Why are we so uncomfortable with talking about what happens to our wealth after our death?

It’s no surprise that many of us shy away from talking about death – there’s a reason it’s often referred to as ‘the last taboo’.

But it’s also one thing in life we can be certain of, and we can all expect to experience the loss of a loved one at some point. As independent financial advisers we often find ourselves having conversations with our clients about protecting their income, and most people also have insurance policies in place to protect their homes and possessions. Yet at the same time, people commonly avoid talking about their legacies, and about their wishes for what they want to happen to their assets after their death.

But these are important conversations to have. As one of our clients recently told us,

“Dad had often referred to his Will, talked a lot about having put things in place to ensure that his inheritance tax liability would be minimal, and told us that he’d left instructions. But we never really had any in-depth conversations about it. To be honest, we all rather stuck our heads in the sand, and just trusted that the information would be there when it was needed. So it came as a bit of a shock after he died to find that in reality everything was really vague. From his funeral wishes, to tracking down all his savings and investments, there’s a huge amount of guesswork and sorting out to do, and it’s a bit of a nightmare. I wish we’d all found a way to talk about it properly, whilst we still could. It would have been painful, but could have saved a lot of anxiety on top of the grief now.

The Last Word, a recent report from MetLife, explores the reasons why we’re so uncomfortable with death as a subject, and looks at ways to help have those difficult conversations.

You can read the full report here: The Last Word: New Research on the Taboo Surrounding Death and Funeral Planning | MetLife

Who has the last word?

Sadly, our client’s experience is all too common. Among the 2,000 people interviewed for the report, 51% said they were unaware of the wishes of people who had passed away. Even if you have no particular wishes, leaving no instructions means that your loved ones have to make decisions based on best guesses at an already stressful time. Many people (25%) said that they found this particularly difficult, and 31% specified that funeral planning added to their stress levels.

The reasons we avoid having these discussions are varied – but one of the key things that causes headaches is someone’s Will (or lack of it).

A particularly worrying statistic highlighted by the report is that only 15% of the people interviewed had written a Will, leaving the majority of families at risk of someone dying intestate (without a Will). At best, that adds to the administrative burden. At worst, dying without having left a Will risks all your hard-earned assets not going to the people you most want to help.

Similarly, a mere 14% of people had told family members where to find important documents. This vital information can take months to track down or recreate, and can end up generating significant additional cost. With so much done online these days, lack of sharing passwords and access to everything from social media to bank accounts can also add to the stress and difficulty.

Making sure your wealth goes where you want it to

There’s another very good reason for ensuring that you, and whoever you want to pass your estate to after your death, know what your plans are.

Planning for what happens to your wealth can help you to minimise, or even avoid, inheritance tax (IHT). By planning ahead, there are several ways that you can transfer wealth during your lifetime without attracting tax. These will largely depend on your personal circumstances, so it’s essential to get professional advice.

Talk to your loved ones

Talking openly with your family or others that you are close to is important. Being open about your plans helps to ensure that your wealth benefits the people you want it to – either during your lifetime or afterwards – rather than HMRC. Talking, or leaving specific, written instructions, about your wishes for what happens after you die also helps to relieve the burden of stress and decision-making at a particularly difficult time.

Talk to a trusted IFA

Your IFA isn’t just there to sort out your pension, mortgage or financial protection. Developing a long-term relationship with a trusted IFA can help you and your family through some of life’s most challenging times.

Though actually making a Will is usually the preserve of your solicitor, your IFA can help you to inform what goes into it, ensuring that your legacy is structured in the most tax-efficient way, and to identify ways in which you can also minimise your IHT liability by gifting during your lifetime.

Your IFA might also help you to have those difficult conversations with your loved ones. Many people find it easier to talk to someone outside the family, and an IFA who knows you well, and is fully aware of your objectives can help to guide you through these conversations, or even talk to people on your behalf.

At Talis IFA, we focus on getting to know you and your aspirations for passing on your wealth to the next generation. It’s not just about the numbers, we will talk to you about what is most important – do you want to leave a legacy to help out your children or grandchildren in general or for a specific purpose? Do you have other goals like philanthropy, for example? Quite often we find ourselves encouraging people to spend more money on themselves during their lifetime, rather than simply accumulating more and more!

It all depends on individual circumstances but what is certain (apart from death and taxes) is that these conversations are vital, and we can help you start to have them.

Find a Talis IFA here.