Clients do not fear tax – they fear loss

This article was co-authored with Dr Alan Whittle.

Inheritance Tax (IHT) planning is often framed as a technical exercise. Calculations, thresholds and reliefs tend to dominate the conversation. But in practice, the advisers who do this best are not always the most technical. They are the ones who understand what is driving client behaviour in the first place, and it starts with how people experience loss.

The science of loss aversion

Loss is not just a market concept. It is something clients keenly feel when money moves from one area to another. Giving assets to children, placing funds into trust, or committing to a long-term plan can all trigger a sense that something is being taken away. Research consistently shows that losses are felt more acutely than gains of the same size. Daniel Kahneman and Amos Tversky made the observation in 1978, and several studies have expounded the theory of loss aversion since.

This understanding of human nature matters greatly in estate planning, where decisions often involve parting with assets built up over a lifetime. When advising people on giving money away or transferring money to the next generation or subsequent generations, it’s important that they don’t feel like they are losing the pot of money built up throughout their lifetime.

Applying loss aversion to IHT

The same dynamic applies when discussing an IHT liability. Setting out the numbers in pounds and pence can be powerful, but it is also, in effect, presenting the client with a potential loss. Doing this can prompt action, but it can also lead clients to react emotionally or take decisions they might not otherwise have made.

For advisers, the point is not to avoid these conversations, but to recognise what is happening beneath them. Clients are not just choosing to mitigate tax, but are often responding to how the situation makes them feel. That is where language starts to matter.

Helping advisers have better conversations around IHT

Much of the adviser industry still talks about inheritance planning. The term itself focuses on a single moment in time, the moment when wealth passes down from one generation to the next. But that framing is narrow, because it reduces what is often a long-term process into a single event.

A more useful way to think about it is legacy.

Legacy planning shifts the focus away from tax and towards positive future outcomes. It opens clients up to a broader conversation about what it is they want their wealth to achieve – not just who receives it, but how it is used and what difference it makes. That slight change in framing and language can transform a discussion. Instead of focusing on what might be lost to tax, advisers are able to focus on what will be gained by the next generation. The emphasis moves away from ‘death and taxes’ towards a far more emotionally appealing ‘love and legacy’.

Practical tools

Having more positive estate planning conversations often depends on turning abstract numbers, or pounds on a page, into something far more tangible. Clients become more engaged in the process when those numbers are translated into real-world outcomes. For example, what does leaving someone an inheritance of £200,000 mean in practice? It might mean that a grandchild can buy a home, clear their student debt or start a business. It might mean security, or it might mean opportunity. Those distinctions matter, because people do not all think about money in the same way. For some, it offers reassurance. For others, it represents freedom or enjoyment. Good financial planning can therefore build a connection from the numbers to the underlying motivations.

Involving families in legacy decisions

And of course, estate planning is rarely about individuals in isolation. It is about families. Bringing the next generation into the conversation can be an important part of that process. Their priorities may not be the same. Increasingly, younger beneficiaries may place greater emphasis on social or environmental outcomes, or have different expectations about how wealth should be used. Understanding that early can help shape a legacy that is both meaningful and sustainable.

There is another practical dimension to estate planning that advisers need to take on board: preparing wealth for the next generation is one part of the task; preparing the next generation for that wealth is just as important. Without it, there is a risk that the intended legacy is not realised in the way the client had hoped.

Why adopt this people-first approach?

For advisers, estate planning should not just be about mitigating an IHT liability, but a way to help clients think through a set of later life trade-offs; how much to retain, how much to give, when to act, and balancing their own future needs with the desire to support others. Rather than being purely a technical discussion, it’s a conversation that reaches into the core of financial planning, family dynamics and personal values. And the reward for getting it right is significant. Clients are more likely to act when the plan feels relevant and aligned with what matters to them. Conversations become more constructive, and the decisions they make leave them feeling positive about the future.

Estate planning does not have to be framed around death and taxes. Instead, it can be framed around purpose, impact and the role wealth plays across generations. In that sense, the aim is simple: move the conversation from what clients risk losing to what they want to achieve, and the differences their decisions will make. By making the legacy more meaningful than the money, estate planning becomes something clients feel genuinely empowered by.

Important information

The content of this article is provided for information purposes only and does not constitute financial promotion or investment advice. The views expressed in this article are those of the authors and can change at any time. The content of this article is provided by Triple Point. In providing this document, Triple Point undertakes no obligation to procure any additional information or to update this document or to correct any inaccuracies. Triple Point is the trading name for the Triple Point Group, which includes the following companies and associated entities: Triple Point Investment Management LLP registered in England & Wales no. OC321250, authorised and regulated by the Financial Conduct Authority no. 456597, Triple Point Administration LLP registered in England & Wales no. OC391352 and authorised and regulated by the Financial Conduct Authority no. 618187, and TP Nominees Limited registered in England & Wales no.07839571, all of 1 King William Street, London, EC4N 7AF, UK.