Estate Planning

What is estate planning?

Estate planning is the work of organising your affairs so that, when you die or if you ever lose the capacity to manage things yourself, your wishes are carried out smoothly and the people you care about are protected. Your "estate" is simply everything you own — your home, savings, investments, pensions (in most cases), personal belongings and any business interests — less anything you owe. Estate planning decides where all of that goes, who is in charge of arranging it, and how to keep tax, cost and conflict to a minimum.

It is not only for the wealthy or the elderly. If you own a home, have children, run a business, are part of a blended family, or simply want to spare your loved ones stress and uncertainty, you have an estate worth planning. Done well, estate planning replaces the rigid default rules of the law with your own clear instructions. Our beginner's guide to estate planning is the ideal starting point if this is all new to you.

Why estate planning matters

If you die without a valid will, the intestacy rules decide who inherits — and they rarely match what most people actually want. Under intestacy in England and Wales, a surviving spouse or civil partner receives the first £322,000 plus personal possessions where there are children, with the rest split between spouse and children. Unmarried partners, stepchildren and close friends receive nothing automatically, however long the relationship. If you live with a partner but are not married, read does my partner have any rights if I die — the answer surprises most couples.

Planning also matters while you are alive. A Lasting Power of Attorney (LPA) lets you appoint people you trust to make decisions on your behalf if illness or injury means you cannot. There are two types — Property & Financial Affairs, and Health & Welfare — and each is registered with the Office of the Public Guardian for a fee of £92. Without an LPA in place, your family may have to apply to the Court of Protection, which is slower, costlier and more stressful.

The building blocks of a plan

Your will

A will is the foundation. It names your beneficiaries, appoints executors to administer your estate, and — crucially for parents — appoints guardians for children under 18. Young families in particular should not delay: a will is the only place you can legally name who would raise your children, and it answers the difficult question of what happens if both parents die at the same time.

Lasting Powers of Attorney

Two LPAs — one for finances, one for health and welfare — protect you during your lifetime. Most planners recommend putting these in place alongside your will rather than waiting.

Trusts

Trusts let you control how and when assets pass on — useful for protecting an inheritance for children, ringfencing assets in a second marriage, or providing for a vulnerable beneficiary. Some people ask whether they can put their house in trust for their children; this can help in the right circumstances but carries real pitfalls, so take advice first.

Pensions and beneficiary nominations

Pensions usually sit outside your will and pass via a nomination form to your scheme. Keeping these up to date is one of the simplest, highest-impact steps you can take — see what happens to my pension when I die. Note that from April 2027, most unused pension funds are expected to fall within the inheritance tax net under announced government policy.

Your digital legacy

Online accounts, photos, cryptocurrency and subscriptions all need consideration. Our guide to your digital legacy explains how to make sure these are not lost or left in limbo.

Inheritance tax in brief

Inheritance tax (IHT) is charged at 40% on the value of an estate above the available allowances (reduced to 36% if you leave at least 10% of your estate to charity). Everyone has a nil-rate band of £325,000, frozen until April 2030. On top of that, a residence nil-rate band of up to £175,000 applies when a main home passes to direct descendants, though it tapers away for estates over £2 million. Married couples and civil partners can combine their allowances, so up to £1 million can pass free of IHT in the right circumstances.

Lifetime giving can also help: under the 7-year rule, most gifts fall outside your estate if you survive seven years, with taper relief on gifts made three to seven years before death. There are legitimate, well-established ways to reduce an IHT bill — our guide on how to avoid inheritance tax legally walks through them, and leaving money directly to grandchildren is a common question for those thinking about the next generation.

Planning for care costs

One of the biggest worries people raise is the family home and the cost of care. Many ask what happens to my house if I go into a care home and whether they can stop their house being sold to pay for care. These are nuanced areas where some "schemes" do more harm than good, so honest, qualified advice matters.

Families that need extra care

Second marriages and step-relationships add complexity. If you want to provide for a new partner while protecting children from a previous relationship, our guide for blended families is essential reading, alongside whether stepchildren have a right to inherit. Separated and divorcing couples often ask can my ex get my house if I die — and the answer depends heavily on whether your will and ownership arrangements have been updated.

The estate planning process

• Take stock — list your assets, debts, pensions and policies, and note how each is owned.
• Clarify your wishes — who should inherit, who should be executor or attorney, and who should be guardian for any children.
• Get advice and draft documents — a will, LPAs and any trusts, prepared so they work together.
• Review regularly — after marriage, divorce, a birth, a death, a house move or a major change in the value of your estate.

Common mistakes to avoid

• Having no will, or relying on a decades-old one that no longer reflects your family.
• Assuming an unmarried partner or stepchildren will automatically inherit — they will not.
• Forgetting LPAs, leaving your family unable to act if you lose capacity.
• Letting pension and life policy nominations fall out of date.
• Using DIY trust or "asset protection" schemes without understanding the consequences.

What it costs and how Ask an Estate Planner helps

Costs vary by complexity, but the most common frustration is opaque pricing. Ask an Estate Planner is a free, independent comparison service. We help you compare clear, fixed-price quotes from BCEP-trained estate planners who cover your area, across wills, trusts, LPAs and probate or estate administration. You see what you will pay before you commit, with no obligation and no hidden fees — so you can choose the right professional with confidence.