More middle-income families are being caught out by inheritance tax not because they are wealthy, but because they are relying on assumptions that no longer hold true.
As property values rise and tax thresholds remain frozen, a common misconception about how estates are passed on is quietly leaving families exposed to unexpected and often avoidable tax bills.
Many people wrongly assume their possessions will automatically transfer to a spouse or children upon their death, but this widespread belief is fundamentally mistaken. Without a properly drafted and legally valid will, assets do not simply pass to loved ones as families often expect.
Instead, intestacy rules take over, and these statutory provisions frequently produce outcomes that bear little resemblance to what the deceased would have wanted.
Jim Emsley of ELM Legal Services warned GB News that "the law does not fill in the gaps that people assume it will."
He said: "One of the biggest misconceptions is that everything automatically passes to a spouse or children when someone dies. That is not true unless it is clearly written down in a valid will.
"If your wishes are not documented properly, the rules of intestacy apply, and they often do not reflect what families expect or want."
This misconception takes on greater urgency as fiscal drag pulls an increasing number of ordinary households into the inheritance tax bracket.
HMRC data shows the Treasury collected £5.8billion in inheritance tax during the first eight months of the current tax year, marking an £84million rise compared with the equivalent period twelve months earlier.
The Office for Budget Responsibility anticipates this figure will climb to a record £9.1billion in 2025/26, potentially reaching more than £14billion by the end of the decade.
Reform UK expressed concern that the settlement would disadvantage rural communities | GETTYProperty prices have continued climbing while tax-free thresholds remain static, meaning even relatively modest homes now push estates above the threshold.
Although ministers have not formally increased inheritance tax rates, the freeze effectively achieves the same result through stealth.
Unmarried partners face particularly acute vulnerability under the current legal framework.
Mr Emsley warned these "couples are especially exposed. It does not matter how long you have lived together".
Blended families encounter similar difficulties, with stepchildren, new partners and long-term companions potentially receiving nothing from an estate despite close emotional bonds.
Property prices have continued climbing while tax-free thresholds remain static,
| GETTYMr Emsley notes that "good intentions do not survive bad paperwork, and the legal framework does not account for modern family life unless you make it do so."
The existing intestacy provisions were designed for traditional family structures and simply fail to recognise the complexity of contemporary domestic arrangements.
Families can take straightforward measures to avoid these pitfalls, with the costs of proper planning typically falling far below the expense of subsequent legal battles and unexpected tax demands.
A current, clearly worded will forms the foundation, supplemented by basic inheritance tax planning and frank discussions among family members before circumstances become pressing.
Most disputes following a bereavement stem from confusion and expectations
| GETTYMr Emsley emphasises that most disputes following a bereavement stem from confusion and expectations that were never openly addressed rather than disagreements over money itself.
Life insurance represents another practical option, enabling heirs to meet tax liabilities without being forced to sell property or other inherited assets.
Ultimately, preparing a will serves not as a morbid exercise but as a means of easing the burden on those left behind.
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