An average £372,000 awaits the top 20pc of millennials, the Institute for Fiscal Studies found. At the same time, the chasm between the haves and have-nots is rising ¬ while annual inheritance transfers will rise a third to £145bn by 2033, one in 10 millennials won’t receive a penny.
With so much more at stake, the number of people wanting a piece of the pie is growing. “It’s much more likely than the generation before that your parents may have divorced, that you might have step-siblings, half-siblings, blended families, and I think that will be a driver,” Rycroft says, of these “competing interests”.
At his practice “half the time is preparing wills and trusts…and the other half is dealing with disputes that arise when it goes wrong”.
That can happen in myriad ways. Osborne points to one case where a beneficiary asked his daughter to manage the inheritance from his father’s estate as he “wasn’t good with the internet”. When he then found a new partner, his daughter “disapproved and became difficult”.
By the time he asked for his inheritance, he was shocked to see it had “dwindled significantly” because his daughter had deducted costs every time he had asked for something.
“Years went by without any communication between them, their relationship broken by misunderstanding and resentment,” he says.
Breakdowns in sibling relationships are a common feature, too. Osborne recalls a case of three “who had always been close”, until one gave up her job so that she could care for their elderly mother. After she passed away, “the will revealed an unequal split of the inheritance, favouring the daughter for her sacrifices”.
This led to fierce arguments. The other two siblings felt betrayed and took the matter to court, spending thousands in legal fees. Ultimately, with legal advice indicating that continuing the fight would amount to more than what they were set to receive, they settled out of court, “but the damage was done; their relationships remain strained and distant”.
Experts add that many people do not realise the overall cost of protracted legal action, imagining they’ll quickly be able to secure a profit, rather than draining their imagined riches on years of legal back-and-forth.
This, on top of 40pc inheritance tax on assets above the £325,000 threshold may result in a financial black hole for those trying to get what they are “owed”. A record £7.5bn was paid in IHT last year, with forecasts suggesting another £2bn hike by the turn of the decade.
