The Estate Planning process

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The Estate Planning process

Estate Planning is a long process consisting of many steps for it to be comprehensive and “bullet-proof”. What should such a process look like and when Estate Planning should be performed? Estate Planning mainly focuses on deciding how your estate, such as property, cars, investments, or personal items should be allocated after you die. However, a comprehensive Estate Plan is much more than just this. It establishes what happens to your estate, yourself and the ones you love and care about in other situations, too, such as:

  • In the event you become incapacitaded you can appoint a trusted person to make decisions for you in areas of your health, finances and business;
  • You leave small children behind and you can plan ahead of who should become a guardian for your children in case you are no longer able to, or you pass away;
  • You marry or divorce and need to update your Will;
  • Your estate may accumulate a high tax burden for your beneficiaries, therefore you should include Inheritance Tax Planning strategy in your estate planning.

The Estate Planning Documents

Typical Estate Planning documents that are advisable to people with UK assets or living in the UK are as follows: 

  • Last Will and Testament 
  • Power of Attorney: Health & Wellbeing, Financial, Business
  • Guardianship Nomination 
  • Trust for IHT Purposes 

Estate planning is one of the most important things you can do to protect yourself and your family. Typically, setting up and understanding the purpose of these documents can ensure your wishes are followed after death or in an event of incapacitation. 

Estate Planning Process: When to Make a Will

A good practice is to set up a Will as soon as you become a legal adult or reach the so-called “estate planning triggers”, such as marriage, having a child, divorce or buying a new home or investment property. 

There might be dire consequences of not having a valid Will; the main one being that your wishes as to how to dispose of your estate might be not granted, and instead, be a subject of local testacy laws, which might create confusion among your intended beneficiaries. Your family might be left in the middle of the grieving process occupied with decisions and tasks that they may not have considered or were prepared for.  

A good practice is to review your Will every 5 years to ensure that it is updated and that it follows the latest estate planning laws. Soteria Trusts, together with our in-house specialist Will Writing company, Certainty Estate Planning aims to make this process as seamless as possible by offering a Free Will Review. It costs you nothing to have your current Will reviewed by a professional Will Writer. Moreover, if you happen to already own more than £160,000 in assets — it might be time to consider going one step further and create a Trust. 

Estate Planning Process: When to Nominate a Guardian?

The moment you start planning to have a child is the right time to think about who you should consider as their legal guardian in case you and your partner die, or are otherwise unable to care for them. Once you’ve decided you should put your wishes in writing. You can add a Guardianship clause in your Will, and consider an additional Guardianship Deed (depending on the jurisdiction you reside in). 

Estate Planning Process: When to Appoint a Power of Attorney

A Lasting Powers of Attorney (LPA) is a legal document that enables you to appoint a third party or a person of your choice, to make important decisions on your behalf, in a situation where you are incapacitated or are unable to do so yourself. 

The LPA is a powerful and important document, as the Power of Attorney will also gain access to your bank account, and will be able to manage your finances, health decisions and even business on your behalf. 

The best moment to write Power of Attorney is now. Since capacity can be lost every day through accidents, stroke, or other serious health conditions, age should not be a determining factor. Additionally, considering dementia, which is usually associated with people aged over 65 years, more people are experiencing dementia symptoms during their 40s. 

Crucially, this appointment can only be made when you are mentally fit and well. Leaving it too late can mean that trusted relatives and friends are powerless to make decisions for you, and they would have to first spend time and money in courts to get this granted. 

Estate Planning Process: When to Create a Trust for IHT Purposes

Trusts are set up for a variety of reasons, but usually to safeguard a family’s estate from taxes. 

The moment your estate’s value increases, for example, because of the rising house prices in the United Kingdom, or other successful investments, it may be your cue to look into setting up a Trust

Trusts give you control over the distribution of your assets, can help you avoid the lengthy probate process and to minimise Inheritance Tax as your assets pass on to the beneficiaries of your choice. Soteria Trusts Consultant can walk you through the various types of trusts available to ensure you have a comprehensive Estate Plan in place. 

Estate Planning Process: When to Update Your Estate Plan

Life can quickly change, and therefore it is crucial that you update your estate plan accordingly to these changes. Anytime you need to update your Will (which we recommend every 5 years or following a change in circumstances or a life event taking place) also review your Lasting Power of Attorney and Guardianship clause (if applicable). If your estate’s value increases over the IHT thresholds, you should update your Estate Plan to open a Trust to preserve your hard-earned wealth in your family.  

If you have any additional questions, please contact us directly in the form below. Our consultants will be happy to assist you in your estate planning process.


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