Building wealth doesn’t happen by accident. Most people work for decades to pay off a mortgage, grow savings, invest carefully and secure pensions that promise a better life for themselves and their families.

But the reality is that building wealth and passing it on are two very different things. Without proper planning, a lifetime’s work can be eroded by tax, caught up in legal delays, or, worst of all, go to people you never intended to benefit.

The risk of assuming it’s all covered

Many people assume that because they have life insurance, a pension, or joint property, their family is protected automatically. Unfortunately, the UK’s legal system doesn’t always match these assumptions.

• Jointly owned homes may pass to a surviving co-owner, but not always in the way you expect — and not always tax-efficiently.
  
  
• Pension pots usually fall outside your estate, but without an up-to-date nomination, trustees may have to guess your wishes.
  
  
• Life insurance that isn’t in trust can land inside your taxable estate, reducing the amount your loved ones receive.
  
  
• Savings, investments and personal possessions are governed by your Will — or by intestacy rules if you have none.
  
  

A gap or contradiction in any one of these can cause extra costs, conflict or stress at a time when your family least needs it.

How wealth can leak away

Inheritance Tax (IHT) is often the biggest drain on an estate if no planning is in place. For example, the standard IHT rate in the UK is 40% on everything above your allowances (which includes your main residence and other assets).

Simple oversights can mean:

• Life insurance payouts increasing your estate’s taxable value.
  
  
• Missed opportunities to use the residence nil-rate band effectively.
  
  
• Children or dependants inheriting assets at the wrong time, triggering avoidable tax charges.
  
  

Good planning can’t remove tax altogether, but it can reduce it legally and fairly — leaving more for your chosen beneficiaries.

The building blocks of a sound succession plan

Passing on wealth well usually involves:

• A clear, valid Will — up to date with your family and asset situation.
  
  
• Trusts where appropriate — for example, to hold money for young children until they reach an age you decide.
  
  
• Up-to-date pension nominations — to ensure benefits go directly to the right people and avoid unnecessary delay.
  
  
• Life insurance written in trust — so payouts skip probate and do not increase your taxable estate.
  
  
• A Lasting Power of Attorney (LPA) — so someone you trust can handle your financial affairs if you lose capacity before death.
  
  

How it works in practice

Take Michael and Aisha. They owned a family home worth £600,000, had life cover equal to their mortgage, and healthy ISAs and pensions. They assumed their joint ownership and insurance would cover everything.

When Michael died suddenly, his share of the house passed automatically to Aisha — but the life insurance, not written in trust, was caught up in probate, adding to his estate’s value and pushing it into the IHT bracket. Aisha had to pay an unexpected tax bill and wait months for funds that should have cleared the mortgage immediately.

With a trust arrangement and an updated Will, they could have avoided the delay, reduced tax exposure, and secured the house outright with minimal hassle.

The real value: security for those left behind

A well-planned succession approach doesn’t just reduce tax and paperwork — it protects relationships. Family tensions often flare when money is involved, especially if instructions are unclear or perceived as unfair.

Clear, joined-up documents mean:

• Loved ones know exactly what you intended.
  
  
• Disputes are less likely.
  
  
• Executors and trustees can carry out your wishes without guesswork.
  
  

In short, good planning gives your family space to grieve and rebuild, instead of fighting over money and paperwork.

What to consider now

If you’ve spent years building your wealth, ask yourself:

• Do you have a Will that genuinely reflects your wishes today?
  
  
• Are your pension and life cover set up to pay out tax-efficiently?
  
  
• Would your family know who to contact and what steps to take if something happened tomorrow?
  
  

Good advice and clear legal arrangements make sure what you leave behind does what you want it to — without surprises, stress or unnecessary cost.

A final thought

Wealth is more than numbers on paper — it’s the security and opportunities you hope to pass on. Make sure your plan for passing it on is as carefully built as the plan you used to earn it.