Unclaimed Inheritance Figures at Record Highs
The death of a loved one is always a sorrowful event in life. Yet if by chance you died tomorrow, you would at least know that your loved ones and your send-off are financially covered.
Except, as new research suggests, your loved ones may never see a penny of your cash savings, home investments, pension or even life insurance. But why? Because they simply can’t find the money.
Research suggests that approximately £15bn of assets are currently unclaimed and lying in the accounts of the deceased. Over 30 million people in the UK do not have a will, and it is not uncommon for many to never discuss finances with their families. In turn, this is causing vast amounts of money to sit dormant in financial limbo.
A staggering £48m in unclaimed estates and property has been allocated to the crown due to laws known as bona vacantia or ‘ownerless goods’ when people have passed away.
However, a large proportion of missing inheritance and emotional distress could be solved with some simple communication.
A third of the United Kingdom’s population wishes to discuss death with their parents and how they wish their estate to be managed when they are gone, but fear upsetting them. Similarly, almost the same proportion of parents feel the same but do not wish to upset their children.
The result of this is that three in every ten families have never discussed death with their family. Despite this, almost four in every ten Britons say that managing their parent’s estate was the biggest responsibility of their lives.It is becoming more essential that conversations over the transfer of wealth are happening given that 25 to 45-year-olds are expected to receive more than £1.2 trillion in the next 30 years.
5 helpful topics you should discuss with your family
- Who do you want to receive your wealth?
While it sounds simple enough, many don’t always realise that they may be sharing their inheritance with others such as grandchildren, friends or charities. It is important to be open and honest about your wishes, so your beneficiaries can be more realistic about what they will receive. It may be a difficult discussion but necessary.
- Establish how much you are likely to leave behind
This can be quite complex, and it is possible you may want advice from a financial planner. You should initially compile the value of your assets by writing them down. Details such as how they are invested and where they are held are important to note. The future is not easy to predict but calculating how much you think you will need, and potential care expenses is a good exercise.
- Early gifts
After calculating the above, you may have an idea of how much you may be able to gift to your beneficiaries right now if you so wish.
- Your wishes
It is important to state your wishes should you want your assets spent in a certain way. Are you happy to provide your beneficiaries with their inheritance as a simple gift? Or do you want to attach conditions to them receiving the money? Make your intentions clear now so expectations are understood.
- Minimising inheritance tax (IHT)
Seek help from a financial adviser to work out your IHT position. Work out how much IHT is on each asset you have and start considering how you can reduce IHT by reviewing allowances and other options available. Funding expenses from assets subject to IHT will help reduce your taxable estate.