Estate planning is one of the most important things you can do for your family — yet most people put it off, unsure where to start or assuming it is only relevant for the very wealthy. In reality, anyone who owns property, has savings, runs a business, or has children or dependants has a clear interest in putting proper plans in place.
This guide covers everything you need to know: from the core documents every adult should consider, to inheritance tax planning, trusts, lifetime giving, and what to do at each stage of life. Whether you are just starting out or reviewing an existing plan, this will help you understand your options and take the right steps.
In this guide
- →What estate planning means in practice
- →Why estate planning is for everyone
- →The building blocks of an estate plan
- →Understanding inheritance tax
- →Inheritance tax allowances and exemptions
- →How trusts support estate planning
- →Estate planning for blended families
- →Lifetime giving and gifts
- →Lasting Powers of Attorney
- →Estate planning at different life stages
- →Common estate planning pitfalls
- →Estate planning review checklist
- →When professional guidance helps
- →Frequently asked questions
What estate planning means in practice
Estate planning is the process of organising your affairs so that your wishes are known and can be carried out — both during your lifetime and after your death. Your estate includes everything you own: your home, savings, investments, business interests, possessions, and any other assets. It also includes your debts and liabilities.
At its core, good estate planning answers three questions: What should happen to your assets when you die? Who should look after your affairs if you cannot manage them yourself? And who should make decisions about your care if you lose the capacity to decide?
Without a plan, the law decides these things for you — and the law's default position is rarely the most effective or the most reflective of your wishes. Estate planning puts you back in control.
Why estate planning is for everyone
The phrase "estate planning" can sound like something that only applies to wealthy families or large properties. That is a misconception. Consider what happens without proper planning in even straightforward situations:
- An unmarried partner receives nothing under the intestacy rules, regardless of how long you have been together
- Stepchildren have no automatic inheritance rights — even if you raised them
- If you have no will, the court appoints an administrator and follows a fixed pecking order that may not match your wishes
- Without a Lasting Power of Attorney, your family cannot access your bank accounts if you lose capacity — even to pay bills
- Jointly owned assets may pass automatically to a co-owner regardless of what your will says
- A spouse who remarries after your death may leave everything to their new family
None of these situations requires wealth to create problems. Estate planning is about clarity, certainty and care — not just about money.
The building blocks of an estate plan
A comprehensive estate plan typically combines several documents, each serving a different purpose. Most people need at least the first two.
Your will
A will is a legal document that sets out how your estate should be distributed after your death. It lets you name beneficiaries, appoint executors to carry out your wishes, nominate guardians for minor children, and create trusts where needed.
Without a valid will, the rules of intestacy apply. These rules follow a fixed order based on family relationships and often produce outcomes that are fair in the eyes of the law but wrong for your particular situation. Unmarried partners, stepchildren, close friends and charities receive nothing under intestacy.
You can learn more about the will writing process on our wills service page, including what to expect at each stage.
Lasting Powers of Attorney
Lasting Powers of Attorney (LPAs) allow you to appoint trusted people to make decisions on your behalf if you lose the mental capacity to make them yourself. Unlike a will, LPAs are designed to protect you during your lifetime.
There are two types: a Property and Financial Affairs LPA (covering your money, property and investments) and a Health and Welfare LPA (covering decisions about your care, medical treatment and daily routine). Both must be registered with the Office of the Public Guardian before they can be used.
If you do not have LPAs in place and lose capacity, your family would need to apply to the Court of Protection to gain authority to manage your affairs. This process can take many months, costs several thousand pounds, and does not always give the outcome you or your family would have chosen.
Trusts
Trusts are legal arrangements where assets are held by trustees for the benefit of named beneficiaries. They are a flexible tool with many uses: protecting assets for children, providing for a surviving spouse while preserving inheritance for children, managing assets for someone who cannot look after their own finances, or holding business interests.
Common trusts used in estate planning include protective property trusts, discretionary trusts, life interest trusts, and vulnerable person trusts. We cover these in detail in our trusts service section.
Understanding inheritance tax
Inheritance tax (IHT) is charged on the value of a person's estate above a threshold when they die. The standard rate is 40%, and it is levied on the portion of the estate that exceeds the available allowances. It is a significant consideration for many families, particularly those who own property in areas like Kent where house prices have risen substantially.
The basic position is straightforward: if your estate — including property, savings, investments and other assets — exceeds your available allowances, the excess is taxed at 40%. The tax is usually payable within six months of death, before probate is granted, which can create cash flow difficulties for estates where most wealth is tied up in property.
Understanding where you stand with inheritance tax is one of the first steps in planning. Many people are surprised to discover they have a potential IHT liability they were unaware of — or equally, that they are well within the available allowances.
Inheritance tax allowances and exemptions
The UK inheritance tax system includes several allowances and exemptions that can significantly reduce or eliminate a liability.
