It would be fair to assume that most people are familiar with the purpose of making a Will, but did you know that Will writing is just one element of estate planning? Although an extremely important component, estate planning goes much further than Will writing, to determine your wishes about wider aspects of your life including your finances, health, care and more.
What is estate planning?
Estate planning is the writing of a Will, and a thorough process that can include several documents to protect you, your property, and your family in the event of your death, or loss of capacity.
Estate planning includes:
Making a Will - a legal document that sets out instructions for those who will inherit your estate upon your death. It can include funeral wishes, how you’d like your personal possession distributed and many other wishes such as who you would like to raise your children, if you have them. A Will is legally binding, but it must be prepared properly.
Appointing Power of Attorney - in the event you were to lose mental capacity, you can grant another person the authority to make important decisions regarding all aspects of your finances, property, and health.
Business Succession Planning - if you own a business, within a family or otherwise, then you will need to plan who you wish to leave your business assets to, or who will take over the business when you pass away. Considerations such as profit allocation, and partnership agreements all form part of estate planning.
Trusts - these can be used to manage money or other assets on behalf of your beneficiaries. Numerous types of Trusts exist, which can provide an alternative to direct inheritance from your estate.
Why should I consider estate planning?
A Will in place with careful estate planning can help minimise the impact of inheritance tax on your family when you die. ‘DIY’ Wills purchased online or from stationary stores might seem like great value for money, but they don’t offer complete protection. (NB. Even Wills written by a regulated Will writer, planner or even solicitor can be challenged and contested in a court of law. Therefore, it’s prudent to make sure you check the credentials of the firm you use to ensure it is regulated). . For instance, they do not:
Protect your estate and possessions from being given away - to any new spouse or partner - if your spouse or partner were to remarry on or after your death.
Protect your children’s inheritance from any new stepmother or stepfather inheriting your estate and possessions on either your death or ex-spouses death.
Protect your grandchildren’s inheritance from your children’s death to ensure your grandchildren inherit and not the spouse of your children.
Protect a child with addictive issues, who inherits your wealth and is likely to feed an addiction.
Protect a child with financial problems and creditors (, who inherits your wealth) to ensure they benefit for their future
What are the differences between Wills and Estate Planning?
If your assets are uncomplicated and you are simply looking to clarify who should inherit your estate upon your death, then Will writing can be relatively straightforward. A Will allows you to set out who is to inherit your estate, who will look after your children (if you have them), who should run your business and who should inherit your property.
By taking time to talk through your estate with a professional estate planner before you make a Will, you can give yourself complete peace of mind that every scenario has been considered and you have done everything you can to protect your loved ones from any surprises or unexpected bills in the future.
Estate Planning should be a continual process throughout all of our lives.
Your Will should be reviewed periodically to ensure that your assets and wishes are safe guarded. With reliable, honest advice you can make the right decisions to ensure your estate is bequeathed to your preferred beneficiaries.
If you need help with your Will, we can introduce you to our specialist advisor who will be more than happy to talk through the most suitable option for you.
Wills and Estate Planning are not regulated by the Financial Conduct Authority.