Rising property prices, on top of increased pension wealth, mean the baby boomer generation is in a position to pass on significant assets to their loved ones.
Estates liable for inheritance tax face an average bill of nearly £175,000 each, according to pension provider Prudential.
Yet, less than a fifth of over 55s have taken action to reduce liability – despite death tax being one of the easiest taxes to legally avoid.
Setting up trusts, gifting assets and taking out life insurance are just a few of the ways to limit the impact of the dreaded duty.
But fewer than one in 10 are seeking financial advice, making gifts to family members or establishing trusts, showed the study.
It comes as three-quarters said they want some control over how the inheritance is spent, with a third wanting to make sure grandchildren benefit.
Les Cameron, tax expert at Prudential, said: “Record house prices are one reason why inheritance tax receipts are rising fast.
“In 2012/13 fewer than 18,000 estates had an IHT bill but the Government says that there will be 41,000 taxpaying estates in 2015/16 and that IHT receipts will hit £6.2bn by 2021/22.
“Reducing inheritance tax bills is relatively straightforward.”
Mr Cameron added: “People need to strike the right balance between giving their wealth away during their lifetime to reduce the size of their estate, and maintaining some form of control after their death over who can access it and when.
“To help ensure efficient inheritance tax planning, obtaining financial and legal advice should be money well spent.”