondering when they’ll finally take the subject of inheritance seriously, I’ve got bad news.
In my experience it usually requires something dramatic to shock people out of their complacency and ready them to confront their mortality.
I’ve noticed inheritance conversations come up after:
The death of one parent – Not something most of us would wish for. But it does focus the mind. (Generally overly-focusses. Be sensitive!)
Serious illness – A cancer diagnosis will usually get a parent to realise they’re not immortal. Again, horrible for all concerned. Although some will continue in denial anyway. Perhaps they feel that admitting to the possibility of death gives license to the rogue cells multiplying in their body. Who can blame them?
Divorce, remarriage, and stepchildren – I’ve noticed parents can get really edgy about passing on wealth to children with partners who enter their lives late. I’ve even seen this persist after stepchildren became seemingly beloved members of the family. It must spring from the atavistic urges at the heart of the inheritance tax conflict – supporting your selfish genes over others.
More charitably, parents may be wary of seeing their offspring and descendants diddled by feckless new partners. Especially if the end of a child’s previous marriage left them on high alert.
Til death do us impart
Yearning for your parents to talk about inheritance may be a classic example of be careful what you wish for.
But you don’t need to be Carl Jung or Sigmund Freud to understand why such shocks can bring talking about inheritance into the open.
Brooding on your own mortality can be fun when you’re 19 and mooning around graveyards quoting The Smiths to your first oh-so-serious girlfriend. (Or was that just me?)
But it’s much less fun when you’re into the second half of your life.
You’ve seen friends and family go. The mirror doesn’t lie and nor does your passport or your doctor.
So you prefer to look the other way and put your fingers in your ears.
It’s the same denial of reality that puts people off making a will.
From the Canada Life research:
Source: Canada Life
Those are pretty shocking figures. But we can’t help feeling that inviting death into the room might encourage him to stay.
Nobody wants the Grim Reaper casting around for candidates to promote up the running order.
Similarly, thinking about your children firing up a spreadsheet to calculate what you’ll be worth when you’re gone isn’t usually what motivates people to have children. It isn’t the sort of thing we like to think about or plan for.
It’s also easy to see how a new spouse who comes with kids from an out-of-sight – and often openly disparaged – former partner will raise suspicions.
They never included this bit in the Disney fairy tales. Only in those gruesome old German ones where somebody ends up getting eaten by their offspring. Or worse!
Primal scream
For related reasons, I’d suggest stressful life events can be bad times to actually make decisions about inheritance. Or any other big commitments for that matter. Even if they can be much-needed starting points.
Emotions are running high. Rationality is often dialled down to a tick-over level.
I was once called in as the family’s putative financial consigliere to look in on a relative after her husband died.
This new widow was telling people she’d have to sell her little bungalow and move into some kind of care facility because (a) she wasn’t long for this world and (b) she couldn’t afford to live in her existing home now he was gone anyway.
This was surprising to me and everyone else because (a) she’d barely seen a doctor in 30 years and was only 70 and (b) he was an assiduous saver and partner who had surely foreseen the probability of his passing before his wife.
Of course it turned out she was well provided for by her husband’s modified but ongoing final salary pension. More than a decade later, she still enjoys pottering around the garden of that same house.
When I spoke to her about it last Christmas she barely recalled her worries back then.
Grief can make anyone a little mad for a while.
And so though an unfortunate life turn that leads to important discussions taking place is better than never talking about it at all, please leave the heavy lifting for sunnier days if you can.
You can go your own way
Of course we can all see that it’s better to talk about these things ASAP, at least in theory.
Parents get time to investigate tax mitigation strategies if they want or need to.
And it’s easier for potential recipients to plan if they know whether they should reasonably expect a windfall in the future.
But a final reason is better peace of mind – for all parties – after having these fraught discussions:
Source: Canada Life
There’s oodles of research showing that feeling you have a purpose and that you’re in control improves your quality of life.
We usually think about this with respect to our job or savings.
But it seems it’s equally true of knowing where your money will go after you die.
Readers! As a blogger of fairly humble origins who doesn’t have kids, most of my thoughts about inheritance come from observation rather than lived experience. So I’d love to hear from parents and children who have struggled – or not – in talking about inheritance. Let us know how you’re doing in the comments below. In the future I’ll update this article with your insights. Also, let’s keep the politics of inheritance taxes out of this thread. They’ll only derail the subject at hand. Thank you!
Good article and possibly timely should the budget introduce or signal significant IHT reforms.
Speaking personally I’ve only got much more idea since I helped my mum with my dad’s estate. All the same I’m not counting any chickens and any inheritance still falls into the “buffer” element of my personal financial plan should I truly experience dire SORR etc. While my dad was still alive there was a distinct possibility he’d have needed care and while it feels like the chances are materially lower with my mother, one can’t rule out that “living to 100 but no longer independent” scenario.
I guess I’d be pretty miffed if her estate ended up being dragged into IHT (after modest earning careers for her and my dad) but she isn’t spending what she has coming in via her plus spousal survivor pension. I’m trying to encourage at least annual gifting and spending directly on grandkids costs. Ultimately it’s them who’ll really benefit from any inheritance should things work as planned for myself and brother.
