Inheritance tax warning as millions of over-55s risk 'unexpected' bill over one missing document

Research shows many older adults have not organised a will or estate plan, even though they have built up significant assets over their lives.

The risk is not only financial as families can be left dealing with long legal delays and additional emotional stress at an already difficult time.

Experts warn that if someone dies without proper documentation, UK intestacy laws decide who inherits their money and property - which may not match their wishes and could lead to unexpected tax bills.

Fresh analysis from Canada Life shows that 27 per cent of British adults aged 55 and over have not put any form of will or legal document in place to decide what happens to their money and property when they die.

This is especially concerning because this age group tends to have the highest level of accumulated wealth.

Liz Hardie, Technical Specialist Tax, Trusts and Estate Planning at Canada Life, cautioned: "Leaving a will outdated, or not having one at all, means that UK laws of intestacy decide who will inherit your estate.

"This may not be aligned with your wishes and could result in a costly legal dispute or an unexpected inheritance tax bill if your assets go to your children instead of a spouse or civil partner."

The research programme found that 21 per cent of UK adults have experienced family disputes over inheritance. Among those who faced probate delays, 12 per cent said the problem was caused by missing paperwork, while another 12 per cent blamed poorly drafted legal documents.

Procrastination was the biggest obstacle to creating a will, with 38 per cent admitting they had simply put it off.

A further 21 per cent believed they did not need formal documentation because they assumed their estate would automatically pass to their spouse, even though intestacy laws often do not work that way.

Cost was a deterrent for 12 per cent who felt professional will writing was too expensive, and 11 per cent said they felt overwhelmed and did not know how to start the process.

These barriers remain widespread despite will creation being relatively simple and a range of professional services being available to support people with estate planning.

Life-altering circumstances frequently fail to prompt necessary revisions to existing estate documents. The Canada Life study revealed that 39 per cent of divorced individuals never amended their testamentary arrangements following marital dissolution.

Property acquisitions similarly failed to trigger updates, with 68 per cent neglecting revisions after purchasing new homes. Over half (53 per cent) maintained unchanged documents after becoming parents, whilst 44 per cent saw no need for amendments following marriage.

Ms Hardie emphasised: "Your will can, and should, evolve in the same way that life evolves. Whether it's getting married, buying a new home or welcoming a new grandchild, these are the trigger moments that should prompt you to re-evaluate the legacy that you wish to leave behind."

People across the UK are being urged to book their remaining Will Aid appointments before bookings close on November 30. Demand has surged, with many solicitors already fully booked for November, though some spaces are still available and appointments can take place after the deadline.

The annual campaign allows people to have a professionally written will in return for a donation to charity instead of the usual solicitor fee.

Suggested donations are £120 for a single will or £200 for mirror wills, with funds shared between partner charities including Shelter, Crisis, Age UK, Christian Aid, NSPCC, British Red Cross, SCIAF and Trocaire.

Peter de Vena Franks, Campaign Director for Will Aid, said: "Every year we see huge demand for Will Aid appointments - and with limited spaces left across the UK, we're encouraging people to act now before they miss out. A Will may seem like a simple document, but it’s one of the most important you’ll ever write."

Since 1988, Will Aid has helped write more than 350,000 wills and raised over £24million in donations.