Estate planning is the process of organising your affairs so that your wishes are clear, the right people can act for you, and your property and money can be dealt with as smoothly as possible.
It is not only about what happens after death. A complete plan also considers what would happen during your lifetime if illness, injury or loss of mental capacity made it difficult for you to manage your finances or make health and care decisions.
For many people, estate planning brings together a will, Lasting Powers of Attorney, property ownership, beneficiary nominations, tax considerations and practical information for the family.
This guide explains estate planning in England and Wales, what it may include and when it is sensible to review your arrangements.
What does estate planning mean?
Estate planning means looking at your circumstances as a whole rather than treating each document or decision in isolation.
Your estate may include:
- your home and other property;
- bank and building society accounts;
- investments;
- business interests;
- personal possessions;
- digital assets;
- life assurance policies; and
- certain pension or death benefits.
Estate planning considers how those assets are owned, who should benefit, who should make decisions if you cannot, and whether your documents work together.
The aim is not to predict every future event. It is to put clear, practical arrangements in place and review them as circumstances change.
Is estate planning only for wealthy people?
No. Estate planning can be useful whenever somebody owns property, has savings, supports another person or wants to choose who should make decisions for them.
A straightforward estate plan might involve:
- a valid will;
- Property and Financial Affairs and Health and Welfare LPAs;
- clear executor appointments;
- up-to-date pension and insurance nominations; and
- a secure record of important information.
More complex circumstances may require additional advice, particularly where there are business interests, overseas property, trusts, significant tax considerations, farming assets, a blended family or a beneficiary who needs ongoing support.
What is included in an estate plan?
A valid and up-to-date will
Your will explains who should receive your estate after your death and appoints executors to administer it.
It can also:
- name guardians for children under 18;
- leave specific gifts;
- provide substitute beneficiaries;
- create trusts where appropriate;
- set out funeral wishes, although these are not normally binding; and
- explain how the remainder of the estate should be divided.
A will must be signed and witnessed correctly to be legally valid. Without a valid will, the intestacy rules decide who inherits. Read our guides to what happens if you die without a will and how often you should update your will.
Choosing suitable executors
Executors are responsible for administering your estate.
They may need to identify and value assets, settle debts and tax, apply for probate, maintain estate accounts and distribute the estate according to the will.
The role should be given to people who are trustworthy, organised and willing to act. Replacement executors can provide continuity if an original executor cannot take on the role.
Our guide to choosing executors explains the points to consider.
Lasting Powers of Attorney
A will only operates after death. It does not authorise anybody to manage your affairs during your lifetime.
Lasting Powers of Attorney allow you to choose trusted people as attorneys while you have mental capacity.
There are two types:
- Property and Financial Affairs LPA: may cover money, accounts, bills, pensions, investments and property.
- Health and Welfare LPA: may cover care, residence, medical treatment and life-sustaining treatment where specific authority is given.
Family members do not automatically have decision-making authority. Learn more in our guides to Property and Financial Affairs LPAs, Health and Welfare LPAs and LPAs compared with deputyship.
Property ownership
How property is owned can affect what happens on death.
Joint owners may hold a property as joint tenants or tenants in common.
Broadly:
- with a joint tenancy, the deceased owner’s interest normally passes automatically to the surviving joint owner;
- with a tenancy in common, the deceased owner’s share passes under their will or the intestacy rules.
The form of ownership should be checked rather than assumed. A will cannot usually redirect an asset that passes automatically by survivorship.
Changing ownership can have significant legal, tax, mortgage and care-funding consequences, so tailored advice may be required.
Pensions, life assurance and nominations
Some pension and life assurance benefits may pass outside the will.
Providers often ask for an expression of wish or beneficiary nomination. Although the legal effect varies between arrangements, outdated nominations can create uncertainty or delay.
An estate-planning review should check:
- which schemes and policies exist;
- whether beneficiary details are current;
- whether the arrangements are written in trust;
- what discretion the provider or trustees retain; and
- how the benefits fit with the overall plan.
Specific pension, insurance or financial advice should come from an appropriately authorised adviser.
Trusts where appropriate
A trust can separate legal control of assets from the people intended to benefit from them.