We’re probably too late to reliably depend on a 7 year rule for any big giveaways etc anyway.
@all — Unfortunately I just had to delete a political comment about inheritance tax (although happily the poster concerned has taken it well and may reformulate and repost anon).
If you’d like to discuss the politics, please do so on the Saturday’s still-lively Weekend Reading thread about the Budget:
https://monevator.com/weekend-reading-if-someone-asks-you-to-be-chancellor-say-no-thank-you/
We won’t get a good and open conversation about discussing inheritance going if adherents to the either side of the taxation argument are making their points here, hence the comment moderation heads-up on this thread.
Thanks for your understanding! 🙂
@The Investor – You wrote: “As a blogger of fairly humble origins who doesn’t have kids…” respectfully you could have stopped there. You (likely) received little inheritance, and you have no children/grandchildren to help, so you (likely) have no empathy for others who wish to help their families. What a shame.
I am currently full on decluttering and chucking a lifetime of junk, having had Covid for 3wks so this is a timely article, thank you. Slightly different for us in that we have no children. It may well be that one or both of us end up in a care home which will no doubt take care of any funds remaining after my efforts to travel the world in some degree of comfort.
An earlier article “Succession Plan” concentrated my mind in that we need to get cracking on a “file” of information for us and whoever sorts it all out at the final curtain. But choosing executors is proving to be a tad problematic, assorted nieces and nephews but quite honestly I don’t see any up to the task. So we have fallen at the first hurdle.
As a neighbour said to me, in certain respects your situation is more difficult than for those with children and grandchildren.
I haven’t answered the question but it will be interesting to read other readers comments.
Good article. My Dad NEVER talks about this stuff. My Mum died a long time ago and my Dad remarried 7 years later. At the time he said my sister and I would get everything, but this hasn’t been mentioned since. My sister is convinced he’s changed his will to give money to her daughters (we never see them, met them once at the wedding!) but I’m not so sure. That said, I’m living my financial life with zero expectation of receiving anything. I find it’s easier that way! I’m 49, still renting and saving for a deposit which in Scotland is tricky with the whole ‘offers over’ debacle so god knows when I’ll have enough to buy. That said, I’m very fortunate to have a well paid job and I’m paying a lot into my 12 yr old pension to make up for lost time. I speak openly with my nieces (I have no kids) that my pension and everything will be left to them, I just ask they don’t try to bump me off early to get it My Dad is old school and won’t talk about such things so only time will tell what happens. If I get anything it’ll be a bonus, that’s the way I look at things!
And if you can’t or don’t want to talk about it at least make a will, and if you are exercised about the results get a solicitor rather than a freebie from some charity (who expects to benefit, natch).
The solicitor’s job is to ask you some tough questions, the point of paying him is to make sure he’s on your side 😉
@BBBobbins
“We’re probably too late to reliably depend on a 7 year rule for any big giveaways etc anyway.”
Remember that there’s taper relief: currently, after three years the taxation rate starts to decline. See https://www.gov.uk/inheritance-tax/gifts#the-7-year-rule
@Jane > So we have fallen at the first hurdle.
It’s a possibility (and maybe common, I haven’t seen many wills but those I have all had this) to have the drafting solicitor as the executor of last resort.
If there’s a primary beneficiary then that beneficiary is the obvious choice. Except if there are descendant siblings, that’s a recipe for one hell of a fight, but this is not your problem.
@Jane, *someone* will have to sort out your stuff when you die. And even if you don’t think they are ‘up to the task’ (frankly, is anyone? We get, at most, a couple of such ‘opportunities’ in a lifetime) they will have to do it, even if you die intestate.
I suggest you look up who your beneficiaries are under intestacy laws. If that seems ok, then maybe ask them to be executors. If it doesn’t, then you’d better write a will and find an alternative. Friends, siblings? Or failing that an expensive professional.
@Curlew acknowledged and maybe the budget will provide sufficient impetus. She knows we will help out if she should need it, of our own violition, not gift with reservation of benefit. But as just this week I ended up being screamed at for suggesting that putting the Barclays app on her IPad might help manage her affairs (when Barclays have closed all presence in her town and barely seem to open in the nearest alternate and only I or my brother would use it with her), I am acutely aware that any actions around money paralyze her with fear.
It’s potentially one reason why IHT is unpopular and generates such visceral reactions as it’s a policy that forces us to have very uncomfortable discussions with loved ones, and if you don’t grasp the nettle then it may cost you dearly. I’m trying, but largely failing, in this department at the moment. Thought I’d had a breakthrough – but it came to naught. Very, very tricky indeed. Appreciate that’s not particularly helpful, more just empathetic.
Aged 78 as is wife so in the crosshairs!
