As inheritance tax becomes an increasingly pressing issue for a broader range of clients, protection is moving firmly into the spotlight as a core element of estate planning. In this article for IFA Magazine’s New Insurance and Protection, Catharine Stagg, Managing Director at Stagg Mortgage Services, explores how advisers can use protection to help manage liabilities, preserve family wealth, and support more effective intergenerational planning in today’s evolving landscape.
As more families find themselves navigating the complexities of inheritance tax (IHT) and long‑term wealth preservation, advisers in the wealth space are increasingly recognising that protection is no longer a peripheral conversation. It has become a strategic pillar of estate planning, offering structure, certainty, and liquidity at precisely the moments when families need it most. With frozen thresholds, rising property values, and multi‑generational financial planning now the norm, protection solutions are helping advisers deliver more holistic and future-focused advice.
Using Protection to Fund or Mitigate Inheritance Tax Liabilities
IHT has become a mainstream concern. Many clients who would not traditionally consider themselves “wealthy” now face potential liabilities due to property inflation and diversified asset holdings. For advisers, this creates an opportunity to demonstrate the value of protection as a practical tool for managing these future tax exposures.
Whole of life insurance, particularly when written in trust, remains one of the most effective ways to fund an anticipated IHT bill. The guaranteed payout provides beneficiaries with immediate liquidity, ensuring they are not forced into the distress sale of assets such as property, investment portfolios, or business interests. For families with illiquid estates, this can be the difference between preserving generational wealth and dismantling it.
Protection also supports clients who wish to take proactive steps to reduce their estate’s value. When clients make lifetime gifts, a decreasing term assurance policy can cover the tapering liability during the seven-year period. This gives families confidence to pass on wealth earlier, knowing that any unexpected tax exposure is managed. In this way, protection becomes a facilitator of intergenerational generosity rather than a reactive measure.
Integrating Protection into Estate and Intergenerational Planning
Across the wealth sector, advisers are increasingly embedding protection into broader estate planning conversations. This shift is driven by several key trends shaping client expectations and regulatory standards.
Firstly, clients now expect holistic advice. They want advisers who can connect the dots between investment strategy, tax planning, and long‑term family outcomes. Protection naturally complements these discussions, offering a risk‑management layer that strengthens the overall plan.
Secondly, intergenerational planning has become a core part of advisory work. Advisers are engaging with multiple generations of the same family, often facilitating conversations about legacy, responsibility, and financial education. Protection provides a practical framework for these discussions, helping families plan with clarity and shared purpose.
Finally, Consumer Duty has reinforced the importance of considering all relevant risks and ensuring clients understand the consequences of inaction. For many families, the absence of protection is itself a significant risk. By incorporating protection into estate planning, advisers can demonstrate that they have taken a comprehensive, client centred approach.
