As the summer progresses, many individuals are taking the opportunity to reflect on their long-term plans, particularly around wills, inheritance, and later-life finances. With upcoming changes to inheritance tax and new data showing a significant number of adults still without a will, it’s a good time to revisit key aspects of estate planning.
In this Clarke & Wright August newsletter, we look at the growing use of trusts in response to the proposed inclusion of pensions in the IHT framework, trends in life insurance as a planning tool, and a recent court case that underscores the importance of proper will documentation. We also review the latest equity release figures and survey insights around public attitudes to planning.
Whether you’re reviewing your arrangements or beginning to plan for the future, we hope this month’s updates provide helpful context and guidance as you navigate the evolving financial and legal landscape.
A Third of Adults Plan to Write a Will, But Haven’t Yet
The study revealed that 54% of respondents across all age groups do not currently have a will. Even among those aged 55 to 64, where estate planning becomes increasingly relevant, 39 per cent reported not having one.
A spokesperson for the organisation behind the research expressed concern over these findings, noting that more than half of UK adults lack a professionally drafted will. They emphasised that writing a will is not just about protecting wealth, but also about offering peace of mind and clarity for loved ones.
The survey also highlighted common delays in probate and inheritance distribution. Among those polled, 45% had been named as beneficiaries in a will. Of these, 15% received their inheritance within three to four months, 14% within one to two months, and 13% reported waiting five to six months. The average waiting time was 5.78 months.
Being named as a beneficiary can be emotionally complex, combining financial uncertainty with a period of mourning. The findings reinforce the need for individuals to formalise their affairs in order to spare loved ones unnecessary stress during already challenging times.
Trusts Surge as Millions Remain Unprepared for Inheritance Tax Shake-Up
As major inheritance tax (IHT) reforms approach, trusts are emerging as a key tool for managing wealth and protecting estates. From 2027, pension assets will be brought into the IHT net, prompting a rise in enquiries and interest in more structured estate planning.
A recent survey of UK adults aged 50 and over reveals a limited understanding of the changes ahead. Just 26% of respondents said they fully grasped the implications of the upcoming IHT reforms, while 54% were aware but unsure how they would be personally affected.
Among the most contentious aspects of the reforms are revisions to Business Property Relief (BPR) and Agricultural Property Relief (APR). These will now only apply in full to the first £1 million of qualifying assets, with any excess subject to a 20% effective tax rate. Legal experts have described this as a fundamental shift in the taxation of estates, businesses, and trusts, and are urging individuals to seek advice as early as possible.
While interest in trusts is growing, the broader picture shows limited preparedness. Only 41% of over-50s reported having a structured estate plan, just 16% had consulted a professional adviser, and only 10% had engaged in detailed inheritance conversations with their families.
There is, however, clear recognition of the need to act. One in three respondents acknowledged they should have a plan in place. A separate YouGov survey commissioned by Lloyds Bank found that 75% of people agreed having a will would ease the burden on loved ones in the event of their death.
Yet emotional barriers remain a significant hurdle. Concerns about fairness and potential disputes are among the top reasons for avoiding conversations around inheritance. Nearly a third cited equitable distribution as a key concern, while 23% feared family conflict. According to Lloyds, 28% of people believed they did not have enough assets to justify writing a will, and 21% said it was simply not a priority.
Perhaps most striking, 80% of Lloyds respondents said they had already chosen their funeral music, while only 59% had written a will.
The data suggests major life events such as having a child or grandchild (27%), buying a home (23%), or getting married (21%) are the strongest motivators for will writing. But without proactive guidance, many people are delaying essential decisions.
Together, these findings point to a growing awareness of the need for estate planning, alongside a gap in understanding and action. With the IHT landscape changing and trusts gaining momentum, financial and legal professionals are urging people to prepare sooner rather than later.
High Court Rules Will Was Forged to Disinherit Daughter
A disputed will has been ruled a forgery by the High Court, following the death of Monir Jaman Shaikh in April 2020. The ruling came after a legal battle that ultimately overturned the disinheritance of his only daughter, Mosammat Shapna Khatun.
Mrs Khatun challenged a 2019 will that left her father’s entire estate, including four properties and a solicitor’s practice, to Shamin Hasan. She argued that it was highly improbable her father would make such a decision, pointing out she had little or no knowledge of Mr Hasan’s involvement in her father’s life. According to the judgment, Mr Hasan did not have a relationship with Mr Shaikh that could be described as being “akin to that of son, or nephew, or next of kin.”
