Generations set to receive inheritance in ‘the great wealth transfer’ have an “alarming” lack of clarity or knowledge about what their parents’ inheritance plans are, according to Charles Stanley.

Its research found that more than a third (36 per cent) of Generation X (aged 44-59) were in the dark when it came to knowing about their parents’ inheritance plans.

Charles Stanley warned that this lack of knowledge could leave inheritors questioning what they will inherit and susceptible to potentially costly tax bills.

Nearly a quarter (23 per cent) of Generation X have never spoken to their parents about their inheritance plans, while 13 per cent did not know because they either do not have a relationship with their parents or they have passed away.

The problem extended to Millennials too, with 24 per cent of 28-43 year olds having never spoken to their parents about inheritance plans, and 3 per cent being estranged or have had their parents pass away.

More than a fifth (21 per cent) of Baby Boomers do not have a will in place, leaving their beneficiaries unaware of how to best manage their finances.

Furthermore, those without wills in place will see their assets being distributed according to the rules of intestacy, where the law decides who inherits their property and money.

“Passing on wealth and inheritance takes careful planning and consideration,” said Charles Stanley director of CSD advice and guidance, Lisa Caplan.

“Not only does it ensure that there won’t be any unexpected or avoidable tax bills, but also that everyone involved knows what to expect.

“What’s clear from our research is that not everyone is in the loop when it comes to inheritance planning. This leaves the door open to families finding themselves having to settle unnecessarily large or unexpected tax bills, or even jeopardising hopes to pass on wealth to their loved ones.

“With thresholds frozen until 2030, and pension assets being included in estates from 2027, the number of families finding themselves having to pay inheritance tax (IHT) on their loved ones’ estates is set to grow sharply.

“It’s critical that people understand the value of their estates, have plans in place for how they will pass wealth on, and, importantly, communicate this with their family.

“Professional advice can prove extremely useful in the case of IHT, in terms of planning and communication, so everyone understands what may or may not be coming to them.”

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