Children (3) were told many times not to expect any inheritance as we had spent lots of time and cash educating them to a good level
All have good jobs,children of their own and are financially independent
Having said all that there will be some cash about- if we both don’t need care homes! – fees currently £50000+ pa per person
I am not making myself or my wife financially beholden to my kids as a divorce amongst the kids could result in asset demands from a non family member by birth divorcee etc etc
Again having said all the above the kids know exactly what we have-have all the requisite powers of attorney are in place -a will been set up with a equal split between the three and they are all executors
At the end of the day of course unforeseen stuff happens -all one can do is have a plan and then hang loose………
xxd09
Having very recently gone through the process of handling the loss of both parents, I can assure you 110% of this subject depends heavily on the personalities of the parents and emotions of one’s immediate family.
No need for details but I was rather surprised that no level headed thinking entered into our situation despite the high academic standards of those involved……
Perhaps inheritance isn’t the most important concern?
If I had one lesson from it, it was make your will clear, fair and well understood by all beneficiaries.
My parents are both mid 80s and living at home. My dad is a very organised person and has been on at me about this for some time. I know where documents are, I’m an executor of the will and I have POA if required together with another sibling. There won’t be much in the way of an estate, as they don’t own their house and there are 4 of us, if I get anything it will be more of a boiler replacement kind of sum rather than making any difference to my provisions.
We have had our wills in place since the birth of our children (and they need reviewed, which this article has prompted me to do, so thanks for that). I think its important when children are not of age to make your wishes known for guardianship in the event of premature parental deaths. They’re well past that stage now so I should make them the executors.
@Prometheus, sorry for your loss, anecdotal I know but it seems quite common in my experience that the second parent can follow on quite soon after the first one.
Both my parents died in the last six months. We found copies of their wills in the tin box in the wardrobe with instructions that my brother and I become executors. Even towards the end they didnt want to discuss their passing or the distribution of their estate. They had made the wills when they paid off their mortgage some 35 years ago. It almost seemed as though that was one chore they didnt want to discuss.
Being an executor is grinding work, I have been engaged on it for almost 6 months and the estate only just breached the probate rules.
I’m almost through it and believe its a privilege that they gave us, our last act for them.
What I would have liked, in the absence of any discussion, would have been an idea as to why they made the choices they did and what informed their decisions. I know that when they were here they would much rather talk about family, grandchildren, neighbours basically anything other than money.
I find I have the same reluctance to discuss inheritance with my kids, instead I keep an investment diary and an up to date “in the event of my death” note along with the spreadsheets etc. I know it helps me to sleep more easily
+1 for using a solicitor to draw up a will. It’s not that expensive and provides belt and braces assurance it’s correctly written and registered. Power of attorney is pretty straightforward to do yourself online – I did this about 10 years back (at 58-ish) and it’s about £82 for each type (financial and health). At the time the solicitor quoted £400 each for basically filling in the form for me online – yeah right. I refused, politely (through gritted teeth).
I’ve talk to my daughters about inheritance and they are not bothered if I don’t leave anything; their circumstances are pretty comfortable. EG I can’t afford to buy a small house where either of them live. Not that I’m badly off either – I sold two properties in the Midlands when I retired and I invested the whole proceeds and use that to fund renting in the town where my granddaughters live. Wouldn’t have known what to do about investing or had the confidence to act like this without resources about FI explaining this stuff, especially here at monevator.
One useful thing I discovered at the time I implemented this scheme was that you retain the ‘primary residence relief’, or whatever it’s called, for IHT if you do what I did and sell it. I’ve no idea how your executor (daughter #2 – the accountant) will prove this to HMRC but I’ve left a note in a document for them – but they’ve shown no enthusiasm to listen to me about this when I’ve brought it up.
I think having considered inheritance for my daughter’s and granddaughters has possibly been a factor in me not enthusiastically seeking a new partner after divorcing years ago. Doesn’t make any sense of course, especially as my daughter’s are unmotivated by receiving an inheritance. But I just don’t feel happy with the idea of remarrying then predeceasing a new partner whose estate then passes entirely to their children, as it most likely would, especially should she die intestate, a scenario mentioned by a poster above. Completely daft on my part, I’m willing to admit, but c’est la vie. I guess that little vignette may serve to illustrate the irrationality that surrounds discussions of inheritance.
Can’t comment on inheritance per se, but do have experience of the importance of wills and PoA.
My parents are in the ‘3rd generation curse’ category, so for the last 15+ years I have been trying to help them ‘stop making the same mistakes’ repeatedly! and survive on what they had left.
A difficult task that has led to some conflict and ill feeling.
5 years ago I persuaded them to update their wills and to get PoA, this whole process took about a year as –
1 – They didn’t see the point
2 – They struggled to understand what the PoA is
3- They wanted my older brother included
4 – They kept changing their minds
I will add here that the whole situation has not been helped by my alcoholic older brother who has been confusing them, coercing them for money
and stealing from them, for decades.
I will spare you the long long story……
However my Dad is now 90, with dementia and is in a care home. He is safe from harm and happy, which is what’s important.
My mother is 85 and has many care needs and is likely to go into a care home very soon.
My brother pickled his brain with vodka and has alcohol induced early dementia and is also in a care home.
