Professional and industry update
There has been no significant legislative or regulatory change affecting the preparation of Wills or Lasting Powers of Attorney this week.
There have, however, been several developments that deserve the attention of estate-planning professionals.
New analysis suggests that more than £1 billion of Inheritance Tax has been attributed to lifetime gifts over four years. Will providers are increasingly using short-form video to communicate with the public, probate-lending businesses are attracting substantial investment and industry commentators continue to raise concerns about fraud within the probate system.
None of these developments requires an immediate change to Will or LPA wording. Their importance lies in what they tell us about client understanding, changing service models and the professional systems needed to support good estate planning.
Inheritance Tax evidence
More than £1 billion paid in tax on lifetime gifts
Analysis obtained by NFU Mutual through a Freedom of Information request provides a useful indication of the Inheritance Tax being attributed to gifts made during a person’s lifetime.
The figures suggest that more than £1 billion of Inheritance Tax was attributed to lifetime gifts across 5,080 estates between 2020 and 2024.
During 2023–24 alone, approximately £315 million was attributed to lifetime gifts across 1,390 estates. That represents an average of approximately £226,000 for each affected estate.
These are not figures showing that every gift results in an Inheritance Tax liability. Most ordinary gifts will not produce tax at that level, and many will fall within an exemption, an available allowance or outside the relevant time period.
They do, however, demonstrate that gifting cannot safely be treated as a simple way of removing assets from an estate without considering the tax rules and the client’s wider circumstances.
Important context
The figures were reported through NFU Mutual’s analysis of information obtained from HMRC. They are not a new tax rule or government policy announcement. Their value lies in illustrating the practical consequences that can arise when significant gifts are made without appropriate planning or records.
The current rules
How does the seven-year rule work?
A gift made outright to another individual will usually be treated as a potentially exempt transfer for Inheritance Tax purposes.
If the person making the gift survives for seven years, the gift will ordinarily fall outside their estate for Inheritance Tax.
If they die within seven years, the gift may need to be considered when the estate’s tax position is calculated.
Available exemptions can include:
- the annual £3,000 gifting exemption;
- the small-gifts exemption;
- specified gifts made in connection with a marriage or civil partnership;
- gifts between spouses or civil partners;
- gifts to qualifying charities; and
- certain gifts made regularly out of surplus income, where the relevant conditions are satisfied.
The availability of an exemption depends on the circumstances. A client should not assume that a gift qualifies without considering the relevant requirements and retaining appropriate evidence.
What about taper relief?
Taper relief is often described as reducing the value of a gift over the seven-year period. That description can be misleading.
Taper relief does not reduce the value of the gift itself. It may reduce the tax payable on gifts made between three and seven years before death.
It is generally relevant only where the cumulative value of taxable gifts exceeds the available £325,000 nil-rate band.
The practical point
The seven-year rule should not be presented as a complete estate-planning strategy. The nature of the gift, the available exemptions, the donor’s continued benefit from the asset and the record of what happened can all affect the eventual position.
The Elephant Legal view
My professional interpretation
The figures reinforce the need to ask sensible questions when a client describes substantial gifts or plans to transfer significant assets during their lifetime.
They do not mean that every Will appointment should become an Inheritance Tax consultation.
A Will practitioner should nevertheless be able to recognise when a client’s gifting history may affect the wider estate-planning picture and when specialist tax or financial advice may be needed.
Relevant questions may include:
- whether significant gifts have already been made;
- when those gifts were made;
- who received them;
- what assets or amounts were transferred;
- whether the person making the gift retained any benefit;
- whether an exemption was expected to apply; and
- what documentary evidence has been retained.
The answers may establish that no further action is required. They may instead identify a need for specialist advice or better record-keeping.
Recognise the issue without exceeding your scope
Identifying that a substantial gift may affect an estate is not the same as providing detailed tax advice. Good professional practice involves recognising the issue, explaining the limits of the service and referring the client when necessary.
Why does this matter now?
The planning picture is likely to become more connected as most unused pension funds and pension death benefits are brought within estates for Inheritance Tax from April 2027.
Clients may respond to those reforms by reconsidering how and when assets should pass to family members.
That makes accurate communication particularly important. People should not be encouraged to make large gifts simply because a change to the tax treatment of pensions is approaching.
Any decision to give away a substantial asset should also take account of the person’s future financial security, care needs, control of the asset and the possibility that personal or family circumstances may change.
The importance of keeping records
Personal representatives may need to reconstruct a person’s gifting history after their death.
That becomes much harder where gifts were made informally, bank statements are no longer available or nobody recorded what an individual payment represented.
A reliable record should ordinarily identify the date, recipient, amount or asset transferred and the exemption or other treatment believed to apply.
Good administration begins during lifetime
Clear records do not determine the tax treatment by themselves, but they can make it considerably easier for personal representatives and professional advisers to establish what happened and report the estate accurately.
Communication and marketing
Will providers are turning to short-form video
Industry commentary published this week considered the increasing use of TikTok, Instagram Reels and other short-form video platforms by Will-writing and estate-planning providers.
The attraction is understandable. A short video can introduce one legal point in 30 to 60 seconds, reach people who would not actively search for a lengthy article and make a practitioner feel more familiar before an initial conversation takes place.
Video can also be particularly effective where the objective is to correct a common misconception or prompt somebody to ask a better question.
Possible subjects include:
- why next of kin does not automatically have legal authority;
- why an unmarried partner may not inherit automatically;
- when a Will should be reviewed;
- the difference between the two types of LPA;
- why LPA registration should not be left until a crisis; and
- why the seven-year gifting rule is more nuanced than it sounds.
What does this mean for our industry?
Estate-planning professionals should not assume that being active on a particular platform automatically produces effective public legal education.
