Introduction to estate planning and your financial options

You work hard to build your wealth, and you want to ensure your loved ones benefit from it when you’re no longer here. But without a clear plan, the law of Intestacy dictates who inherits your estate ‒ often leading to unintended outcomes.

Families can face delays, unnecessary tax burdens and even disputes that could have been avoided with proper preparation. That’s where estate planning comes in, helping pass on more of your wealth in the ways you wish and making sure the right people can make decisions on your behalf.

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By taking control in some of the following ways, you remove uncertainty and put protections in place for the future.

Making a valid will

A will ensures your estate is distributed according to your wishes. Without one, your assets may not pass to the people you expect, and your loved ones may face lengthy legal hurdles.

To create a legally binding document, you need to put your instructions in writing, sign it in the presence of two witnesses and have them sign it as well. They must be over 18 and cannot be beneficiaries.

Any mistakes in the wording or execution could make the document invalid. A solicitor can help you draft a clear, legally sound will that accurately reflects your intentions.

Exploring trusts

Instead of handing over a lump sum outright, trusts allow you to set conditions on when and how people receive their inheritance ‒ which is particularly useful for minors or vulnerable individuals. You appoint trustees to manage the assets on behalf of the beneficiaries.

There are different types depending on your objectives. Discretionary trusts allow flexibility in how funds are allocated, for example, while life interest trusts provide ongoing income to a chosen individual.

Minimising Inheritance Tax (IHT)

If your estate exceeds the IHT threshold, 40% of anything above it goes to HMRC ‒ but there are ways to reduce this liability.

Gifting during your lifetime is one of the most effective options. You can give away up to £3,000 each year without it being counted towards IHT, and larger gifts may become tax-free if you survive for seven years after making them. You can also make contributions to family weddings and charities.

Certain types of trusts also remove assets from your estate while keeping you in control. Plus, if you own property, passing it directly to descendants will reduce your tax burden. Proper Estate and IHT planning can help bring all of these strategies together in a structured way. It can ensure your wealth is passed on efficiently, in line with your long-term wishes.

Assigning lasting powers of attorney

If you ever lose the ability to make decisions due to illness or injury, someone needs legal authority to act on your behalf. A lasting power of attorney (LPA) lets you appoint trusted individuals to make decisions for you.

There are two types: one for property and financial affairs and another for health and welfare. You can choose different people for each or the same person for both. By setting this up while you’re still capable, you ensure your interests are protected and those you trust have the authority to manage your affairs without extra legal obstacles.

Accessing inheritance early

Inheritance often takes months or even years to be released, particularly if probate is complex. This delay can leave beneficiaries struggling financially, especially if they are relying on the deceased’s income or facing urgent costs.

An inheritance loan provides an alternative, allowing people to access a portion of their entitlement immediately, with repayment made from the final estate distribution. These loans are secured against expected inheritance rather than personal assets, meaning there are no credit checks or monthly repayments.

Are your affairs in order? By putting structures such as these in place today, you prevent complications and provide security for those who matter most.

David Prior

David Prior is the editor of Today News, responsible for the overall editorial strategy. He is an NCTJ-qualified journalist with over 20 years’ experience, and is also editor of the award-winning hyperlocal news title Altrincham Today. His LinkedIn profile is here.