The last 2 years have been somewhat hectic, had it not been for the PoA I dread to think how I would have coped with everything.
It has its limitations but it’s far better to have them in place than not.
One key point I learnt too late is that the PoA trumps a living spouse when it comes to decisions about the other spouse.
I did not know this, neither did the staff at the hospital who discharged my Dad into my mothers care, against my wishes, as I knew she would not be able to cope with his needs at home.
My Dad left hospital on the 27th Dec, without a care plan, without a social worker allocated to him, without any provision for rehab at home etc etc.
2 weeks later my mother almost had a breakdown because she couldn’t cope.
It took me 6 months, yes 6 months! to sort out that mess and get my dad the care package he needed.
If you are an attorney for someone and they lose capacity, be prepared for conflict as you battle to be their advocate and make the decisions that they would want you to make on their behalf.
It helps to do your research to know your rights, it appears health and social care professionals do not fully understand the PoA, or atleast many who I have come across don’t.
I agree with the DIY PoA suggestion, it’s easy to do and will save you hundreds of pounds.
@Sarah, that seems a little inappropriate.
In: (i) £25 from an aunt long ago. Blewed it. (ii) Some tens of thousands from parents decades ago. After many years I calculated what had become of it, inflating with the RPI index. Turned out I’d given it all to offspring for university costs, opening pensions, deposits on property. I tell myself that I’ve helped them become prosperous so they’ll be in a position to help support their mother if she needs it. I’m confident they would. I’ve also, I trust, helped them avoid financial stress thus adding to the gaiety of the nation. Good.
(iii) Several thousand recently. I wrote a deed of variation to pass it down the generations so they can invest it towards any cost-of-Mum bills or, in the first instance, cost-of-brats bills. Since we are much too old to look after the beloved brats if their parents die, the latter have arranged for friends to become guardians. Do not overlook this issue! (iv) Unless my wife dies first I don’t expect to inherit anything more. Ditto for my wife, mutatis mutandis.
Out: “Care”. Provisional guess based on family history: I’ll die cheaply and soon. My widow will live long and end up demented and in care. Our savings and, much more important, our house will have to pay for it. Will eventually need management by younger generation who are all abroad and unlikely to return.
And if I need care for any length of time while my wife survives? Tricky and also impossible to plan for. Perhaps my wife could borrow from the offspring, documenting the loan carefully.
It’s a great spity that one can’t buy insurance against the cost of care but one can’t so that’s that. It’s hardly surprising: any insurance company that tried would be permanently terrified of government interference that would ruin them. One can, however, buy an Immediate Needs Annuity. I’ve kept the offspring up to date on this.
+1 for using a lawyer to draft your will if you aren’t comfortable doing so. In a previous life as a trainee lawyer, I dealt with a file where the testatrix had used one of those WHSmith type wills and hadn’t specified the charities she wanted to benefit properly (i.e. she used a generic reference (for example, cancer research) and an incorrect name (e.g. heart foundation)) which meant that the modest legacy was mostly taken up by the costs of taking the matter to court to get approval to distribute the estate as we thought appropriate.
Also +1 for doing powers of attorney yourself. I’ve done mine, my mum’s and ones for a friend – v straightforward.
One quick follow up for the ones with a particular humour – as a trainee lawyer, I spent some time looking through an old textbook that had various old wills clauses in it. After discovering the following, I put it in my will and have included it in each of my wills since – makes me chuckle every time I read it:
“I DIRECT my Executors to take all necessary steps and for this purpose to employ and pay such doctors or other skilled persons as they in their absolute discretion may think proper for the purpose of ascertaining that I am in fact dead and not in any state having only the semblance of death in order so far as possible to avoid all risk of being cremated alive.”.
I can only assume the original drafter had been reading Romeo and Juliet…
Thanks @TI, this is a great thought provoking article and thread – especially as we know it’s a subject with a lot of baggage! The comments are a reminder that real life doesn’t work by spreadsheets.
We used a will writing service when the first children arrived and it was good value for a weird process. Neither of our parents own houses so we’ve never thought much about receiving inheritances. In the other direction it probably needs a bit of planning. As the finance person in the house I have at least finally written the “where is all the money” document following another excellent Monevator article.
Unfortunately this is a subject I’ve spent quite a bit of time considering. Dad died just before Covid struck, and with an estate that just teetered into probate territory it took me the best part of H1 2020 to deal with. When I finally got through to the helpline to chase the final decision after waiting for months (due to backlog), it was only then I felt I could properly grieve. Probably self inflicted, but you cope how you cope.
Fortunately Dad was very organised, which made things much easier, and my experience of this has led to a definitive step-by-step guide for my wife when I pop my clogs. This is equally for my peace of mind as well as to make it easier for her. I also have surprise pop quizzes (“STOP! I’ve died, what do you do first?” – she’s a very lucky girl).