Trusts may sometimes be considered where:
- a beneficiary is under 18;
- a beneficiary has a disability or needs ongoing support;
- there is a blended family;
- assets should be managed over time;
- there are business or property interests; or
- the person making the will wants to provide flexibility for changing circumstances.
Trusts are not automatically suitable, and they can create administrative, tax and reporting responsibilities. The structure and wording should be appropriate to the individual circumstances.
Inheritance Tax considerations
Inheritance Tax can be relevant when a person dies and may also be affected by lifetime gifts, trusts, exemptions and reliefs.
The rules and thresholds can change, and the outcome depends on factors such as:
- the value and composition of the estate;
- who receives the assets;
- whether a home passes to qualifying descendants;
- gifts made during lifetime;
- business or agricultural assets;
- trust arrangements; and
- the availability of unused allowances from a spouse or civil partner.
Estate planning should not be reduced to trying to avoid tax. Any tax planning should be lawful, properly documented and balanced against your need for financial security and access to assets during your lifetime.
For individual tax advice, speak to a suitably qualified tax adviser or other appropriate professional.
Planning for later-life care costs
An estate-planning review may also consider how later-life care needs could affect income, savings, property and decision-making.
Planning for later-life care costs is not the same as guaranteeing that assets can be protected or that care fees can be avoided. Eligibility, charging and funding outcomes depend on individual circumstances and the rules applying at the relevant time.
Deliberately giving away or restructuring assets to reduce care charges can be examined by a local authority and may not produce the intended result.
A balanced approach considers:
- your likely income and expenditure;
- where you may wish to live;
- what support may be available;
- who can make decisions if capacity is lost;
- the needs of a spouse, partner or dependant; and
- your need to retain enough resources for your own wellbeing.
Advance Decisions and care wishes
An Advance Decision to Refuse Treatment allows an adult with mental capacity to refuse specified medical treatment in advance for a time when they may lack capacity.
It is different from a Health and Welfare LPA, although the two documents may interact. Their dates, wording and scope should be considered together.
People may also record broader care wishes and preferences, although an informal statement does not have the same legal effect as a valid Advance Decision.
Learn more about our Advance Decisions to Refuse Treatment service.
Business succession
Business owners may need to coordinate their personal estate plan with:
- company articles;
- shareholders’ or partnership agreements;
- key-person or shareholder protection insurance;
- business property ownership;
- management succession;
- employment arrangements; and
- tax planning.
A will alone may not determine what happens to every business interest. Specialist legal, tax, accounting and financial advice may need to work alongside the will-writing process.
Digital assets and online accounts
Modern estates often include digital information and online assets.
Examples include:
- email accounts;
- cloud storage;
- online banking and investment accounts;
- social media;
- online businesses;
- websites and domain names;
- digital photographs; and
- cryptocurrency or other digital assets.
A practical record can help executors identify accounts, but passwords and security details must be stored carefully. Account terms, access rights and the legal ownership of digital assets should also be considered.
How does estate planning help during your lifetime?
Estate planning is sometimes described only as deciding who inherits. That overlooks the lifetime part of the plan.
During your lifetime, planning may help by:
- giving chosen attorneys clear authority;
- recording health and care preferences;
- organising important documents;
- clarifying ownership and beneficiary arrangements;
- reducing uncertainty if you become unwell; and
- making it easier for trusted people to understand what needs to be done.
These arrangements do not remove every difficult decision, but they can provide a clearer structure for the people supporting you.
How does estate planning help after death?
After death, a coordinated plan may help executors and beneficiaries understand:
- who has authority to administer the estate;
- where the original will is stored;
- which assets form part of the estate;
- which assets pass outside the will;
- who should inherit and in what proportions;
- whether trusts are involved;
- what liabilities and tax matters must be addressed; and
- who should receive important personal information or possessions.
Clear planning cannot guarantee that probate will be quick or that disagreement will never arise. It can, however, reduce avoidable ambiguity and make the intended arrangements easier to follow.
Estate planning is more than making a will
A will is central, but it is only one part of the picture.
For example:
- a will cannot authorise an attorney to act during your lifetime;
- an LPA does not decide who inherits after your death;
- a pension nomination may operate separately from the will;
- joint property may pass automatically to a surviving owner;
- an Advance Decision deals with specified medical treatment rather than inheritance; and
- a trust may require trustees to manage assets after death.