The nil-rate band
Every person has a nil-rate band of £325,000. This means the first £325,000 of your estate passes free of inheritance tax. If you are married or in a civil partnership, any unused nil-rate band can be transferred to your surviving spouse, potentially doubling the allowance to £650,000.
The residence nil-rate band
An additional allowance — the residence nil-rate band (RNRB) — is available when you leave your main home to direct descendants such as children or grandchildren. This allowance is currently worth up to £175,000 per person and can also be transferred between spouses. For a married couple leaving their home to their children, combined allowances could reach £1 million before any inheritance tax is due.
The RNRB is tapered for estates valued above £2 million, so larger estates may see this allowance reduced.
Spouse and civil partner exemption
Assets left to a spouse or civil partner who is domiciled in the UK are generally exempt from inheritance tax entirely. This means many couples have no IHT liability when the first spouse dies. However, this simply defers the tax to the second death, and planning should take account of both estates together.
Charitable giving
Gifts to registered charities are exempt from inheritance tax. Additionally, if you leave at least 10% of your net estate to charity, the IHT rate on the rest of the taxable estate is reduced from 40% to 36%.
Business Property Relief and Agricultural Relief
Certain business and agricultural assets may qualify for relief from inheritance tax. Business Property Relief (BPR) can reduce the taxable value of qualifying business assets by up to 100%. Agricultural Relief operates similarly for qualifying farmland and farm buildings. The rules are complex and subject to change, so professional advice is important if you own a business or agricultural land.
How trusts support estate planning
Trusts play an important role in estate planning beyond tax. They allow you to exercise ongoing control over how assets are managed and distributed, protect assets from particular risks, and provide for beneficiaries who may not be able to manage money themselves.
Protective property trusts
These protect a share of the family home for children while allowing the surviving partner to continue living there. They are particularly useful for blended families or where there are concerns about remarriage after bereavement.
Discretionary trusts
Trustees have the flexibility to decide how and when to distribute assets to a class of beneficiaries. Useful for circumstances that cannot be predicted, such as caring for a beneficiary who may need ongoing support or has complex needs.
Life interest trusts
A beneficiary receives income or use from the trust assets during their lifetime, with the underlying capital preserved for others (typically children) on their death. Commonly used in second marriages to balance the needs of a surviving spouse with those of children.
Vulnerable person trusts
These provide for beneficiaries who cannot manage their own finances — for example, those with disabilities, mental health conditions, or addiction issues — while keeping assets protected and professionally managed.
Trusts are not just for large estates. Many middle-income families in Kent benefit from straightforward trust arrangements included in their wills. Our trust planning service explains the options in more detail.
Estate planning for blended families
Blended families — where one or both partners have children from previous relationships — face particular challenges in estate planning. Without careful planning, assets can pass in ways that disadvantage one set of children entirely.
The most common risk is sometimes called "sideways disinheritance". This is where the first partner to die leaves everything to the surviving partner, who then remarries and leaves everything to their new family. The children of the first partner receive nothing.
Trusts are the most effective way to address this. A life interest trust or protective property trust can ensure the surviving partner is provided for during their lifetime while protecting assets for the children of the first partner. The structure requires careful drafting to balance the needs of all parties.
Property ownership also needs review. Many couples in second marriages own property as joint tenants, which means the property automatically passes to the survivor regardless of any will. Changing to tenants in common — where each person owns a defined share — is often an important first step for blended families.
Lifetime giving and gifts
One of the most effective ways to reduce a potential inheritance tax liability is to make gifts during your lifetime. The rules governing lifetime gifts are important to understand before giving money away.
The seven-year rule
If you give away assets and survive for seven years, those gifts are generally outside your estate for inheritance tax purposes. Gifts made in the seven years before death may still be subject to tax on a sliding scale — this is known as taper relief.
Annual exemption and small gifts
You can give away up to £3,000 each tax year free of inheritance tax (the annual exemption). You can also make small gifts of up to £250 to as many people as you like each year. These exemptions are available every year and can be used together to make regular gifts to children and grandchildren.
Regular gifts out of income
Gifts made regularly from surplus income — not capital — can also be exempt from inheritance tax, provided certain conditions are met. This can be a useful planning tool for those who have regular income they do not need for their own expenditure.
Wedding and marriage gifts
Gifts made in connection with a wedding can be exempt up to certain limits: £5,000 from a parent, £2,500 from a grandparent, and £1,000 from any other person.
Lasting Powers of Attorney in estate planning
Lasting Powers of Attorney are often treated as separate from estate planning, but they are a core component of a complete plan. A will covers what happens after death; an LPA covers what happens if you cannot manage your affairs during your lifetime.
The need for LPAs can arise suddenly — through accident, stroke, or the early stages of dementia — and without them, your family faces a difficult and expensive process to gain authority to help you. The Office of the Public Guardian currently estimates that over a million families will need to rely on deputyship arrangements because their relatives do not have LPAs in place.