Now as my mum’s defacto financial advisor (despite the fact she has an actual FA), we’ve had general discussions around inheritance and she is pretty sensible and open. The will is an even split between my sister and I but the sentimental ties for my sister to the family home (just a standard suburban house – nothing fancy) will make the unwinding of everything a bit more complicated. There is also the potential that my sister will eventually provide some care to mum, so I’ve broached the subject of maybe not splitting the assets quite so evenly in favour of her. Hopefully we’re a way off that, but I’m certainly of the mind that discussing it now will make it easier when that dark day arrives.
The key thing I’m having trouble with is the gifting during lifetime. My plan is starting a list detailing any gifts, however there are a few grey areas. For example, if mum wants to pay for a holiday for all of us, this likely has to go on the list. However (at the risk of sounding massively ungrateful), if we go essentially only because she wants a holiday, its not quite the same gift as giving us £2,000 in cash. First world problem to save a few pounds in IHT, I suppose, but it doesn’t quite feel fair that Tarquin gets to leave the shooting estate off of his list. Still, I try not to let this get in the way of being aware of just how fortunate I am and have been.
Final note, my wife and I used a charity will writing service and were really happy. As far as I can tell, it was exactly the same as going directly with the legal practise, only the charity gets money, and the law firm gets to bill hours as charitable donation. However our will was as vanilla as it gets (surviving spouse then even split between kids) so ymmv. Unless anything changes in the coming years the only other thing will be a PoA when the kids come of age. Right, where’s that dark room to lie down in…
@LALILULELO
AIUI regular expenditure out of income is always ok for IHT as it doesn’t deplete assets (and isn’t simply cash transfer to recipients). So I think I’d be a bit more relaxed about her paying for all the people she wants to join her on holiday. It’s not as if they end up with an asset.
I will not see 80 again but I’m hale and hearty, take no medication of any kind and am consistently told that I look at least thirty years younger than I actually am. I’m not now married. I do a forty minute yoga fitness routine every day. With the single exception of a “Chicken with a herb dressing” pizza on a Saturday, I am a pescatarian by choice.
I have four children, all now adults, and have had the different types of LPA in place for many years. I have also had my Will in place for many years. It nominates the oldest two of my children, in an age progression, as my executors.
Whilst I used a local firm of solicitors to draw up my Will, and they retain it for safe-keeping, I strongly advise against using solicitors as executors – call me a cynic if you wish but I think they sing a song as they travel to work, “The longer I take the more I make”.
My oldest child, the “lead executor”, knows the location of my Will and has a copy, and I have discussed it fully with them. I have also provided this child with a comprehensive, detailed, list of every possible thing (and its location if relevant), large small and minuscule, and financial and non-financial, that will require their action when I eventually take the long sleep. I keep this list up to date at all times, and notify them of any change as and when.
All my children know that unless none of them survive me, thus activating my nominated charity, my sole beneficiaries are my surviving children equally. They all have different personalities and stronger points but they didn’t choose their individual DNA, so it would be unfair to penalise them in any way.
I have purchased a plot for my burial in the village cemetry; £1,000, plus £50 for the small metal plate designating my ownership until I “take possession”. I have indicated in my Will the precise wording that I want on my gravestone. To my surprise and amusement, the grave digging is actually carried out by a small JCB rather than any sweat of the brow 🙂
I have provided for the lead executor, and recommend, a copy of “Probate – The guide to obtaining grant of probate and administrating an estate”, Gordon Bowley LLB, How To Books. The applicable law may change from time to time but the procedures rarely if ever do.
My wife (40s) and I have both kids (teens) and living parents (70s). I suspect like many readers, while our own affairs are just about in order, getting the parents to put in place LPA/Will has been an uphill struggle. Finances and inheritance is something that’s talked around rather than directly about in a very middle-class way. I’ve no idea if I’m listed as an executor for my parents, or what their wishes are. Fortunately the practical side of asset location has been addressed.
For my parents the assets should be straightforward, but for my wife’s it is going to be very complex: residency outside UK, assets and beneficiaries spread across multiple continents and not much confidence that we even know the extent of the estate or where (if) there is a Will or LPA. It’s a discussion that we’ve tried to have many times with little concrete progress. I shudder to think how we’re going to untangle it.
I’m impressed (if unsurprised given the readership!) at the level of preparedness shown in the comments here.
We’re very lucky that we neither need nor expect any inheritance for ourselves, and any I receive I expect to pass immediately to the next generation (as happened with my last remaining grandparent). I can see how generational wealth snowballs… With the cost of residential care and variability of how long it might last, if feels like planning on an inheritance would lead to disappointment.
+1 on getting a LPA done via online. We’ve just completed one for my sibling and it was much cheaper than the offer from a lawyer.
@17 Fi-FireFighter,
Had similar issues with parents, POA and care homes.
My father has a number of health issues inclusive of dementia and is well into his 80s. Last year he went into Hospital and it was clear that my mother could no longer cope with him and by a strange fate of bad luck was hospitalised herself and after 2 operations and a stay on intensive care is only now making a recovery. Whilst both were in Hospital I had several meetings with Social Services who wanted my father to return home on his discharge even tho there was nobody at home to look after him. Thankfully after a series of emails and fall outs with Social Services we were able to get my father in a care home. The POA did assist, however, trying to register it with my father’s bank was another obstacle I could have done without!
