Tomorrow’s 21 year olds set to inherit the keys to the door

Two thirds of UK adults (60%) think their children should not inherit aged 18 but should wait until they are 21 or over, according to research by Saga Will Writing and Estate Planning Services. However, a massive 83% of people were unaware that, under new IHT laws, if offspring do not inherit from a trust at 18 years of age then they will now be taxed.

More than ten months after the new rules governing the way trusts are taxed were announced, the majority of people are still unaware of their implications and disagree with the notion that children should inherit aged 18.

Saga discovered 91% of the people opposed to inheritance at 18 believe that the beneficiaries are too young, and 83% think they will waste any money they do receive. However benefactors’ decisions could be swayed if they realised keeping kids from inheriting could affect millions of people in the UK by eating into the amount they ultimately receive.

It is not just the age of inheritance that is confusing people. When it comes to who receives assets, half of the population predicted that without a will, a spouse will automatically inherit 100% of the deceased’s estate. In fact, if there are surviving children, the spouse is only entitled to receive first £125,000 of the estate plus personal chattels. The balance of the estate passes equally between the children and the spouse with their share put in trust to provide an income for life. If there are no children, but there are parents or brothers and sisters, the spouse receives half of the estate with the remainder passing to parents, brothers and sisters.

A shocking 42% of all adults also admitted to not having a will. Even those who do have this legal document, risk it being revoked. Almost two million (1,928,500) adults have changed their marital status without updating their will, perhaps not realising that marriage revokes an existing will and on divorce an ex-spouse is treated as deceased for the purpose of any appointment or benefit under a will. In addition, almost one in three (28%) have never updated their will since it was first written and the majority haven’t updated it for 5 years or more.

Andrew Goodsell, Chief Executive of Saga Group comments “A will is a living document and should be updated on a regular basis. We would urge anybody whose circumstances have changed since their will was drafted to urgently get this checked or risk their wishes for their loved ones being unintentionally ignored.”