Where is the will?
Less than a third of people have a will – and know where it is
Highlights
- Less than a third (32%) of people have an up to date will and know where it is
- 37% say they are financially dependent on receiving an inheritance, but most (60%) don’t know how much they will get
- Only 13% have a Power of Attorney for themselves
- 20% of people don’t plan to discuss their plans with their children
- 13% of people would challenge a will if they felt it was unfair
Arguably, this is more important now than ever. Demographic and societal changes mean property-rich Baby Boomers are passing on greater levels of wealth, while younger generations are increasingly expecting an inheritance to help fund major life costs such as further education and getting on the property ladder.
The research reveals the building blocks of estate and inheritance planning are largely absent, with less than a third (32%) of people who have an up-to-date will and, crucially, knowing where it is. A further 7% say they have an up-to-date will but don’t know where it is, and 10% say they have a will, but it is out of date.
Demographic changes, such as blended families, are driving the importance of clarity of communication. Younger people are more likely to say they are reliant on receiving an inheritance than older people: 41% of under-45s compared to 32% of over-45s. They are also more likely to challenge a will if they felt it was unfair: 16% of under-45s compared to 9% of over-45s. It could be there is more at stake since many younger people might not have built up their own wealth. With greater propensity to challenge a will, it is important that inheritance plans are clear and expectations well-managed.
Only 13% of people across all ages have a Power of Attorney agreement in place for themselves. It is advisable to have a Power of Attorney in place before it is needed. However, even in the older age groups only a minority have these agreements in place, with a third (33%) of over-75s and around half that (17%) for 65 to 74-year-olds.
Lorna Whalley, Director, Aviva Retail Platform believes these findings demonstrate the absolute importance of getting later life planning in order, saying:
“There’s a crucial role for financial advisers within inheritance and estate planning discussions, which goes beyond simply putting the mechanics in place. While recognising that situations can change, financial advisers can encourage clients to consider the levels of income they will need in retirement and what contingencies need to be in place. More than half of people (53%) say they don’t know how much money they will need to support themselves through retirement. This is an important step in helping people to avoid either helping family out to the detriment of their own financial security, or thinking they might need more money than they actually do A clear understanding of your financial situation and future needs is the building block for open conversations about inheritance and expectations.”
Three out of five (60%) people who expect an inheritance don’t know how much money they will receive. However, 43% of those say an inheritance from their parents is essential to their financial security and 37% say they are financially dependent on receiving an inheritance. Spending intentions bear this out, with the most common essential use of the inheritance money funding day-to-day expenses (35%). Almost a third (32%) of people say inheritance money is essential for funding their own retirements, while 29% intend to pay off debt, and 27% will pay off their own mortgages.
What will your inheritance be essential for?
- Day-to-day expenses – 35%
- Fund own retirement – 32%
- Pay off debt – 29%
- Pay off mortgage – 27%
- Fund a house move – 24%
- For own or children’s education – 20%
Lorna Whalley continued:
“People are relying on inherited wealth to fund essential parts of their lives, but many have no idea how much they are likely to receive. This uncertainty could prove disastrous for future financial plans and makes it much harder to take steps now to meet future requirements. Advisers have an important role in facilitating conversations between clients and their families to help ensure expectations are better understood.”
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