Short-form content rewards certainty, speed and strong opening statements. Legal and financial subjects often require context, qualifications and an explanation of when the answer may be different.
That tension needs to be managed carefully.
A short video should introduce a point clearly without pretending that a general rule provides a complete answer for every person.
It should also distinguish between legal information and advice based on an individual’s circumstances.
Video should open the conversation
Short-form video is most useful when it helps somebody recognise an issue and understand the next sensible question. It is less useful when a complex subject is reduced to a dramatic claim designed principally to generate fear or urgency.
Trust is particularly important in Will-writing and later-life planning. Clients are often discussing family relationships, vulnerability, health, money and death.
Allowing people to see and hear the practitioner before making contact may help to make the service more approachable. The tone should remain professional, calm and accurate.
Changing service models
Probate lending continues to attract investment
A probate-lending provider has announced an eight-figure funding facility intended to support further growth.
Probate lending can provide beneficiaries, executors or estates with access to funds before an estate has been fully administered.
The products may be described in different ways and their structure, eligibility requirements, costs and repayment arrangements can vary.
Why might finance be needed?
Estate administration can take time. Delays may arise while a grant is obtained, property is sold, tax is calculated, liabilities are settled or disputes and practical problems are resolved.
At the same time, an estate or family may face immediate costs, including:
- Inheritance Tax that must be paid before a grant can be issued;
- funeral or property-related expenditure;
- insurance, utilities and maintenance costs;
- professional fees; and
- financial pressure on beneficiaries awaiting their inheritance.
Lending may provide a solution in some circumstances, but it is not appropriate to assume that borrowing is always necessary or suitable.
My professional interpretation
The investment is evidence that probate finance is becoming a more established part of the wider estate-administration market.
Will practitioners may increasingly encounter clients who have heard of these products or whose families later consider using them.
That does not mean a Will provider should recommend a financial product outside their competence or authority.
Professional boundary
Where probate finance is being considered, the client should understand the cost, security, repayment arrangements, alternatives and effect on the eventual inheritance. Appropriate regulated financial or legal advice may be required.
The wider planning lesson is that liquidity matters. An estate may contain substantial value without having readily available cash to meet its immediate obligations.
Risk and professional standards
Renewed concerns about probate fraud
Industry commentary has again raised concerns about the vulnerabilities that can arise when probate applications and estate information are used dishonestly.
Probate fraud can take different forms. It may involve a false representation about the existence or validity of a Will, an application made without the knowledge of the correct people, concealment of information or misuse of estate assets.
The commentary is not a new legislative or regulatory announcement. It should therefore be treated as a renewed professional warning rather than a confirmed change to the probate process.
What should the profession take from it?
Will and LPA practitioners do not control the probate system. Nevertheless, the quality of the records and documents created during the client’s lifetime can affect what happens after death.
Providers should have reliable systems for:
Confirming identity and instructions
The practitioner should be satisfied about the client’s identity, instructions and understanding of the document being prepared.
Recording capacity and possible influence
Attendance notes should record relevant discussions, particularly where capacity, vulnerability or undue influence may later be questioned.
Managing original documents
Practices should know which documents they hold, where they are stored and how they can be retrieved by the client or the correct representatives.
Recording execution properly
The circumstances in which a Will was signed and witnessed should be clear, particularly where the process was unusual or required additional support.
Planning for business continuity
Clients should not lose access to original documents because a practitioner retires, becomes unable to work or closes the business.
Original Will storage is more than an administrative service
Where a practice offers to store an original Will, it assumes an ongoing responsibility for a document that may not be needed for many years.
The practice should know how the document will be protected from loss, damage, unauthorised access and incorrect release.
Clients should understand how they can retrieve it, whether anybody else may receive it and what will happen to stored documents if the business changes ownership or ceases trading.
The professional point
Secure storage, accurate records and clear succession arrangements do not eliminate probate fraud. They do, however, make it easier to establish what the client intended and reduce avoidable uncertainty when the document is eventually needed.
Status check
What has not changed this week?
None of the developments covered above changes how an ordinary Will or Lasting Power of Attorney is prepared, signed or registered.
LPA registration
The Office of the Public Guardian continues to advise that LPA registration takes approximately 8 to 10 weeks, including the statutory waiting period.
Communications should continue to explain that registration is not immediate.
Digital LPAs
No operational commencement date has been announced for the new digital LPA system.
Existing preparation, signing and registration procedures remain in place.
Reform of Wills law
The Law Commission’s proposed modern Wills Act remains under government consideration.
Existing signing and witnessing requirements continue to apply.
Inheritance Tax and pensions
Most unused pension funds and pension death benefits are due to enter estates for Inheritance Tax purposes from 6 April 2027.
This is a future confirmed change, not a rule that already applies to deaths occurring now.
Probate applications
The probate application fee remains £526 for estates valued above £5,000.
Current probate and executor information should continue to use the £526 figure.
Further reading
Principal sources
This briefing draws on official government guidance and clearly identified industry reporting and commentary.
My view this week
Good planning depends on more than the document
The lifetime-gifting figures demonstrate why apparently simple planning decisions can have significant consequences when the tax rules, exemptions and record-keeping requirements are not properly understood.
The growth of short-form video creates an opportunity to make legal information more accessible. It also places a responsibility on practitioners to resist simplifying a subject to the point that the explanation becomes misleading.
Probate lending and the continuing discussion about probate fraud raise different questions, but both reinforce the importance of planning for what happens after death rather than concentrating only on the document signed during the client’s lifetime.
Across all four developments, the common theme is professional responsibility.
Good estate planning depends on accurate communication, reliable records, secure documents, appropriate referrals and a clear understanding of where one professional’s service ends and another’s should begin.