Do you think about the future? Are you in the habit of making to-do lists or new year resolutions? Do you have life goals or expectations of where you hope to end up?
In thinking about your future, you may have thought about the assets you own, the experiences you wish to have and the legacy you wish to leave behind for loved ones. All of these considerations form part of an effective estate planning strategy. As part of this, you may find it useful to seek professional legal advice. A solicitor can help work with you to navigate through life’s obstacles, achieve your personal goals, and give you comfort and peace of mind for the future.
An effective estate planning strategy can be broken down into seven key considerations to help you protect your assets, plan for the future and make your wishes clear.
1. Make a will to set out your wishes
This is fundamental in order to make decisions on a variety of matters of how your estate should be handled when you die, including the distribution of assets, who should look after any children (or pets!) you may have, your funeral wishes and the appointment of an Executor to manage the process. The risk of not putting a Will in place is an increased cost to administer the estate, distribution of assets to parties you did not wish to benefit and additional distress for loved ones.
2.Put a Power of Attorney in Place
This is another key document to have in place for the circumstances where you are no longer able to make financial or welfare decisions for yourself and, instead, allows you to appoint an Attorney in advance to act on your behalf.
The alternative is where an individual has not put in place a Power of Attorney and subsequently loses mental capacity. In these situations, a Guardianship Order would most likely be required and requires to be obtained through a formal court application. This process can be very expensive and time-consuming for loved ones.
3.Review and safeguard your important documents
As time passes, you can find that any existing legal documents you have in place, such as Wills and Title Deeds, or similar arrangements, such as pension nominations and life polices, are stored in different locations or no longer reflect your current circumstances. An exercise in securing these, reviewing their contents and ensuring they are stored safely can ensure that any existing strategy is up-to-date.
4.Get bespoke legal advice on your personal circumstances
Do you have agricultural or business interests? Rental properties or a holiday home? Crypto-assets? A strong social media following? Do you live with your partner as an unmarried couple? Do you have children from a previous relationship? Would you regard any would-be beneficiaries as particularly ‘vulnerable’? As asset types become more varied and family scenarios become more dynamic, it is crucial that you take legal advice from a qualified professional to ensure that the correct and appropriate arrangements are in place.
5.Review your estate value
The recent changes to the rules around Inheritance Tax (IHT), including the forthcoming changes from 6 April 2027 where most unused pension funds and death benefits will be brought into the value of an estate for IHT purposes, as well as a general increase in value of assets, particularly property, means that more estates than ever are becoming liable to IHT on death. The UK Treasury recently forecast that IHT receipts were to double by 2031 to £9 billion, and the number of estates in the UK subject to IHT is expected to increase by 50% to over 37,000 by 2027. The best way to mitigate estate exposure from a potential future tax liability is to take legal and tax advice as early as possible.
6.Encourage conversations about your wishes with loved ones and appointed parties
Unfortunately, estate matters are becoming more contentious, often due to a lack of communication or understanding of a loved one’s true wishes. Communicating your preferences either in person or by writing can often pre-empt later conflicts and clear instructions to your Executors and Attorney can help clarify in their mind what your intentions are. Your legal adviser can assist in identifying potential areas of conflict in your personal circumstances and preparing bespoke letters to document your feelings.
7.Set your estate planning goals and priorities
As part of your overall estate planning strategy, you should consider what your personal priorities are and if you have any specific concerns in achieving these. A legal professional, potentially working alongside a reputable financial adviser, can work together with you and devise a strategy to assist you in achieving your goals.
Regularly reviewing your estate as your circumstances change can help ensure your wishes remain clear and your plan is reflective of this. If you would like advice on effective estate planning, or would like to review your existing arrangements, contact our team to discuss how we can help you plan for the future.
