Over-55s continue to favour inheritance to pass on wealth despite conflict concerns

Most people aged over 55 continue to favour passing on wealth through inheritance, despite widespread reports of this route causing family conflicts, research from YouGov for Mattioli Woods has found.

The findings suggested that witnessing inheritance disputes was not leading to a shift towards lifetime gifting.

Passing on wealth through estates remained the preferred method for most over-55s, while combining lifetime gifting and inheritance was the second most popular strategy.

While inheritance planning was seen as important, conversations about it remained uncommon.

A quarter (25 per cent) of over-55s had never openly discussed inheritance with their families, which Mattioli Woods said highlighted the ongoing discomfort around the subject, concerns about privacy, and a belief among many that it is simply ‘too early’ to have the conversation.

Inheritance was also found to be a major source of family conflict, with 64 per cent of over-55s saying they had witnessed disputes among relatives or friends over inheritance.

Arguments and damaged relationships were the most common outcomes, while many had also seen disagreements escalate into formal legal disputes.

Wales had the highest proportion of people who had witnessed disputes over inheritance (77 per cent), followed by London (72 per cent), and the south east of England (71 per cent).

At the other end of the scale, 58 per cent of people in the East Midlands, north east and north west of England had seen inheritance-related disagreements.

When asked about the biggest challenges in passing on wealth, over-55s ranked paying for care or other later-life costs ahead of inheritance tax, running out of money in retirement, and treating beneficiaries fairly or potential family disputes.

"Although inheritance disputes are remarkably common, they are not fundamentally changing how most people want to pass on their wealth,” said Mattioli Woods wealth management director, Adeline Christy.

“Leaving assets through an estate remains the preferred approach for many families, even among those who have seen first-hand the tensions inheritance can create.

"What the findings do highlight is the need for earlier planning and better communication. Many inheritance disputes arise not because of the value of an estate, but because expectations have never been discussed.

“Open conversations, supported by professional financial advice, can help families understand the reasoning behind decisions and significantly reduce the likelihood of conflict later on."

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