Inheritance warning as Will related costs may take a chunk out of your money – check now

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Inheritance tax labelled ‘unfair’ and ‘cruel’ by expert

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More people dying with coronavirus meant over £570million was paid out in inheritance tax in July this year. This is the most ever paid in a single month, according to the Office for National Statistics.

With the increase in the inheritance tax being paid, Britons should be aware of the additional costs of contesting a will that may also see a big chunk of the inheritance savings disappear.

A major reason for the rise of inheritance tax being paid was due to estates getting caught in the IHT net after a year of increases in house and share prices.

Dealing with a dispute about an estate without a proper inheritance plan can easily take up to three years to resolve.

With an increase in property prices, as well as more people divorcing and remarrying, more bereaved people are spending tens of thousands on contesting a loved ones will.

READ MORE: Capital gains tax: Sunak could ‘significantly’ hike tax on assets

“If it’s a complex claim with many parties and many witnesses and experts, you’re looking at over 100 thousand, sometimes way more to get through to a trial.”

To keep legal costs down, families are urged to use mediation.

Mediation is a form of alternative dispute resolution where a third-party mediator steps in to try and resolve the dispute.

Research shows that more than 70 percent of those who use mediation services will resolve their issues outside of a court room.

This will end up saving them thousands in legal costs, and more cash to enjoy from their loved ones inheritance pot.

At the start of August, the government called for evidence to avoid unnecessary litigation which can become extremely costly for families.

Mediation seems to be the way forward.

The pandemic seems to have made it much more accessible and an affordable option for families.

The Treasury pocketed a total of £2.1billion in IHT between April and July this year, which is an extra £510million compared to the same period last year.

The record tax taken in July is likely to be a result of the horrible rise in deaths of people with Coronavirus earlier this year.

It’s important to check wills regularly to ensure they are solid and leave no room to contest the will.

Planning ahead can stop any extra cash going to the Treasury.

It will also stop chunks of the overall inheritance being decreased due to legal fees over a dispute of an estate or something in the will.

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