Trusts are playing a larger role in future estate planning in the wake of reforms which will bring pensions into scope for inheritance tax (IHT) from 2027… and the sector must be prepared for the ‘influx’ of enquiries for estate planning services expected.
A survey conducted by Scottish law firm Brodies LLP of UK adults aged 50+ reveals a ‘widespread lack of understanding about upcoming tax changes’ particularly around inheritance tax with just 26% claiming they fully grasp the implications of the upcoming changes. Over half of respondents (54%) said they were ‘aware’ of the IHT changes but they were unsure about the impact on them personally.
Changes to IHT particularly around Business Property Relief (BPR) and Agricultural Property Relief (APR) have caused widespread outrage. Relief will now only apply fully to the first £1 million of qualifying assets, with the remainder taxed at an effective 20% rate; changes which Mark Stewart, partner at Brodies LLP says ‘fundamentally shift the taxation landscape for estates, businesses, and trusts’ and highlights the important role of advisers in filling the knowledge gap.
Wealth management firm Quilter say trusts are playing are increasingly popular part in estate and financial planning, revealing they have seen an almost 200% increase in the number of Lifestyle Trusts opened in 2024 compared to 2023, and uptake in 2025 already on track to far surpass this level.
Brodies’ survey also identifies a lack of estate and financial planning amongst respondents with just 41% saying they had a ‘structured estate plan’ in place; only 16% of respondents have sought professional advice, and fewer (10%) have engaged in detailed discussions about inheritance with their families.
But the shared sentiment from Brodies’ survey and research conducted by Lloyds bank is people know these are things they should be doing. One in three from the Brodies survey acknowledged they should have have a plan in place. 75% of respondents to a YouGov survey by Lloyds said they recognised having a plan in place, in the form of a will, would make things easier for their family, should the worst happen.
Both surveys identify the emotional impact of detailed discussion with families might have; including the potential for fall out. Fairness and the risk of dispute are leading concerns among with just under a third citing equitable distribution as a key issue, while 23% fear family conflict due to wealth transfer according to Brodies. 28% of respondents to Lloyds’ survey said they don’t have enough assets to justify having a will in place and 21% simply don’t think it’s a priority.
Indeed more people plan their funeral music, than finances according to Lloyds with 80% of respondents having already picked their funeral songs, and only 59% saying they have made a will. The research does suggest significant life events like having a baby or grandchild (27%), buying a home (23%) or getting married (21%) are the biggest motivators for writing a will.
