How Much Will Your Family Actually Inherit When You're Gone? The Shocking Truth!

t’s a hard truth that most people don’t want to face: the home you’ve worked so hard to provide for your children could be swallowed up by care fees, probate costs, inheritance tax, and more when you’re gone. But how much will your loved ones actually receive after all the dust settles?

The reality is, without proper planning, the inheritance you’ve promised to your family might not be what you think. In fact, for many people, the shocking truth is that their children may inherit very little, if anything at all.

The Hidden Costs of Probate and Care Fees

Probate can be a costly, lengthy process. On average, probate solicitors charge around 4-6% of the estate’s value, and it can take anywhere from 6 to 12 months before your family sees a penny. Meanwhile, maintenance costs on your property continue to add up. It’s a financial drain that leaves families struggling to inherit what they were promised.

But that’s just the beginning. If you need care in your later years, the costs can be astronomical. Dementia care in the UK can cost as much as £75,000 per year. And if you own property, the council won’t help you—meaning your home could be forcibly sold to cover these staggering costs.

Inheritance Tax: A Big Bite Out of Your Estate

On top of care fees and probate, inheritance tax (IHT) can also take a significant chunk of your estate. If your estate is valued above the tax-free threshold (currently £325,000 for individuals, or £650,000 for married couples), anything above this is taxed at a hefty 40%. That means a large portion of your hard-earned assets could go to the government, leaving your heirs with far less than you planned.

The good news is, there are ways to mitigate inheritance tax through proper estate planning, including gifting, setting up trusts, or taking advantage of exemptions. But without this planning, inheritance tax could erode a substantial part of your estate, leaving your family with little to inherit.

A Real-Life Example: The Impact on a Widow's Estate

Let’s consider an example. Imagine a widow who owns a £450,000 home and lives in Greater Manchester. At 86, she is diagnosed with dementia, and over the next three years, she requires full-time care in a residential care home, costing £75,000 per year.

Total Care Fees: £225,000 for three years
Home Value: £450,000
Probate Fees: At an average of 4-6%, probate fees on a £450,000 estate would range from £18,000 to £27,000.
Inheritance Tax: With a £450,000 home, if her total estate value exceeds the £325,000 threshold, the inheritance tax could be as high as 40% on the difference (e.g., £450,000 – £325,000 = £125,000 taxed at 40%, or £50,000 in tax).

Now, let’s calculate what’s left after all these costs:

Starting Estate Value: £450,000
Care Fees: £225,000
Probate Fees: £18,000 to £27,000
Inheritance Tax: £50,000 (if applicable)

This leaves the widow’s heirs with:

Estate Remaining After Care Fees: £450,000 – £225,000 = £225,000
Remaining After Probate and Inheritance Tax: £225,000 – £18,000 to £27,000 (probate fees) – £50,000 (inheritance tax) = £148,000 to £157,000

In this example, £450,000 worth of assets would be reduced to £148,000 to £157,000, leaving the family with a fraction of the inheritance they were likely expecting.

Self-Funding for Care in England and Wales

If you own property in England or Wales, you are considered a self-funder when it comes to paying for care costs. This means that unless you plan ahead, your home, your wealth, and your hard-earned savings could be swallowed up to pay for care, with nothing left to pass down to your children.

The stark truth is that care costs, combined with inheritance tax and probate fees, could leave your family with very little or nothing at all from the home you wanted to leave them.

We Are an Aging Population

With an aging population and a rising number of dementia diagnoses—1 in 3 people over 65 will develop dementia—more and more families are facing the harsh reality of care fees and the financial burden that comes with it. If we do not plan ahead, the costs of care can erode the value of the estate we’ve worked so hard to build.

Can You Protect Your Family’s Inheritance?

Absolutely. Through proper estate planning, you can shield your assets from being wiped out by care fees, probate costs, inheritance tax, and other unforeseen costs. Setting up a trust, making sure your will is up-to-date, and seeking professional estate planning advice can ensure that your children receive the inheritance you intended, rather than watching it disappear into the hands of care providers, the taxman, or creditors.

Don’t Let Your Family Inherit Nothing!

It’s easy to push these tough topics to the back of your mind, but with an aging population and rising care costs, the truth is that your family’s inheritance could be at risk without you even knowing it. Take action today to secure your home, wealth, and legacy for the next generation.

If you want to know how to protect your family’s inheritance from care fees, probate, inheritance tax, and other potential threats, book a free estate planning consultation today.

Your loved ones deserve better than inheriting nothing. Don’t let them face a future without what you’ve worked so hard to leave them.