Estate Planning
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Estate Planning
What is estate planning and why is it important?
It’s always a bit of a miserable topic – we’re effectively talking about what happens when you die and what your plans are going to be. Nobody wants to think about that, but it’s so important to think through what will happen, because it’s inevitable for us all, unfortunately.
Estate planning is just working out what arrangements you want in place. Depending on your circumstances, there might be actions to take that will benefit whoever you want to leave your worldly goods to.
What should be included in an estate plan?
Estate planning is an all-encompassing term for what you want to happen when you pass away. You would include things like a Will, which is really important, and you might make considerations about property or assets you have. How will you want those to be passed on to your beneficiaries? Who will those beneficiaries be?
Depending on the assets you have, you might also consider any tax due and how you want that to be dealt with.
Do I need a Will?
Theoretically, you don’t need a Will, but I cannot stress strongly enough how important it is to have one. When you do pass away, even for somebody with pretty simple assets, it can take a long time, a lot of expense and hassle if you don’t have that Will in place to say exactly what you want to happen.
It doesn’t need to be complicated. Most people find it’s quite clear who they want to leave things to. If you’re married, for example, the default is for everything you have to go to your spouse. People wonder if they need a Will if that’s the plan – but it makes everything cheaper and quicker if you do.
It doesn’t need to be complex or expensive. Some people do get very carried away and state which ornament on the mantelpiece should go to the woman down the road. But it can be something simple and relatively future-proof.
For example, when we got married, we made a Will leaving everything to each other and any future children. It meant we could have that in place for a long time.
Do I need a Power of Attorney?
This all ties in, and it’s so important to consider these things – although again, technically, you don’t need a Power of Attorney. What it does is give somebody else the ability to act on your behalf, should you become incapacitated.
It’s hugely helpful. A lot of people associate that with older age and becoming incapacitated through ill health, but there are many other reasons why it’s useful to have.
A Will is a basic requirement and really important. A Power of Attorney makes it a lot simpler for somebody to carry out your wishes. For example, if you’ve got bank accounts or assets that are in your name only, granting Power of Attorney makes it simpler for the person left behind to access those and deal with them as you want them to.
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Do I need to consider care provisions in estate planning?
Again, you don’t need to, but it’s certainly a very good idea. With Power of Attorney, if you do become incapacitated, somebody can carry out your wishes and act on your behalf. It’s a good idea to have thought about what those wishes might be and to make those clear. You can just write your preferences down, or make it official.
It certainly does help, particularly if you’ve got strong opinions about how you would like to be looked after. Nobody expects to become incapacitated at any point, so thinking about it when you’re fit and well can be very beneficial. It also gives your loved ones reassurance that they’re doing what you would want.
What should I plan to do with my pension?
This is a good question. One of the most important things you can do before you reach pensionable age is to name a beneficiary on your pension. Most pension products allow that. We always recommend you to name who your pension should go to in the event of your death.
For example, if your plan was to leave it to your spouse but you also have children, we usually recommend declaring your spouse as a beneficiary, and naming your children as alternative beneficiaries.
Then, the people who are winding up your estate can consider giving the pension to your children rather than your spouse. Depending on when it happens, that could be more advantageous to everyone. It just gives you more options and future proofs those plans.
What is inheritance tax?
I need to give the caveat that it depends on your circumstances and this isn’t a substitute for personal advice. If you leave behind an estate combining all your assets and cash, and that’s over a certain value, inheritance tax is applied to that amount of money. That’s paid to the government before the rest is paid to your beneficiaries.
Can estate planning specialists ensure I don’t pay too much inheritance tax?
If you have a financial planner, which is a very good thing to have, they will always be considering all the taxation regimes that could affect you. They will highlight ways you can operate as efficiently as possible.
It’s never about avoiding tax. It’s about managing it, being aware of it and understanding the implications for your beneficiaries. You might want to take action before you die to make sure that things are as you would want them to be.
How do I make a gift as part of estate planning?
Usually you would state a gift in your Will. But, depending on your personal circumstances, you might choose to make gifts whilst you’re alive. That will potentially impact the final inheritance tax bill, so it’s definitely something to discuss with a financial planner.
What do family estate planning services do?
All of this comes under the umbrella of financial planning. We quite often work with whole families on their financial planning.
We’re interested in growing your assets, investments and pensions while everyone’s well and alive. If we know the whole family, it helps us plan for that inevitable situation. We can look holistically at how things would move down.
The family side of things can be even more critical if you’ve got a family business. There’s been a lot in the news lately around farms and estates with assets, land and property that people would expect to pass down through generations. For people in those circumstances, it’s really important to make sure that you’ve got proper plans in place.
You’ve demonstrated how a financial advisor can help. Have you got anything else to add?
Working with a financial planner is very much about building a relationship where the planner gets to know you and your objectives. It’s really positive – we look at facilitating your objectives whilst you’re alive and full of beans to help you achieve wonderful things.
A lot of my time involves talking to clients about once-in-a-lifetime holidays or retiring early to enjoy life. Generally, it’s really positive. But an extension of that is to think about estate planning and what happens when you’re no longer here. People do find it a little bit morbid, but it absolutely can be part of a positive conversation.
Key Takeaways:
- Estate planning is essential for determining the arrangements for your assets, property, and beneficiaries after death, even though it can be a difficult topic to consider.
- A Will is a basic and highly recommended requirement, as having one in place makes the process of dealing with your estate cheaper and quicker, preventing long delays and expense.
- A Power of Attorney is hugely helpful because it allows someone else to act on your behalf if you become incapacitated, which simplifies accessing and dealing with assets in your name.
- You should name a primary beneficiary and consider alternative beneficiaries on your pension before reaching pensionable age to provide flexibility and future-proof your plans.
- Financial planners assist with managing inheritance tax, focusing on awareness and operating as efficiently as possible, which includes considering the impact of making gifts while you are alive.
Will writing and Power of Attorneys are not part of the Quilter Financial Planning offering and is offered in our own right. Quilter Financial Planning accept no responsibility for this aspect of our business.
Will Writing, Estate Planning, Tax planning including Inheritance Tax Planning and Powers of Attorneys are not regulated by the Financial Conduct Authority.
The value of pensions & investments and any income from them can fall as well as rise. You may not get back the amount originally invested.
Approver Quilter Financial Services Ltd. March 2026