The will was produced shortly after Mr Shaikh’s death and immediately raised suspicion. Deputy High Court Judge Caroline Shea KC highlighted numerous irregularities in both the creation and storage of the document. There was no documentary evidence of the will’s execution and no notes, letters, or records indicating that any meeting to draft the will had taken place.
Although Mr Shaikh had previously entrusted his legal affairs to J Stifford Solicitors, the disputed will was allegedly drafted by Mr Shaikh himself and held by Mr Pathania, a struck-off solicitor and acquaintance. Judge Shea identified multiple issues with the will, including spelling errors, oddities in the correspondence timeline, and references to property in Pakistan that Mr Shaikh did not own.
A handwriting expert concluded there was substantial evidence that Mr Shaikh had not written the signature on the will, but that it was written by someone familiar with his handwriting.
The responsibility to prove the will’s validity fell to the defendants. However, the court found they had failed to meet that burden. They did not provide adequate explanations for the lack of corroborating documentation or the inconsistencies in their account of Mr Shaikh’s relationship with Mr Hasan. As a result, the will was ruled invalid.
Life Insurance Sees Surge as Families Seek to Offset Inheritance Tax
Brokers and advisers report a spike in interest, driven by rising awareness that policies written in trust can fall outside the IHT threshold. One firm saw a 230% increase in whole-of-life policy sales since the reforms were announced, with similar growth reported across the market.
This surge reflects growing demand for practical solutions that offer immediate liquidity upon death. Life insurance payouts can help beneficiaries cover tax bills quickly, avoiding the need to sell property or take on debt.
Families with wealth tied up in illiquid assets, such as farms or business premises, are also exploring life insurance to address potential shortfalls. For some, these policies offer a more flexible and affordable alternative to restructuring assets or withdrawing pensions early.
There is also renewed interest in gift inter vivos policies, which cover the seven years after a gift is made. This is a window in which the value may still be subject to IHT if the donor dies.
Pensions Now Count Toward IHT, Raising Average Bill by £34,000
The average Inheritance Tax (IHT) liability is projected to rise by approximately £34,000 under draft government proposals that would include pension assets in the taxable value of estates. The proposed changes were published ahead of expected legislation later this year.
The government argues the move will close loopholes that allowed pensions to be used for wealth transfer rather than retirement planning. Currently, unused pension funds in discretionary schemes can often pass to beneficiaries tax-free. Under the new rules, those funds will be counted toward the taxable estate.
The forecasted rise is based on 10,500 additional estates becoming liable for IHT, contributing to a projected increase in revenue from £640 million in 2027 to £1.46 billion by 2030. A total of 38,500 estates are expected to pay more tax under the changes.
This estimate is static and does not reflect how individuals may adapt their behaviour. The Treasury has already seen evidence of such changes, with Capital Gains Tax receipts falling from £17 billion in 2022 to £13.1 billion in 2024. Some interpret this as the wealthy reorganising finances in anticipation of broader wealth taxes.
Following consultation, the government revised its initial plan to place IHT reporting duties on pension scheme administrators. Responsibility will now fall to personal representatives, who will also be required to communicate tax obligations clearly to non-exempt beneficiaries.
Importantly, death-in-service benefits paid from pension schemes will remain excluded from IHT under the draft rules.
Equity Release Grows 10% Year on Year
In total, 14,404 customers, both new and returning, accessed property wealth through equity release. A key driver was the rise in lump sum mortgage borrowing, with new customers withdrawing an average of £126,422. This is up 14% from the previous year.
Further advances, which make up less than 7% of total borrowing, grew sharply with a 40% annual increase in plan volumes. This suggests existing customers are taking advantage of rising house prices and product flexibility to unlock additional funds.
Industry experts point to continued demand for using property wealth to manage later-life expenses, from supplementing retirement income to supporting family members. Projections suggest that by 2040, more than 50% of UK households may rely on housing equity in retirement.
With flexible lending options becoming more mainstream and the FCA exploring the future of mortgage products, the sector is expected to continue its upward trajectory, provided it maintains high advice standards and product innovation.
Start the Conversation: Take Control of Your Future Plans
As new inheritance tax rules take shape and more families explore options like trusts, wills, and life insurance, now is an ideal time to take a closer look at your arrangements. At Clarke & Wright, we understand that estate planning can feel complex, but the right advice and early decisions can make a lasting difference.
Whether you’re writing a will for the first time, exploring how upcoming changes may affect your estate, or want to ensure your wishes are documented, our team is here to support you. Let this be the month you take practical steps to protect your assets and provide clarity for your loved ones.
Get in touch with us today to begin planning with confidence.