How a financial planner can help your clients discuss wills with loved ones

As an accountant or legal professional, you will know that the start of a new year is an excellent time for your clients to take stock of their financial and legal affairs. Ensuring that everything is in order for the year ahead and beyond provides them with peace of mind that everything is exactly as they would want it to be.

That said, there is one particularly important task that is all too often overlooked: writing or updating a will. With this in mind, it won’t surprise you to learn that in 2022 MoneyAge revealed that more than half of UK adults (56%) do not have a will, which equates to around 29.6 million people. 

If you have a client who is one of them, research suggests that it may be because they’re struggling to discuss writing a will with loved ones. Read on to discover how a financial planner may be able to help with this, and why doing so might mean that your clients can leave more money to loved ones.

More than half of parents have not discussed their will with adult children

According to MoneyAge, research by Scottish Widows found more than half of parents (57%) have not spoken to their adult children about their will. Furthermore, 24% of adults have not even spoken to their partner or spouse about a will either.

One reason for this could be that discussing our mortality is difficult, and may become emotional. If this is something your client is finding, they may be able to reduce the stress involved in talking to loved ones about their will by including a financial planner in the conversation.

A planner could help your client through a potentially difficult conversation by ensuring loved ones understand the financial reasons for the decisions made in the will. This could help to avoid misunderstandings and disputes later on between beneficiaries, something that might provide peace of mind for your client. 

Furthermore, a planner can help loved ones understand how to maximise the financial benefits from the inheritance, and how it could help them achieve their goals in life. As well as this, a planner could help your client significantly reduce their estate’s exposure to Inheritance Tax (IHT), something that could allow them to leave more money to loved ones. 

This is something we will look at in more detail next.

A financial planner could help your client deal with an Inheritance Tax liability

The government allows everyone to have a certain amount in their estate upon death before IHT is charged. Known as the “nil-rate band” (NRB), the threshold is typically £325,000 if your client is single, or £650,000 if they are married or in a civil partnership.

Your client may then be able to claim the residence nil-rate band (RNRB), which could boost their threshold to £500,000 or £1 million respectively. As strict regulations apply with the RNRB, a financial planner will be able to confirm whether your client is entitled to it or not.

In November 2022, the chancellor announced that the freeze on the Inheritance Tax (IHT) thresholds would continue until April 2028. According to the Telegraph, the move could mean that the average UK household’s IHT bill soars from £215,000 in 2019/20 to £287,000 in 2027/28.

This is largely because investments and other assets may continue to increase in value while the tax-free amount you can have in your estate remains the same. This exposes more of your client’s estate to IHT, which is typically charged at 40%.

As you can see, this could significantly reduce the amount of money your client can then leave to their loved ones.

Your client may be able to use gifting to leave more money to loved ones

It’s not all bad news though, as a financial planner could help your client reduce their IHT liability through gifting. Every tax year HM Revenue & Customs allows several gifts to be made, which include:

  • A total of £3,000 that can be given to an individual or shared between many
  • Wedding gifts of up to £1,000 to anyone, £2,500 to grandchildren, or £5,000 to children
  • Gifts of any amount as long as they are regular and made from income not capital. The gifts must not lower your standard of living
  • Up to £250 to as many people as your client wants, as long as they don’t receive any other gifts from your clients.

These can be used to reduce the value of your client’s estate that’s above the NRB, which in turn reduces the amount of IHT charged. If the value of the estate falls to below the threshold, it will typically negate any tax charge.

If the taxable element of your client’s estate is significant, they may instead want to consider a potentially exempt transfer (PET). While this allows them to give unlimited amounts to anybody they like, your client must then live for seven years before the gift falls outside of their estate for IHT purposes. 

If they do not, the gift could use up all or some of their NRB for those seven years. 

As you can see, there are several ways your client might be able to reduce their exposure to IHT. That said the rules and regulations around IHT and the NRB can be complex, which is why working with a financial planner could be a shrewd move.

Get in touch 

If you or your client would like to discuss ways to reduce their exposure to IHT, or any other way we might be able to help, please contact us on or call 01904 655 330. As an award-winning financial advice company that was a 2022 VouchedFor Top Rated firm, you can be sure that your clients will receive excellent advice and a high quality service.

Please note

This blog is for general information only and does not constitute advice. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change. 

The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

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