As I have no dependants, nor any other living relatives, my will leaves the major portion of my estate to charity. It also means that I have little choice but to appoint the solicitors as my executor. Having been the executor for my mother’s will, and to be honest I found this task quite therapeutic, I do worry how long and how expensive the task will become in their hands, not that I shall then be in any position to care!
Far more problematical, and something I have procrastinated about is an LPA. Again I was attorney for my mother and we were able to set this up online with no difficulty. In my own case, anyone I would trust to be my attorney is the same age or older than me, so not very suitable to appoint. I am particularly reluctant to appoint a professional attorney as I can see the costs particularly mounting in this situation.
Has anyone here had experience – good or bad – with professional attorneys?
Indeed, Monevator readers are ever-impressive. (I have occasionally wondered if I set this website up to make myself feel inadequate… 😉 )
Thanks for the excellent comments all. Not least given the painful circumstances in some instances. Appreciate what might have been a difficult share.
There are already lots of good insights here to update the article with real-world findings in the future, but please do keep the thoughts and experiences coming!
@DavidV #28 et al
If you have a nominated or preferred charity, then have a word with them if you are in a quandry or particular difficulty about choosing an executor and/or PoA donee/grantee. In my experience they are highly knowledgable and unfailingly helpful, and they clearly have an interest in keeping any associated costs to a minimum.
@all
See this helpful link https://www.gov.uk/when-someone-dies
@Sarah – He seems more switched on than people who do have dependents and arguably should know more about this stuff.
@LALILULELO – I’m a big MGS fan and your username jumped right out at me. Hi!
I’ve got a two year old daughter, and one of our in-laws deals with probate law, so she helped us get a will set up. I was keen on doing this as soon as we became parents should anything happen to us, and we assigned guardians as well. So yes, becoming a parent was definitely the trigger as we had never really considered it prior to that – the only similar thing I did do was ensure I took out life insurance when we mortgaged our house, so if I pop my clogs, the house is paid off.
I’m interested in the perspective of those older. Although I think I’ve got a reasonably prudent personal financial plan that should see me through most of the vicissititudes of later life I don’t think I’m likely to be in a position until mid 70s to know what I’ll be able to give away to possibly mitigate any potential IHT on my estate. Which is of course limits timeframe to do anything meaningful.
A lot still depends on unexpected costs coming up in the go-go years and indeed SOR vs inflation before I know what I will likely never need. I guess if I see portfolio soaring away while keeping annual spend to an enjoyable but not crazy level it will be a trigger to review earlier. [Should state that my base assumption is that I will outlive IHT exemption on SIPP pots or alternately end up with some sort of forced distribution].
A late response to an excellent post.
A definite up-vote for having the difficult conversation based on recent experience.
If you remember, in my “fire-side” chat, I talked about needing to leave a substantial legacy for my autistic son, and my hope that there would be enough left over for a good legacy for my younger son who lives in the USA. Several readers cautioned me not to assume that my youngest son understood the plans, and that I needed to have a proper discussion with him.
Well, at the end of September, we went over to California to spend time with our family there, specifically our 2.5-year-old granddaughter. In amongst doing all the fun things with them and catching up, I had ‘the conversation’ with my son. It went well. The interesting thing was that he did have some concerns about possible inheritance, but they were not the ones I expected. His main worry was what would happen to the family home? If my autistic son was involved in dealing with the estate, he feared that it would be impossible to sell the house because of resistance, and it would fall into decay. I was able to reassure him that it would be the responsibility of the executors to dispose of the house (assuming we still had it at death) and my autistic son would not be involved in managing or dividing up the estate. And he was perfectly happy with the first bite going to secure his brother’s future. We were also able to agree some immediate support from us to help with this complex and expensive part of their lives without making a substantial dent in our savings and investment. Not knowing our situation, he was reluctant to ask for any financial help, but money now would be much more useful to them than a promise of an inheritance at some point in the (hopefully) distant future.
So have ‘the discussion’. Your family may not understand what your estate might look like, how you want to dispose of it, and how you reach those decisions. Talking about your plans now may cause some resentment and upset, but major surprises after your death almost certain to divide the family.
And thank you to all those commenters on my fire-side chat who advised me to make sure my younger son understood our plans. I did it, and it helped.
@BBobbins, indeed. I am 71 and still have to balance the potential for another 20 odd years which may include care fees.
Today I went to a memorial service of a friend. Both he and his surviving spouse need/needed live in care. A decade ago they were pretty rich. Last week the widow had to set up an equity release plan on the house. Other properties, investments, everything now gone to care fees.
A few years ago a lady neighbour died after a few years needing live in care. £500k of investments gone, charge on the house, living in dire conditions.
Horror stories to me.
On another note I find it a bit ironic that comments on how to deal with inheritance seem to baulk at paying and establishing a relationship with a solicitor for the sake of the cost of drawing up a will and or POA’s. If you think you may be in a position to leave a substantial amount pay now for peace of mind.
