If your worldly wealth is above a certain threshold, your heirs could face a hefty bill - in fact, HMRC collected more than £5.2bn in inheritance tax during 2018. So, what can you do to minimise tax?
The amount of inheritance tax received by HMRC has gradually been creeping up over recent years, though 2018 figures show a slight dip.
The rules can be tricky, but there are ways to avoid paying more inheritance tax than you need to. Which? explains how the system works and what you can do to cut your bill.
Between 2010 and 2018, the amount of inheritance tax collected by HMRC almost doubled across the UK, according to figures released at the end of January.
This can be explained partly by the rising value of property, as the market recovered following the 2008 financial crisis.
While receipts fell slightly from 2017 to 2018, with a drop of 1.7%, the 2018 figures are still provisional - meaning they may rise as HMRC aligns its records.
Despite these most recent trends, inheritance tax may continue going up, with the Office of Budget Responsibility estimating receipts could hit £5.5bn in the 2018-19 tax year, and £6.9bn by 2023-24.
The current inheritance tax rate is 40%, but you won't pay that on your full estate and there are circumstances where you may pay nothing at all.
Find out how the rules work and what you can do to reduce your bill.
As of April 2017, your bill will also be less if you leave your main home to a direct descendant - meaning a child or grandchild. This allowance is £125,000 in the 2018-19 tax year, and will rise again to £150,000 in 2019-20.
So, if your estate includes your main home and your child is your heir, you could leave behind £450,000 tax-free this year.
If your estate is worth more than £2m, though, the extra property allowance tapers off.
Anything you leave to your spouse is tax-free, meaning if you leave everything to your married or civil partner, your estate won't pay any tax at all.
What's more, your partner can apply any of your unused allowances to their own estate - in some cases, doubling their tax-free threshold.
Keep in mind that this only applies to married couples or civil partners. Unmarried couples can't benefit, even if they live together or have children.
Any amounts you leave to a registered charity, political party or sports club are tax-free, which you could use to bring your estate under the tax-free threshold.
And if you leave more than 10% of your taxable estate to an eligible group, the tax rate on the remainder will fall from 40% to 36%.
Giving away money during your lifetime can bring down the bill and put more money in your heirs' hands.
Each tax year, you can give away up to £3,000 tax-free, split however you like. You can also give unlimited gifts of up to £250. There are higher thresholds for wedding gifts, allowing you to give up to £5,000 to your children.
Above this, any gifts you make within seven years of your death could incur tax, although it will depend on whether the gift is above your tax-free threshold and when it was made.
If the policy is written into trust, the payout shouldn't form part of your estate.
That said, purchasing cover may be quite expensive unless you're relatively young and healthy, so you should weigh this up carefully.
There's a common misconception that you can simply put your property in a trust to avoid inheritance tax.
While the tax treatment of trusts can be beneficial in some cases, the rules are complex and you may end up paying more.
You'll need to pay 20% inheritance tax on anything above the tax-free allowance when you first set the trust up. You'll then pay 6% on each 10-year anniversary, and another 6% when the trust is closed.