Finns plan funerals more often than they prepare for inheritance tax

By admin On Aug 30, 2025

Photo: ICPonline

A growing number of Finns are preparing for their own deaths by organising funerals and securing life insurance, but far fewer are considering the inheritance tax implications for their heirs.

According to a survey by insurance provider LähiTapiola, most people begin addressing end-of-life matters around age 60. The most common steps include purchasing life insurance (34%), discussing finances or practicalities with family (27%), and drafting a will (19%).

The survey, which gathered responses from 1,100 adults across Finland, found that preparations intensify with age. Among those aged 65–74, 41% had written a will and 37% had discussed death-related matters with loved ones.

Veera Lammi, director at LähiTapiola’s life insurance division, said early planning can provide greater financial protection, especially during the high-risk years of family life.

“For many, this is the time when there are children to support, limited income, and heavy loans,” Lammi said. “That’s when the financial impact of death is greatest.”

In families with children, life insurance is the most common form of preparation. Over 40% of households with minors hold a policy. More complex arrangements, such as wills and beneficiary designations, often follow later in life.

“It’s natural to postpone practical decisions, but they shouldn’t be delayed indefinitely,” Lammi said. “Wills and beneficiary instructions should be reviewed regularly to ensure they reflect the current situation. And it’s important to check that the life insurance payout is sufficient.”

Despite growing awareness around financial planning, inheritance tax remains largely ignored. Only 13% of respondents had tried to estimate what their heirs might owe.

“Inheritance tax is one of the most disliked taxes in Finland, yet very few people have calculated how much they’re leaving behind. It’s a blind spot,” Lammi said. “Even among those over 75, only one in four had considered the issue. In the highest income group, the share was no higher.”

Lammi noted that more people reported planning their own funeral than calculating potential tax liabilities. According to the survey, 21% of women had considered funeral arrangements, compared to just 10% of men.

“Men might focus more on financial security, while women may think more about emotional aspects. Both are important,” Lammi said.

For many heirs, the inheritance tax can come as a surprise. The most common solution is to sell inherited property, but that’s not always feasible or advisable. In some cases, families dip into savings or take out loans. According to an earlier survey by LähiTapiola, nearly one in ten Finns have taken this route.

Lammi recommends estimating the potential tax burden early and considering options such as early transfers or gift planning to ease the future process.

One particularly difficult scenario occurs when one parent dies and the only asset is the family home. In this case, the child may face a tax bill without having the means to pay it. The property cannot be sold without the surviving spouse’s consent, leaving the situation unresolved for years.

LähiTapiola’s survey, titled Arjen katsaus, also revealed gender differences in approach. Men were six percentage points more likely to hold life insurance, while women were twice as likely to have planned their funeral.

Source: www.helsinkitimes.fi