We settled my father in laws estate a couple of years back. This involved gifts out of income, a trust and an estate that incurred £280k of IHT. The legal costs were not material and was money well spent.
I would hope that everyone reading this article would have a will and PoA in place. These could be more important even than reading excellent articles from Monevator.
Our local Indian restaurant was closed suddently for about 5 months recently because the (elderly) owner had died without writing a will. It was a costly business for her son to sort out and reapply for licences to operate etc.
Fortunately (we are in our late 70s) we were beneficiaries of both parents’s wills and they owned houses; we didn’t need the money so re-wrote the will in favour of our children. There is always the risk that these basic prudent measure are not appreciated by one’ offspring, so we paid for our children and their spouses to write their wills – a relatively low cost wedding present – and repeated the process when our oldest grandchild shacked up together with her then partner (soon to be husband) via a joint mortgage. Let’s hope the message has been received and that they update them as their circumstances change.
There is a lot of miss information / understanding around PoA/LPA in my experience.
The more I learnt about them and how different organisations view/use them the more they became useful.
If you are an Attorney for someone my top tips are –
1. Don’t wait until you need them to start telling banks and utility companies etc.
It is a slow process to get these organisations to recognise your LPA and give you the access you require.
A major issue is that you only get one printed copy of each LPA, you cannot download them, they do not exist in a pdf anywhere.
And every organisation will insist on seeing this origional printed copy and usually taking their own copy for their records.
They usually say you can post them but why take this chance when you only have one copy, they will not accept photocopies.
So you will need to contact each bank etc and I found it was best to make an appointment first and go into a branch with the LPA and proof of your ID etc. and the bank details of your relative.
On average it took 30 – 45 mins each time.
Just because you are registered with their banks you don’t need to do anything, my in-laws are worried we are going to monitor and comment on their spending, as if we have got to do that!!
But I do understand their concern, so some careful explanation is required.
The flip side is, if the worst suddenly happens, you are able to step in, login and sort what needs to be sorted and that worry then disappears.
2. Anything Gov based, eg pensions, attendance allowance etc it’s much easier.
First you go to the Gov website and register yourself as a PoA.
Then when you call each dept ( and yes it will be multiple calls) and after you have explained repeatedly you are PoA etc, you go back to the gov website and you can generate a code which you then tell whomever you are calling. As long as it matches their code, you are recognised as their PoA and can happily sort what you need to.
This may sound quick and easy but it is not, give yourself time to be on hold for up to 2 hours and then another hour talking to each dept.
I have spent hours and hours on the phone
3 . The first time you generate the code, copy and save the url for the required webpage. It is an absolute ball acher to find the page you need and often I had to be guided to it by the person I was talking to at the time. It is far from an intuitive website.
4. If your relative ends up in hospital, have a bag ready every time you go to see them.
I have a small canvas laptop bag and in it I have the copies of the LPA(s), my passport, and my driving license. NI and NHS numbers and dates of birth of my relatives, names and address of their doctors etc (you get the idea)
At every hospital or care home they go to you will again need to provide all of the above.
When my Dad was in hospital I had to do it every time he changed wards!!
5. Be very vigilant of the bag and very protective of the LPA’s, I’m sure you would be able to get another copy if you lost it, but I don’t want to find out what that process is like!
6 Learn what your power/authority is and be prepared to stand your ground.
7. Don’t assume information is passed onto other professionals. Make sure key information is shared even if you are repeating yourself frequently. My Dad has dementia, Diagnosed in 2020 by his GP and a consultant. In 2022 he ended up in hospital with a broken leg, his medical records did not list his Dementia. Every time I spoke to a nurse or doctor I mentioned his dementia, well over half did not know. He was in hospital for 3 months!!
If you are asked please don’t be put off being a PoA, I think it is a massive privilege to be asked ( and trusted) by my Dad to be his advocate and to act on his behalf.
Sorry for the ramble, I didn’t intend this to be long, but once I started it just kept coming.
Good luck to all.
@FI-Firefighter(36)
To your list of useful tips for attorneys, I would add getting certified copies of the original LPA. It’s not absolutely essential to use a solicitor to do this, but it is best and not too expensive. (The original LPA was applied for online without use of a solicitor.) I got three copies when I was attorney for my mother. It is likely that not every organisation will necessarily accept the certified copy, but many will and all legally should accept the certified copy as equivalent to the original. If you ever have to send the LPA through the post be sure to only send a certified copy.
@all
Once an LPA has been correctly made, be aware that it must then be registered with the Office of the Public Guardian (OPG), and that this can take up to 16 weeks. Also, before you register, send a form LP3 to all the “people to be told” who you listed in the LPA, who then have 3 weeks to raise any concerns with the OPG.
It’s funny how families can talk about everything except what happens to the money when Grandma kicks the bucket. Nothing says “I love you” like a heart to heart about death taxes, right? Here’s to hoping for more open discussions, preferably over wine, not at a funeral!
@FI-Firefighter, @DavidV – that is super-useful information to know, and not something I had even considered- I thought of PoA as “file and forget” Thank you for sharing!