Setting up LPAs while you are well and have full mental capacity is straightforward. Waiting until you need them may mean it is too late. You must have mental capacity to make an LPA — if that capacity is lost, the only alternative is Court of Protection proceedings.
Our LPA service page explains how the process works and what to expect.
Estate planning at different life stages
Estate planning needs change as life changes. Here is a brief guide to what typically matters most at each stage:
Young adults and first-time buyers
Making a will and LPAs when you first own property or have significant savings. Especially important for unmarried couples, since a partner has no automatic inheritance rights.
Families with young children
Appointing guardians, setting up trusts for children's inheritance, and ensuring life insurance is reflected in the estate plan. Both parents should have wills and LPAs.
Mid-life and growing assets
Reviewing whether existing wills still reflect current circumstances and wishes. Considering whether inheritance tax is becoming a concern. Reviewing property ownership between partners.
Later life and retirement
More detailed IHT planning, reviewing trusts and lifetime giving strategies. Ensuring LPAs are registered and accessible. Considering care costs and their potential impact on assets.
Second marriages and blended families
At any age, remarrying requires a fresh estate plan. Existing wills should be updated, property ownership reviewed, and trusts considered to protect all children involved.
Common estate planning pitfalls
Even those who do make estate plans can fall into traps that undermine their intentions.
- Not making a will or LPAs at all, assuming everything will work out
- Making a will but not keeping it updated as circumstances change
- Getting married without making a new will — marriage revokes an existing will in England and Wales
- Forgetting to consider jointly owned assets, pensions and life insurance policies
- Not discussing plans with family members, leading to confusion or disputes
- Appointing executors or attorneys without discussing it with them first
- Using DIY solutions for complex situations that really need professional input
- Focusing only on inheritance tax without considering other aspects of planning
- Owning property as joint tenants when tenants in common would better serve the family
- Not storing important documents safely or telling anyone where they are
Estate planning review checklist
Estate planning is not a one-time task. Use this checklist to identify areas that may need attention in your own plan:
- Do you have a valid, up-to-date will that reflects your current wishes?
- Have you set up both a Property and Financial Affairs LPA and a Health and Welfare LPA?
- If you are in a couple, does your partner also have a current will and LPAs?
- Do you know whether you own property as joint tenants or tenants in common?
- Have you reviewed your beneficiary nominations on pensions and life insurance?
- Do you have an estimate of your estate's potential inheritance tax position?
- If you have children, have you nominated guardians in your will?
- If you are in a blended family, does your plan reflect all family members fairly?
- Have you considered whether any trusts would be appropriate for your circumstances?
- When did you last review your will? If it has been more than five years, it is worth revisiting.
When professional guidance helps most
For many people, a straightforward will and two LPAs will be the starting point. But professional guidance becomes particularly valuable in a range of circumstances:
- You own property, particularly if it is above the IHT thresholds
- You have children from previous relationships or a blended family
- You want to include trusts in your estate plan
- You are concerned about inheritance tax and want to explore your options
- A beneficiary has special needs or is unable to manage their own finances
- You run a business that needs to be addressed in your plan
- You have assets in multiple countries
- You want to make lifetime gifts as part of a broader strategy
For residents of Kent, including Tonbridge, Tunbridge Wells, Sevenoaks and Maidstone, Legacy Lines provides professional estate planning services with the option of face-to-face consultations at our Tonbridge office. We offer a transparent pricing structure so you know what to expect before you begin.
Frequently asked questions
What is estate planning and who needs it?
Estate planning is the process of organising how your assets will be managed during your lifetime and distributed after your death. It is not just for the wealthy — anyone who owns property, has savings, or has dependants can benefit from putting proper plans in place.
Do I need an estate plan if I have a will?
A will is an important part of estate planning, but it only covers what happens after you die. A comprehensive estate plan also includes Lasting Powers of Attorney for if you lose capacity during your lifetime, and may include trusts or other arrangements depending on your circumstances.
How much inheritance tax will my estate pay?
Inheritance tax is charged at 40% on estates above the nil-rate band of £325,000. Additional allowances may apply, including the residence nil-rate band of up to £175,000 if you leave your home to direct descendants. Transfers between spouses and civil partners are usually exempt. Professional advice can help you understand your position and identify planning opportunities.
When should I start estate planning?
It is never too early. The basic documents — a will and LPAs — can be put in place at any age once you have assets or dependants. Estate planning needs typically become more complex as you accumulate assets, form families, and approach later life. Waiting until you feel you need them often means waiting too long.
What is the residence nil-rate band?
The residence nil-rate band is an additional inheritance tax allowance worth up to £175,000 per person when you leave your main home to direct descendants such as children or grandchildren. It is available alongside the standard nil-rate band, meaning couples may have a combined threshold of up to £1 million before inheritance tax applies.