Effective estate planning checks that these separate arrangements do not contradict or undermine each other.
Common estate-planning mistakes
Making a will and never reviewing it
Relationships, executors, assets and family needs change. Review your will periodically and after major life events.
Assuming the will controls every asset
Jointly owned property, pensions and insurance may pass outside the will.
Ignoring lifetime decision-making
A will does not help if you are alive but unable to manage your affairs. LPAs address a different and important need.
Choosing people without discussing the role
Executors, attorneys and trustees should understand the broad responsibilities and be willing to act.
Giving assets away without understanding the consequences
Lifetime gifts can affect financial security, tax, control of the asset, family relationships, benefits and assessments relating to care costs.
Using trusts without a clear reason
A trust should solve a genuine planning need. It may also create costs, administration and tax obligations.
Failing to coordinate professional advice
Will writing, tax, investments, pensions, property, business arrangements and care funding can overlap. Advice from one area should be checked against the wider plan.
When should you review your estate plan?
A review every three to five years is a useful general habit, but you should review sooner after a significant change such as:
- marriage or civil partnership;
- separation, divorce or dissolution;
- a birth, adoption or death in the family;
- retirement;
- a house move or change in property ownership;
- receiving an inheritance;
- starting, buying or selling a business;
- a major change in health;
- an executor, attorney or trustee becoming unsuitable;
- a beneficiary’s circumstances changing;
- moving abroad or acquiring overseas assets; or
- a significant change in tax or succession rules.
Read our guide explaining why retirement is a natural time to review your will.
A practical estate-planning checklist
- List your main assets, liabilities, policies and pensions.
- Check how your property and joint accounts are owned.
- Review or make a valid will.
- Choose suitable executors and replacements.
- Consider both types of Lasting Power of Attorney.
- Check pension, insurance and death-benefit nominations.
- Consider whether any beneficiary requires additional support.
- Review relevant tax and lifetime-gifting issues with qualified advisers.
- Consider future care needs and retain adequate financial security.
- Record important digital and practical information securely.
- Tell trusted people where key documents are stored.
- Set a date for the next review.
Estate planning in Poole, Bournemouth and Christchurch
Brooks Wills helps individuals and families across Poole, Bournemouth, Christchurch, wider Dorset and West Hampshire understand how wills, Lasting Powers of Attorney and later-life arrangements fit together.
Our approach is calm, practical and explained in plain English. We help you identify what is already in place, where there may be gaps and what the next sensible step may be.
Learn more about our Estate Planning Services.
Brooks Wills is a member of the Institute of Professional Willwriters and the Society of Will Writers.
Call, message or book a consultation to discuss your estate-planning arrangements.
Simplifying legacies, securing tomorrow.
This article provides general information for England and Wales. It is not legal, tax, financial or care-funding advice. The appropriate arrangements and outcomes depend on individual circumstances.
Frequently asked questions
What is the main purpose of estate planning?
Its purpose is to organise how your affairs should be managed during your lifetime and dealt with after your death. It can clarify who may make decisions, who should inherit and how important documents and assets fit together.
Is estate planning the same as making a will?
No. A will is an important part of estate planning, but a wider plan may also include LPAs, property ownership, nominations, trusts, tax considerations, later-life arrangements and practical records.
Do I need estate planning if I do not pay Inheritance Tax?
Possibly. Estate planning is not only about tax. It can help with decision-making authority, intestacy, executor appointments, family provision, property ownership and later-life planning.
Can estate planning protect my home from care fees?
No arrangement can guarantee that a home or other assets will be protected from care charges. Planning for later-life care costs depends on individual circumstances, and deliberate deprivation rules may apply where assets are given away or restructured to reduce charges.
How often should an estate plan be reviewed?
Reviewing every three to five years is a useful general approach. Review sooner after major changes involving relationships, family, health, property, finances, business interests or the people appointed to act.
Who should be involved in estate planning?
That depends on the circumstances. A will writer may work alongside suitably qualified legal, tax, financial, accounting, pension, property or care specialists where those areas require individual advice.
