Why People Don’t Plan Their Inheritance

Written By: New Alliance
30 Sep 2024

Inheritance Planning

In Ireland, several factors can prevent people from engaging in inheritance planning or executing a will. These barriers can be practical, emotional, or based on misunderstandings about the process and its importance.

Here are some common reasons:

Procrastination

Lack of Urgency

As with many areas of financial planning people put off making a will or engaging in inheritance planning because they believe they have plenty of time or that it’s not an immediate priority.

Avoidance

Thinking about death and the distribution of one’s estate can be uncomfortable, leading people to delay the process.

Misconceptions and Lack of Awareness

Complexity

Often people believe that inheritance planning is too complex, expensive, or only necessary for the wealthy, leading them to avoid it.

Assumption of Automatic Distribution: There’s a common belief that assets will automatically go to immediate family members, which can lead people to think a will isn’t necessary.

Emotional and Family Dynamics

Family Tensions

Some people avoid making a will or planning their estate because they fear it will cause tension or disputes among family members.

Denial and Superstition

There can be a psychological barrier where individuals don’t want to confront their mortality, leading to a superstitious belief that making a will might somehow hasten their death.

Imperfect Situations

often a potential beneficiary has issues like drug, alcohol or gambling addictions which will not benefit from an increase in wealth. Bringing these issues to light can be uncomfortable and can go unaddressed.

Cost Concerns

Perceived Expense

The perceived cost of engaging a solicitor or financial advisor for inheritance planning can deter people, especially if they think their estate isn’t large enough to justify the expense.

Prioritization of Immediate Financial Needs

Some individuals prioritize current financial demands over future planning, viewing inheritance planning as a lower priority.

Uncertainty About the Future

Changing Circumstances

Life changes, such as the birth of children, divorce, or changes in financial status, can make people hesitant to finalize a will, fearing it may quickly become outdated.

Unclear Legislation or Tax Implications

Some may be uncertain about the laws and tax implications related to inheritance, causing them to delay planning until they understand the rules better.

Lack of Guidance

No Access to Professional Advice

Without proper advice or understanding of the importance of estate planning, people may not know where to start or how to proceed.

Overwhelming Options

The variety of options available for estate planning, such as trusts, wills, and lifetime gifts, can be overwhelming, leading to inaction.

Cultural Attitudes

Cultural Norms

In some cases, cultural attitudes towards death and inheritance can influence whether people engage in planning. In Ireland, there may be a reluctance to discuss death or financial matters openly within families, contributing to delays in estate planning.

Fear of Change

Perceived Finality

Some individuals may fear that creating a will is too final and may be reluctant to make decisions that feel irreversible.

Control Issues

There might be a reluctance to give up control over assets or make decisions that could impact family members, especially if there are uncertainties about how they will handle their inheritance.

While there are many reasons why people in Ireland might avoid or delay inheritance planning and executing a Will, overcoming these barriers is crucial. Without proper planning, the risks of intestacy, family disputes, and higher tax liabilities increase, which can lead to significant financial and emotional costs for loved ones.

By addressing these concerns and seeking professional guidance, individuals can ensure that their assets are distributed according to their wishes, and their family’s future is secured.