Millions of families could experience inheritance delays and be charged extra costs over missing documents in their estate planning.
Almost half of British couples, some 47 per cent, have no idea where their partner’s will is stored, according to new research.
The situation worsens considerably when it comes to extended family members, with two thirds of people unable to locate their parents’ wills and 87 per cent having no knowledge of where a sibling’s will might be kept.
The findings from Canada Life highlight a concerning gap in family communication that experts warn could have serious financial repercussions, particularly as inheritance tax rules are set to change.
Experts have warned that the financial pressure could lead to unintended consequences for estate administration | GETTY
Liz Hardie, Tax, Trusts and Estate Planning Specialist at Canada Life, said: “It’s easy to put off conversations about where important documents are kept, but the consequences of not knowing can be serious, particularly as previous Canada Life research has shown that the most common problem encountered by executors of a will is tracking down policy documents.
“Whether it’s delays in accessing funds, missing out on benefits, or facing unexpected liabilities, families could be left in a difficult position simply because they didn’t have the right information at hand.
“Make time for the conversations that matter. Knowing where key documents are kept isn’t just about being prepared for the worst, it’s about making life easier for everyone, whatever the future holds.”
From April 2027, unused pensions will be included in estates for IHT purposes | GETTY
The knowledge gap extends significantly to pension documentation, despite private pension wealth ranking as the second largest component of household assets after property, according to Office of National Statistics data.
More than a third of those in relationships, some 37 per cent, would be unable to locate their partner’s pension paperwork if required.
This figure climbs sharply when considering older generations, with 58 per cent of adults admitting they have no idea where their parents’ pension policies are stored.
The lack of awareness around pension documents is particularly concerning given the substantial sums often involved and the administrative complexity that can arise when attempting to access these funds following a death.
When wills or pension policies cannot be found, those responsible for administering an estate may encounter substantial hold-ups in collecting the necessary information to distribute assets, causing the probate process to slow considerably.
From 2027, pensions will fall within the scope of inheritance tax, placing additional pressure on personal representatives tasked with locating these documents.
Some gifts and property are exempt from Inheritance Tax, such as some wedding gifts and charitable donations | GETTY
Failure to track down relevant paperwork could not only postpone payments to beneficiaries but also heighten the risk of financial penalties should inheritance tax obligations remain unsettled within required timeframes.
The awareness problem extends beyond wills and pensions to other crucial financial records.
Four in ten people would struggle to find their partner’s life insurance policies, whilst 47 per cent could not locate documentation relating to their partner’s debts and loan agreements.