A Step by Step Guide to the Estate Planning Process

As life goes by, you tend to accumulate assets, some degree of wealth, and personal valuables. As you get older, you naturally start to wonder what will happen to all of these things when you die, or become incapacitated. This is precisely where estate planning comes in. Whether you are making a will, setting up trusts, arranging lasting powers of attorney or Inheritance Tax planning, estate planning will allow you to legally set out your wishes. If you are ready to start the estate planning process, the following steps should prove helpful to you as you prepare to get your affairs in order.

Estate planning, when done under the guidance of specialists, will give you the reassurance that your assets will pass to whoever you want them to, and that any particular wishes you have will be carried out. It will also help to avoid disputes, which can commonly arise when someone dies and there are no set instructions as to what should happen, or who should get what.

Once you feel ready to see a specialist estate planner, you will need to go through a few steps in advance to prepare yourself for the estate planning process.

Create an inventory

Unless you set out precisely what you own, you’re never going to be clear on what you have and how you might distribute it.

Making an inventory is a good way to get a picture of your assets and debts. Compile a thorough list of everything you own and owe. This should include bank and building society accounts, savings, pensions, insurance plans, vehicles, property, valuables and anything else of any worth, together with any debts or outstanding finance.

Noting down account numbers and contact information will also help those you appoint to deal with your estate better find their way around when the time comes.

Keep your inventory in a secure location, together with copies of important documents, and put a copy with your will so that your executor will not fail to find it.

Plan for the unexpected

It is important to think about what would happen if the unexpected happened, such as passing away whilst children are still young, or becoming incapacitated through accident or illness.

Before you start the estate planning process, be clear on your contingency plan, so that the adviser can guide you on the most appropriate methods to meet your wishes.

You may for example wish to think about who you would appoint as guardians to take care of your children, or other dependants, which could for example be a disabled or incapacitated adult. Trusts can also be set up to provide for them financially.

Bear in mind that if you have remarried, your children from a previous relationship may not be automatically provided for, so be sure to discuss this with your estate planner. Also make certain you discuss provision for any dependants who are receiving state benefits, because you will need to make sure that any inheritance they receive does not jeopardise their payments.

If you were to become incapacitated and unable to take care of your own financial affairs, or make health or welfare related decisions, think about who you would trust to take over those responsibilities for you courtesy of a lasting power of attorney (LPA). If you don’t put an LPA in place, then your family would have to apply to the court to be able to deal with your affairs, which can be a costly and time consuming process. This is a very important aspect of the estate planning process.

Think about protecting your assets

One of the most important aspects of estate planning revolves around protecting your assets so that as much passes to your beneficiaries as possible.

It is useful to know approximately how much your property and other assets are worth, so that if they go over the prevailing threshold, your estate planner can work with you to put a strategy in place to mitigate the amount of Inheritance Tax payable on your estate. Again, trusts may be used, or you may be advised to make use of lifetime gifts, property transfer or even asset disposal in order to meet your goals.

You may also wish to think about long term care needs, and ways of protecting your property should that become necessary. Your estate planning specialist will be able to advise you on such matters, so be sure to raise it with them.

Decide who should get what

Most people have in mind who they want to leave certain assets to. Never assume that property or other assets will automatically pass to a partner, spouse or children, because that is not always the case. If you are co-habiting but unmarried for example, have remarried and have children from a previous relationship, or you are separated but not divorced, you are going to need expert advice about how your assets will pass.

Once you set out who you wish your assets to pass to, your estate planner will get to know your individual family situation and advise you on the best route towards achieving your wishes.

This is where making a will comes into its own. Without one, you will never have complete certainty over who will inherit your assets. The intestacy rules will apply, meaning that your estate will be divided up according to a set hierarchy of inheritance. You won’t be able to leave charitable donations either, or appoint people you trust to deal with your estate. Our article, five reasons why you need a will, goes into more detail on this subject.

Also think about other valuables, such as works of art, antiques and jewellery, which you may have already promised to certain people, as you will need to set these out in your will. And don’t forget about your digital assets either, such as music and photographs. You may also wish to leave instructions as to what should happen to your social media accounts, whether they are closed down or ‘memorialised’.

Make a list of people you trust

When you make your will or a lasting power of attorney, you are going to need to appoint people you trust to handle things for you. Take your time to consider who you would like to take on the role of executor for your will, and attorney for your LPA. Be sure to discuss the matter with your chosen individuals to ensure they are comfortable with the responsibility.

If you are finding it difficult to allocate the roles, you could always consider appointing a solicitor or other professional.

Specialist estate planning guidance from Partridge Muir & Warren

At Partridge Muir & Warren, we offer specialist estate planning advice Surrey wide. Our in-house team of legal experts, financial planners and tax advisers are all on hand to provide you with the in-depth guidance you need to make certain your loved ones are provided for, and your assets are protected.

To discover how we can assist you with the estate planning process, please get in touch.