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The basics of Estate Planning - What you need to know

Estate planning is the process of putting your affairs in order and preparing a plan of action to ensure your assets are transferred before and after your death. It involves making strategic decisions to ensure that your wishes are honoured, that your family members are provided for, and at a time when your family will be grieving, the transfer of your assets happens smoothly and according to the plan. By having a well-crafted estate plan in place, you can help avoid disagreements among beneficiaries and minimize inheritance tax and costly legal fees.

Make a list

A good placed to start is by taking an inventory of all of your assets, include your cash, property, investments and insurances. Also consider your personal items, particularly items of value such as expensive jewellery or artwork. List anything that belongs to you and your estate.

Putting a Will in place*

An essential building block of your estate plan is your Will. A Will dictates where you want your assets to go after you pass away, without a will in place, you have no say in where your legacy goes. Instead, the rules of intestacy will apply, setting out a hierarchy of inheritance. Meaning your hard-earned assets could end up transferring to someone you had no intention of providing for. A well written will helps to ensure your loved ones get their rightful inheritance.


What to include in your will:

·       who you want to benefit from your will

·       who should look after any children under 18

·       who is going to sort out your estate and carry out your wishes after your death (your executor)

·       what happens if the people you want to benefit die before you


But there is much more to estate planning than just making a will.

Power of Attorney*

Whilst a Will manages the transfer of your assets upon your death, Power of Attorney allows you to nominate someone you trust to make both health and financial decisions on your behalf if you become incapacitated. This is equally as important as it can be enforced in the event of a sudden illness or a loss of mental capacity meaning important decisions can still be made whilst you are unable to make them yourself.


Inheritance Tax

Under current legislation each individual can have up to £325,000 worth of assets before inheritance tax is taken into consideration and if you own your own property that your descendants will inherit, then you also have an additional £175,000. A financial planner can help you assess if your estate would attract an inheritance tax and if so what steps you can take to ensure most, if not all, of your assets go to your loved ones upon your death.



One common strategy in estate planning, particularly if you have an above average amount of assets, involves the strategic “gifting of assets” during your lifetime to reduce your overall taxable estate. By taking advantage of annual gift tax allowances and educational exclusions, or even wedding gifts you can transfer your wealth directly to your beneficiaries without incurring gift taxes, thereby reducing your taxable estate.



Additionally, trusts play a pivotal role in estate planning as vehicles for managing your assets both during your lifetime and after your death. Trusts can be structured in ways that defer or minimize inheritance tax while providing for your beneficiaries. For instance, a Legacy Preservation Trust (LPT) is designed to take receipt of life insurance proceeds from the taxable estate, this offers a method of passing wealth straight to your beneficiaries free from inheritance tax. 


Review, revise and update

Naturally over your time, your circumstances will change, your family may expand, welcoming children or grandchildren, there may be a divorce, or a house move that was not in your original plan. There are constant legislation changes which may render parts of your plan unsuitable for your needs.

However, your life evolves it’s important to regularly revisit your estate plan,  especially with major life changes.


The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you invested. Equities do not provide the security of capital which is characteristic of a deposit with a bank or building society.


The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

*Will writing and Powers of Attorney involve the referral to a service that is separate and distinct to those offered by St. James's Place and along with Trusts are not regulated by the Financial Conduct Authority.


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