Over three in five (63%) advisers have reported encountering family disputes while assisting with inheritance tax (IHT) planning, according to new research from Downing.

The investment manager’s study with financial advisers and wealth managers found that family disputes are more likely during IHT planning than when estates are settled, after just 26% questioned said they had experienced family tension over estates.

Downing’s research, based on interviews with 100 UK advisers, revealed that 11% of respondents had never experienced any family disputes over either IHT planning or estate related.

Thirty per cent of advisers said they “always” ensure other family members are involved when clients initially contact them about IHT planning, and a further 58% say they “usually” do, while 10% said their first meeting is with the client before involving other family members. Just 2% said their policy was to exclusively communicate with the client.

Downing said its study also indicated that most wealth managers and advisers regard involving clients' families in IHT planning as beneficial to their business. The study found that 74% of those questioned believe that involving family members in IHT planning is an important part of growing their business, while another 23% agreed that while involving family is beneficial to their business, it is not the only reason they do so.

“Inheritance can be emotive for families and that is certainly reflected in the experience of advisers,” head of retail sales at Downing, Mark Dunn, said.

“It is striking that advisers see more family disputes during IHT planning rather than over estate settlement, possibly demonstrating the wisdom of involving families from the start. It is also generally good for adviser businesses to involve family members in IHT planning as it introduces the adviser to the next generation which could help make them a client in the future.”

---