What Is the Most Common Inheritance Mistake?
The most common inheritance mistake in the UK is dying without a will. Without a valid will, your estate is distributed according to the Rules of Intestacy under the Administration of Estates Act 1925. These rules are rigid and ignore your personal relationships and wishes entirely.
Under intestacy rules, unmarried partners receive nothing, regardless of how long the relationship lasted. Stepchildren are excluded unless formally adopted. Close friends receive nothing. Assets pass to blood relatives in a fixed order: spouse or civil partner first, then children, then parents, siblings, and so on. This can generate unnecessary IHT liabilities and family disputes that could have been avoided with a simple will.
Beyond not having a will, the next most common mistakes include failing to use the annual £3,000 gifting allowance each year, not understanding the 7-year rule on larger gifts, and failing to claim the Residence Nil-Rate Band. The RNRB provides an additional £175,000 allowance when a family home passes to direct descendants, and many estates miss it entirely.
Not keeping records of lifetime gifts is another frequent problem. Without records, executors cannot accurately complete IHT400 forms, which triggers HMRC queries and delays.
Failing to review a will after major life events is also common. A will is automatically revoked by marriage in England and Wales. Divorce, remarriage, or the birth of children all warrant an update.
Making a will and reviewing it every 3 to 5 years is the single most effective step to protect your estate and your family.
Under intestacy rules, unmarried partners receive nothing, regardless of how long the relationship lasted. Stepchildren are excluded unless formally adopted. Close friends receive nothing. Assets pass to blood relatives in a fixed order: spouse or civil partner first, then children, then parents, siblings, and so on. This can generate unnecessary IHT liabilities and family disputes that could have been avoided with a simple will.
Beyond not having a will, the next most common mistakes include failing to use the annual £3,000 gifting allowance each year, not understanding the 7-year rule on larger gifts, and failing to claim the Residence Nil-Rate Band. The RNRB provides an additional £175,000 allowance when a family home passes to direct descendants, and many estates miss it entirely.
Not keeping records of lifetime gifts is another frequent problem. Without records, executors cannot accurately complete IHT400 forms, which triggers HMRC queries and delays.
Failing to review a will after major life events is also common. A will is automatically revoked by marriage in England and Wales. Divorce, remarriage, or the birth of children all warrant an update.
Making a will and reviewing it every 3 to 5 years is the single most effective step to protect your estate and your family.