Why you should talk to your family about inheritance

Please see our glossary for information on the financial terms used in this article.

Talking about what happens to your estate when you pass away can be a difficult conversation to have. But avoiding conversations about inheritance can cause a number of issues for your loved ones down the line.

Think about it, if the worst happens:

• Will your family know where all your accounts are?
• Will they understand your investments?
• Do they know who to contact for help?

If not, they could face confusion, delays, unexpected tax bills and even loss of wealth, right when they need clarity the most.

The ‘family taboo’

We often hear about Inheritance Tax (IHT), yet nearly three-quarters of UK adults don’t understand how IHT actually works or what their beneficiaries might have to pay¹. This lack of understanding, coupled with the fact that 40% of people believe inheritance and estate planning is "taboo", highlights a worrying disconnect between financial planning and family communication.

Whilst the rising value of assets (particularly property) contributes to higher IHT bills, a core issue is simply a failure to plan early and openly with your loved ones. Breaking this silence is key to ensuring everyone knows what to expect and you can pass your wealth on to the next generation.

Importance of having conversations

Failing to have these vital conversations about inheritance can lead to a number of issues for your loved ones at an already challenging time. If your family doesn’t know about your investments, this could lead to a risk of unclaimed assets. Particularly if your investments are held on a platform, your family might be none-the-wiser that you’re signed up to it, potentially resulting in a loss of wealth for your beneficiaries. Consider telling your loved ones how to get hold of your accounts if they need to.

Not being open about your investments can also slow things down when sorting out your estate. The person handling everything, commonly the ‘executor’, may struggle to find certain accounts or paperwork, which then delays the entire process. This could mean dependants relying on your estate will have to wait longer to receive what you’ve left them, potentially causing them hardship. It could also induce additional legal or admin costs.

Your family being unaware of your investments can also lead to mistakes when calculating the amount of IHT owed. This means your estate might be underreported to HM Revenue & Customs (HMRC), even if it is unintentional, which could result in penalties and interest charges. It is important that everything is declared properly so the right amount of tax is paid and to avoid unnecessary stress for your loved ones.

How to initiate the conversation

So, how do you start? It’s natural to find the topic of inheritance challenging. Instead of focusing on mortality, frame the conversation around:

• Your financial philosophy – share with your heirs the “why” behind your saving and investment choices and what you hope they’ll do with their inheritance.
• Educating your loved ones – think about teaching your children, grandchildren or less-confident family members fundamental financial concepts such as compound interest and investment diversification. This will equip them with the knowledge they need to handle your investments when the time comes.
• The importance of planning – explain why having a financial plan, both for you and them, is so vital.

Choosing the right moment and environment is also important. Having a plan in place can ensure the conversation is productive. Consider these points:

• When the right time is to talk – whilst it’s best to start these conversations early, avoid discussing money when you’re stressed, emotional or rushed. Pick a calm, relaxed time when everyone can focus.
• Where to have the conversation – will it be at home, over the phone or somewhere else? Choose a place where everyone feels at ease and can speak openly.
• Who to involve – Would you prefer to talk to everyone at once or individually? What age would you deem appropriate to talk to your children or grandchildren about financial matters? Even young children can grasp basic financial concepts.

For guidance on talking to your children about money, read our dedicated article.

Could you benefit from financial advice?

Talking about inheritance isn’t always easy, but having a financial adviser involved can make the process more comfortable. They understand how sensitive these conversations can be and will guide you through creating an estate plan that reflects your wishes whilst also considering your family’s needs. They’re there to support you and answer any questions you may have.

If you don’t already have an adviser and would like one, you can find a financial adviser that's right for you on our Get financial advice page.
 

¹ Baxter, I. (2025, May 19). Almost three-quarters of UK adults do not understand how IHT works. Professional Adviser. https://www.professionaladviser.com/news/4413770/quarters-uk-adults-understand-iht

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser. The views expressed here should not be taken as a recommendation, advice or forecast.