Top considerations for estate planning

Charles Crossley Client Services Director at Equiom addresses the important topic of making a will and future planning for your estate.

It is vitally important that you don’t leave estate planning until it is too late. Too often we put off thinking about our wills just because it’s difficult to contemplate the twists and turns of family relationships and the effect that wealth might have on them. But by dodging the issue, you are surrendering control of how your assets will ultimately devolve to the laws of intestacy in the absence of a valid will. For this reason, I recommend these top considerations as a place to start:

1. Making a will

According to research, more than half of the UK adult population do not have a will.  However, careful planning and a little bit of forethought can cater for most eventualities, and provide the peace of mind that your hard-earned wealth will be distributed according to your wishes. By seeking professional advice you can avoid the pitfalls that are often associated with a ‘do it yourself’ approach. Self-drafted wills can be fraught with difficulty and create cost and delay to resolve after your death. They may also give rise to unintended outcomes. 

A will is fundamental to estate planning as, if suitably drafted, it sets out the parameters for the allocation of your assets. The process may also prompt other helpful measures such as the creation of powers of attorney or living wills, which ensure that your affairs and your views on medical treatment are dealt with as you would wish, even in the event that you lose capacity.  

We are very happy to liaise with your chosen advocate in respect of the preparation of your will.

2. Keeping your will up to date

Bear in mind that life events (marriage, divorce, loss of loved ones) are all likely to impact on a pre-existing will and may even render it void.  Consider provisions in your will for minor children, and whether these are still appropriate once they reach adulthood.  Have there been any changes in relationships which require inclusion or exclusion from your current will? 

It is advisable to review your will every few years, just to provide peace of mind that it continues to achieve the objectives you desire. Additionally, make sure your loved ones or advisors know where to find your will, and that they are working from the latest version. 

3. Making sure your will is tax efficient

Estate planning would certainly not be complete without considering the effects of taxation on the estate.  Consideration needs to be given to assets held during lifetime to ensure exposure to, for example, UK inheritance tax, is managed appropriately. In addition, the tax status of any beneficiaries of the estate should be thought about as this may impact on any proposed planning, which in turn may reduce their own tax burden. Charitable giving is also worth considering, as this may be structured in such a way to ameliorate the overall tax burden on the estate. Other considerations such as gifts made in lifetime and timely advice before moving to a new jurisdiction, for instance to be nearer loved ones, should also be considered. Our colleagues in Equiom Tax Services Limited (ETSL) are happy to review and advise of any potential liabilities, and how your affairs may be structured to maximise efficiency.

4. Understanding how your estate devolves 

Your circumstances may be simple, but equally you may have complex family arrangements; second marriages or partners who would not necessarily benefit under intestacy laws.  It is important to make sure that your will caters for these in exactly the manner in which you intend, as well as building flexibility into the arrangements for unforeseen events. 

5. Choosing an executor

When considering your will, the choice of executor(s) requires careful thought. The executor is the person who ensures the provisions in your will are actioned and liaises with the legatees after your death. Often family members, usually a spouse or child, are appointed as executors. This should be reviewed from time to time.  For example, does the nominated individual still wish to act? Do they have capacity and will they cope with the responsibility and follow the testator’s intentions? The executor will be required to secure the assets of the estate and then work through the steps required to the point of distribution. These might include obtaining the death certificate, assisting with funeral arrangements as necessary, securing probate, carrying out the specific wishes of the testator in terms of specific legacies, arranging for property to be cleared and sold, and dealing with tax affairs both pre and post death. 

These responsibilities can often be a strain on family members particularly at such a difficult time. That is why we usually suggest an experienced corporate executor is appointed, perhaps alongside the family member, which also addresses any issues of succession.  A professional executor can handle matters impartially and take away the worry and responsibility placed on loved ones at what is likely to be a very difficult time for family and friends. 

Equiom (Isle of Man) Limited can act as an executor in those circumstances and together with its sister company, ETSL can deal with all the issues necessary to administer an estate. 

To discuss your estate planning needs in more detail, contact Charles Crossley.

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The article cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Equiom to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.