@Ian Edward Holliday, if you are worried by your children being disinherited by your partner remarrying, you can set up a will trust. This is also helpful for blended families, where you wish to ensure your children from a previous marriage receive their inheritance should you die before your partner. As part of this, you can ensure your partner has use of the house until their death, when it then passes to your nominated recipients.
It was straightforward to set this up – we used Cooperative Legal Services – and cost around £1200, including LPAs.
Really interesting to read everyone’s different approaches.
We have had LPAs in place for years, for my parents and my wife’s parents. All of them were prompted by significant health events.
My Dad fits into the category of someone from humble origins, who built a successful business. He is focused on leaving as much as he can to his children and grandchildren rather than to HMRC. He strongly dislikes IHT.
He has sent us all a letter explaining his intentions and approach, and discussed it with us including how disappointed he would be if anyone fritters the hard earned money away. Understandably he wishes it is used for housing, health care and university (not fast cars or holidays!).
My parents are both in good health and hopefully will live for many years to come. No idea what will be left, depending on how long they live and enjoy their retirement, plus uncertainty about care needs/fees etc. I could well be retired before I receive whatever the inheritance might end up being, but they have already very kindly gifted some money to try and use the 7 year rule. Anything else we receive will be a great help (but probably passed to our own children instead to help with the frightening cost of houses) but we have planned our finances independently, so are not counting on an inheritance; rather it would be a bonus.
I’m very late to proceedings here, but hopefully this is still of interest.
Inheritance is a sticky topic in our family at the moment. My parents divorced twenty years ago, so we’re talking about two estates. My mother died last year and was very organised about everything: PoA and will finalised years before, final wishes written down, various accounts closed and simplified, passwords in one place, documentation stored in one obvious place. She was terminally ill and eager to make sure her affairs were in order to her liking. This made things very easy for my siblings and I re probate proceedings, which I consider her final gift to us. We haven’t inherited enough to bump the IHT threshold. That’s all been blessedly straightforward, though of course we’d rather still have her here rather than the money.
My father on the other hand . . . oh dear. He’s a difficult, controlling person and becoming more so in his dotage. He spent his career earning loads of money and using it to control his family members, including me and my siblings. He wants to divest his fortune in very particular ways to us that mean we must do certain things with the money, and on paper the money would be loans from him to us. Not gifts. I suspect he wants to reduce his taxable wealth in retirement on paper while still having access to it via us. We’ve said no, and now every message and call from him is full of complaints about our financial ineptitude, and how “your inheritance” is at risk. He ignores me when I say it’s currently his wealth, not my inheritance (I feel that’s an important distinction!).
He’s retired now – forcibly so due to age, despite being in a financial position to do so at least a decade ago – and we’ve defaulted to a stance that he should enjoy his retirement without worrying about money. I’ve told my siblings that if he lives a long time, most of his fortune will probably be eaten up by medical or care costs. Our expectations about what we’ll inherit are pretty low – either he’ll spend it, or if he doesn’t before he passes, he’ll have managed it in ways incomprehensible to us without documenting where it is, so we won’t get much out of sheer ignorance.
It’s nigh-on impossible to discuss his finances rationally with him now. He’s dead set on us doing certain things in order to get money from him, and scoffs at anything we suggest to him (like a trust if he wants to ensure the money is spent in certain ways). He claims he wants to reduce IHT for us, but my siblings and I aren’t that fussed – I suspect he can’t stand the idea of IHT getting any of his estate in any capacity, i.e. the double taxation fallacy you’ve talked about here.
He has mentioned PoA to me at various points, but never followed up with any forms, even after reminders. He’s suggested my siblings and I draft power of attorney forms for him – as in, he has power of attorney for us, specifically for financial matters. As you can imagine, that was also a no from us. No idea what his will says or who the executor is, and I’m too leery to ask, though I’m 99% certain he has one. Having seen the state of his house, I have very low expectations that his financial situation is documented well and filed somewhere logical.
I think his behaviour is still mostly run-of-the-mill control freak, but sometimes I worry this is the start of him losing capacity. I’m truly at a loss. I waver between wiping my hands clean of him and the whole situation, and worrying over the potential nightmare of paperwork, legal representation, and estate concerns that I foresee looming slowly in the horizon.
This whole article (and conversation) has been a mine of useful information that I’ll be gradually adding into our own preparations. Thanks to all of you who have added so much.
I only wish I’d had it all before helping with the accounts of both my wife’s mother and my own mother when they died. Both had left wills that were written in happier and healthier times and neither covered all the realities of their later lives and wishes.
In particular, the most recent one named her husband as sole executor…with only a provision of it being passed to the next generation if he was already out of the picture. It may have seemed sensible to have this bi-directional clause in their wills when they were younger, but he really didn’t want to be involved now.
In most cases we were able to use the existing LPA to convince the banks that he had devolved the responsibility down a generation – so that’s another win for having them in place already!
As a general principle, I suppose we should have checked that the wills reflected the “current” reality and wishes.