As we look ahead to 2024, the landscape of estate planning is set to experience a continuation of familiar challenges, but also a swathe of new opportunities.
The interplay of factors such as the ageing population, interest rates, legislative changes and shifting societal attitudes will shape the market in new ways. In this blog, we explore our predictions for next calendar year and some trends we believe will define estate planning in 2024.
Smaller firms will need to embrace innovation.
We’re predicting a lot of growth in larger legal service firms. As current leadership teams decide they want to retire and the consolidation of smaller firms continues, we may see the number of registered law firms that do estate planning continue to shrink.
However, smaller legal firms can differentiate themselves through digital transformation, or by offering more holistic services or through their marketing and branding.
There will be plenty of opportunity.
The estate planning market is worth £2.4bn and we predict it will continue to grow. More families are hitting the inheritance tax threshold, Millennials require Lasting Powers of Attorney for their ageing parents and the pension triple lock means more Baby Boomers can afford legal services. There will be plenty of opportunity in 2024.
Even as larger law firms gobble up more market share, the market is still enormous with plenty of opportunity for growth for many.
Inheritance Tax won’t be scrapped but could be reformed.
Statista predicts that inheritance tax receipts will hit £7bn in 2024. It’s not an insignificant amount, it will continue to rise, and the government have already ruled out tax breaks.
However, inheritance tax resonates strongly with the Tory voter demographic, many Baby Boomers vote Conservative, so reforming it could win some much-needed favour.
The Great Wealth Transfer, Millennials and Baby Boomers
A record £5trillion will be passed from the Baby Boomer generation to the Millennial generation over the next 30 years. The oldest Baby Boomer will be 78 in 2024, meaning the Great Wealth Transfer is already underway.
The Baby Boomer generation are conscious of how the cost-of-living crisis is affecting their children and grandchildren, and we predict that early inheritance gifting could increase over the next few years. Meaning more people will need to update their estate plans more frequently, or perhaps, make them more flexible over the longer term. We may also see people requiring more advice around gifting, the different ways they can gift and how this will impact their financial position over the longer term.
Long term care will need to become an essential part of planning.
We predict that people will want more autonomy over their health care decisions. As people are living longer, it has become more important to help people understand their options and how these options can be built into their estate plan. The use of Advanced Decision documents could increase as demand for this type of planning rises, especially if Lasting Power of Attorney wait times continue as they are.
Millennials will need support when organising Lasting Powers of Attorney for their parents for this reason too. Providing advice and services online for this demographic will help reach the next generation of clients for law firms.
Digital transformation, LPAs and online Wills.
The Powers of Attorney Act which will bring paper-based processes online for the first time, will make the system quicker and easier to access. We predict that the sector will continue to digitally transform processes to drive greater efficiencies and provide better client experiences. We could see digital Wills and signatures too.
More people will look for estate planning services online and therefore having a digital footprint will become more important.
In conclusion, the estate planning market in 2024 presents both challenges and opportunities. Smaller firms can thrive by embracing innovation, and there is ample room for professionals to adopt a more holistic approach. As IHT reform looms, staying informed about legislative changes becomes paramount. The interplay between the Great Wealth Transfer, changing generational dynamics, and the essential role of long-term care planning shapes a landscape where estate planners can add significant value by providing comprehensive, personalised, and forward-thinking services.
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