Whilst making a will and estate planning both deal with choosing who will inherit your estate and who will be responsible for handling all your affairs after you’ve gone, estate planning actually goes much further than this, putting strategies in place to ensure loved ones are protected and provided for in the best way possible, and to reduce the amount of Inheritance Tax payable on your estate.
Is estate planning the same as a will?
There are numerous benefits to making a will, but there are even more benefits around estate planning. Making a will is actually just one single aspect of estate planning. So, if you have made the wise decision to make a will, then you are one step closer to fully getting your affairs in order. But why stop there? Let’s take a look at how making a will and estate planning differ.
Why make a will?
A will is the only way you can be certain that your personal wishes will be met after you’ve gone.
Without a will, when you die your estate will be dealt with via the intestacy rules. This could mean that what you leave behind doesn’t actually fall into the hands of your first choice of beneficiaries. It will certainly mean that any charities you wanted to benefit from your estate will lose out, because a will is the only way to leave charitable legacies.
A will is a legal document that sets out your chosen beneficiaries for the respective parts of your estate. It also states who your executors will be, that is, the people you wish to appoint to administer your estate.
Through your will, you can also appoint guardians for your children, should you pass away whilst they are still young.
A will makes the whole process of dealing with your estate so much smoother. It can help to avoid family disputes over who should get what, and protect assets for future generations.
So that, in a nutshell, is what a will can do for you. But what about estate planning?
Why is estate planning important?
Estate planning does involve making or updating a will. But there is a lot more to it than that. Don’t be put off, however, because with the right expert guidance, taking the time to plan your estate will provide a raft of benefits for you, and for your loved ones.
Estate planning is important because it gives you the opportunity to protect your assets for future generations. It is also your opportunity to make provision for your dependants should an unfortunate situation leave you unable to take care of them yourself, and to put measures in place to ensure someone you trust is legally able to manage your finances and make decisions on your behalf should you become unable to do so due to illness, injury or incapacity.
In ‘non-standard’ situations, estate planning is particularly important. Such situations could include, for example, if you are divorced or separated; if you have remarried following the death of a previous spouse; if you have young or disabled beneficiaries; if you are not married but living with a long-term partner; if you jointly own property; if you own a business; if you have debts or have been made bankrupt; if you wish to protect your family home from being sold to cover long term care costs, and if you have a desire to minimise the amount of Inheritance Tax payable on your estate.
What does estate planning involve?
Estate planning involves a range of strategies. Once you have set out your goals and wishes, an estate planner will recommend a variety of solutions for you.
Typically, aside from making a will, estate planning can involve any of the following:
- Lasting Powers of Attorney
- Inheritance Tax planning
- Trust creation
- Professional trustee service
- Property preservation strategies
- Lifetime gifting advice
- Asset protection
- Investment strategy and portfolio management
- Wealth management advice
A tailored estate planning service, from trusted chartered financial planners Partridge Muir & Warren
Here at Partridge Muir & Warren, we have at your disposal our own in-house team of legal experts, financial planners and tax advisers, all ready to provide you with the comprehensive estate planning advice you need to ensure your loved ones are provided for, and your assets are protected.