Talking about what happens to your money after you’re gone can feel uncomfortable. So it gets postponed. And postponed again. Until either something forces the issue, or the opportunity to do it well has slipped away.
That’s a shame, because done thoughtfully, inheritance planning is one of the most meaningful things you can do with your finances.
It’s not just a tax problem
Yes, inheritance tax matters. At 40 per cent above the available thresholds, it can take a significant chunk out of an estate. There are also legitimate ways to reduce that bill. Thoughtful gifting, trusts and other planning tools all have a role, depending on individual circumstances.
But tax is a tool, not a strategy. As the former chancellor Roy Jenkins once put it, inheritance tax is “a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue.”
Families that focus only on minimising tax often miss the more important question: what is your money actually for?
Start with values, not structures
Before thinking about wills or legal documents, it’s worth stepping back and asking some bigger questions.
What does wealth mean to you? Is it security, freedom or the ability to create change? Do you want to preserve it, spend it or direct some of it towards causes you care about? And how much does it matter that future investments reflect your values?
These conversations are often more revealing than the financial ones. Older generations may prioritise stability, while younger ones may care more about climate or social impact. Neither is wrong, but if they are not discussed, misunderstandings can grow.
What history tells us
The Cadbury family built one of Britain’s most enduring legacies, rooted not just in business but in fairness and community. From the model village of Bournville to charitable trusts still active today, their wealth lasted because it was held together by shared purpose.
The Gucci family tells a different story. Without clear governance or common direction, the business became a source of conflict. Disputes played out publicly, control was lost, and a remarkable legacy fractured. The lesson is not that wealth is dangerous. It is that wealth without shared meaning is fragile.
Write it down
One of the most practical steps is creating a simple family constitution. Not a legal document, just a clear record of your values, investment principles and how decisions will be made.
It turns good intentions into something the next generation can actually use. This is especially important for ethical investing. If you care where your money goes, writing it down helps ensure those choices continue.
From entitlement to stewardship
Families who get this right often shift from seeing inheritance as a windfall to seeing it as stewardship. Each generation holds wealth in trust for the next.
That might mean supporting entrepreneurial projects, linking distributions to contribution, or preparing younger family members to manage what they inherit. Done well, it strengthens both finances and relationships.
A word on fairness
Equal does not always mean fair. Whether to divide an estate equally, reflect different circumstances, or include grandchildren are questions with no universal answer. But they are worth discussing openly, ideally before assumptions harden into resentment.
Inheritance planning is not a one-off task. It evolves as your family does. At its heart, it is not really about money. It is about meaning.
When your wealth is aligned with your values, and those values are clearly understood, your legacy becomes something more than a number on a balance sheet. It becomes something that can support your family and reflect what matters to you long into the future.
David Macdonald is Founder of ethical financial planners Path Financial, a Good With Money ‘Good Egg’ company.
This article is in partnership with Path Financial. It is for information only and does not constitute financial advice. Tax treatment depends on individual circumstances and may change.
