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    Estate Planning and IHT guide

    Discover how Wills, Trusts and Powers of Attorney can help you control the distribution of your assets

    Why is estate planning important?

    An estate plan lets you maintain control of your assets and clearly sets out your wishes when the time comes that you are no longer able to look after them. Personal estate planning is important because it allows you to:

    Benefits of estate planning

    By arranging your estate planning ahead of time, you can set out your wishes and ensure your Executor has clear instructions to follow.

    • You decide on the choice of beneficiaries If you do not set out in a Will whom you wish to benefit from your estate, then the State will do it for you under intestacy rules in respect of any assets that you don’t own jointly as joint tenants. The results are not always what you would expect and can create unnecessary tax liabilities.
    • You decide what goes to whom You might want to leave a particular item to a particular person. Without estate planning, those wishes may not become reality.
    • You decide the structure Leave it to the State to distribute your wealth and normally anyone aged 18 or over will receive their inheritance outright. In some families, that will not be an issue, but in others placing some constraints on how an inheritance is handled could be essential.

    With estate planning in place, you will have addressed these important issues rather than leaving them on permanent hold. However, like all other aspects of financial planning, your estate planning will need regular review.

    How to plan your estate

    Your estate planning will need to take into account your assets, but also your unique circumstances – if you have a young family or own your own business for example. Our estate planning guide is not financial advice and cannot take all scenarios into account. Talking about your later life can also be emotional – which is not always conducive to smart decision-making. This is why we would recommend speaking to a Wren Sterling financial adviser who can be unbiased throughout this process, explain any regulatory changes, and help you make informed, confident financial decisions.

    Estate planning may be easier than you think. Get started today with our six point plan to peace of mind. Read more in our article 6 steps to your Estate planning

    What documents do you need when planning your estate?

    Will

    You Will is the only way to avoid Intestacy rules that would distribute your estate according to the State rather than your wishes (apart from any assets owned jointly as joint tenants, which pass automatically to the surviving owner). When writing your Will, we would recommending learning about the Probate process and your Executor’s duties to ensure you leave adequate instructions.

     

    Trust

    Trusts can be used to pass assets down to future generations, and even protect assets against divorce, bankruptcy or manage assets on behalf of vulnerable beneficiaries.

     

    Power of Attorney

    Power of Attorney does not overlap with your Will, as this concerns what you would like to happen during your lifetime if you lose capacity to handle your affairs. Consider who you would want to support you with different needs as there are different types that cover your finances and property or your health and welfare.

    How do I start the estate planning process?

    It’s never too early to start making plans to safeguard your legacy. With a comprehensive estate plan you can make your wishes known and make decisions that can support your beneficiaries? when you’re gone. The first step is to make a list of all your assets and liabilities. Because individual estates can vary, this will be different for everyone. From here, you can calculate your Inheritance tax liability, and how you would like to distribute your assets. When thinking about your estate planning, we would recommend talking to your Financial Adviser who can give you impartial advice on how to structure your estate.

    What assets can be included in an estate plan?

    Your estate plan needs to include anything you own that is of monetary value. This includes:

    • Your main residence and any additional properties or land.
    • Money in bank accounts, ISAs and stocks and shares
    • Household items
    • Foreign assets
    • Money that you’re owed (for example, salary or refunds from household bills)
    • Vehicles (including cars, boats and caravans)
    • Payments triggered by death, such as a Life Insurance policy or a Lump Sum Death Benefit from a pension
    • “Digital” assets such as family photos, social media profiles and music collections, which can be treated as treasured possessions
    • From 2027 any unused pension funds will also be included in inheritance tax calculations.

     

    Ask us about your estate planning

    Get estate planning advice from Wren Sterling Ask us about your estate planning

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    Estate planning FAQs:

    • Can I do my own estate planning?

      Can I do my own estate planning?

      It is possible to do your own estate planning. However, this process can be very emotional and – as with all emotional decisions around your money – we would recommend talking to a Financial Adviser to help you make decisions about your legacy. They can also help you calculate your inheritance tax liability, and how you might distribute your assets. Wren Sterling has various professional partners we can recommend to assist you if you have more complex needs and require legal advice to set up your Will, Trusts or Powers of Attorney.

    • How do I start the estate planning process?

      How do I start the estate planning process?

      First of all, you need to work through basic steps such as assessing your net worth and adding up all your assets. Then you will need to consider where you want everything to go after your death, and put arrangements in place – such as writing a Will and arranging a Power of Attorney.

      Not sure where to begin? Download our Estate Planning Guide

    • What is a Power of Attorney?

      What is a Power of Attorney?

      A Power of Attorney is a legal document that allows someone to act for you if you’re not able to make decisions about your finances or wellbeing – or want help with making those decisions.

      Powers of Attorney are now created using two types of ‘Lasting Power of Attorney’ (LPA), which separates which areas an Attorney can assist with:

      • Your property and finances – paying bills, making mortgage payments, investment decisions, and dealing with your taxes.
      • Your health and welfare – your medical care, where you should live, what you should eat, who you have contact with, and what kind of activities you should take part in.

    • What is intestacy?

      What is intestacy?

      Intestacy rules are the default laws around inheritance in the case that you die without a Will. These rules are slightly different in England and Wales, Scotland, and Northern Ireland.

      Fortunately, Wren Sterling have offices throughout the UK – so you can discuss your estate planning with a local financial adviser who understands your specific needs.

    • What is a trust?

      What is a trust?

      Typical use of trusts is for the protection of money, investments, property and land. They are legal arrangements and can be used to hold assets on behalf of a beneficiary, either for a set period of time, or to be managed on their behalf. Depending on how a trust is set up, they can be used to reduce potential IHT liability on death.

      It is best to receive professional advice prior to creating a trust to make sure you’re aware of your responsibilities. Wren Sterling works with a number of specialists who can ensure the right legal and taxation advice is available.

    • What is a Will?

      What is a Will?

      Your Will is a legal document that sets out how you want your assets to be distributed, any funeral arrangements, and who you would like to carry out your wishes.

      A Will can be as simple as a few lines or it can cover many pages. DIY Wills are possible and many people use a simple will form or online will-writing services (such as those Wren Sterling is partnered with).

    • What is probate?

      What is probate?

      Probate is the process your Executor will need to go through to distribute your assets. There are several steps involved, including applying for permission to do so with a ‘grant of probate’, cataloguing and organising assets, paying Inheritance tax, and distributing the remaining assets. We have a Probate guide to help you understand the responsibilities required of an Executor – so that you can be more informed when choosing who will carry out your wishes.

    This information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from taxation, are subject to change.

    The Financial Conduct Authority does not regulate inheritance tax planning, trust advice and will writing.