How to Make an Estate Plan in the UK: A Step-by-Step Family Checklist

An estate plan is a coordinated set of legal and practical arrangements designed to manage your affairs during your lifetime and determine what happens to your assets after death.

Not every family needs the same documents or structures.

However, most estate planning reviews should consider:

• A current record of assets and liabilities.
• A legally valid will.
• Appropriate executors and beneficiaries.
• Lasting powers of attorney.
• Property ownership arrangements.
• Pension and life assurance nominations.
• Potential inheritance tax exposure.
• Trusts where there is a genuine need.
• Secure document storage.
• Arrangements for future reviews.

The objective is not to create as many documents as possible. It is to ensure that the different elements work together and reflect your wishes.

Before making decisions about inheritance, establish what your estate contains.

Start by recording your main assets and their approximate values.

These may include your home, other property, savings, investments, business interests, personal possessions and money owed to you.

You should also record pensions and life assurance policies, even where benefits may not automatically form part of your estate.

What Information Should You Gather?

You do not need to place passwords or sensitive account access details into an ordinary estate planning checklist.

Instead, maintain a secure record of where relevant information can be found.

An accurate asset inventory helps identify potential inheritance tax exposure and makes future estate administration easier.

Once you understand your assets, consider whom you want to provide for.

Your intended beneficiaries may include your spouse, civil partner, unmarried partner, children, grandchildren, relatives, friends or charities.

This stage is about establishing priorities before choosing legal structures.

For example, you may want your surviving spouse to have financial security while ensuring that children ultimately inherit particular assets.

Alternatively, you may wish to leave different proportions of your estate to different beneficiaries.

Consider Different Family Circumstances

Questions worth discussing include:

• Are any beneficiaries financially dependent on you?
• Do you have children from a previous relationship?
• Are any beneficiaries minors?
• Does anyone require additional support because of disability or vulnerability?
• Would an outright inheritance be appropriate?
• Are there family circumstances that could create disagreements?

These questions may influence whether a straightforward will is sufficient or whether specialist provisions should be considered.

Estate planning cannot guarantee that disputes will never occur, but clear arrangements may reduce uncertainty.

Property ownership can materially affect what happens after death.

In England and Wales, jointly owned property may be held as joint tenants or tenants in common.

Joint Tenants

Where property is held as beneficial joint tenants, the deceased owner's interest normally passes automatically to the surviving joint owner.

It does not pass under the deceased person's will.

Tenants in Common

Where property is held as tenants in common, each owner has a distinct beneficial share.

That share can generally pass under their will or, if there is no valid will, according to the applicable intestacy rules.

Neither arrangement is automatically preferable.

The appropriate structure depends on your circumstances, objectives and any existing legal agreements.

Changing ownership can have legal, tax and mortgage implications, so professional advice may be appropriate.

Related Telmar article: Inheritance Tax on the Family Home.

A will is a central part of most estate plans.

It allows you to set out how assets passing under your will should be distributed and who should administer your estate.

It can also appoint guardians for minor children and establish trusts where appropriate.

What Decisions Should Your Will Address?

You should consider:

1. Who will act as executor.
2. Who will inherit your estate.
3. Whether particular gifts should be made.
4. Who should inherit if a beneficiary dies before you.
5. Whether trusts or other provisions are needed.
6. Who should be appointed as guardian for minor children.

A will must satisfy the legal requirements applicable in the relevant UK jurisdiction.

In England and Wales, this includes requirements concerning capacity, intention, signing and witnessing.

A will may also need reviewing after marriage, divorce or other significant changes.

Where family arrangements are complicated, specialist legal advice can help reduce the risk of drafting errors or unintended consequences.

Related Telmar article: Do I Need a Will?

An executor is responsible for administering your estate after death.

This can involve identifying assets, dealing with liabilities, completing inheritance tax requirements and distributing the estate.

The role may require considerable time, organisation and communication with beneficiaries.

When choosing executors, consider their reliability, willingness to act, ability to handle paperwork and potential conflicts of interest.

You may appoint suitable family members, trusted individuals or professional executors.

A professional appointment can involve fees, so the likely charging arrangements should be understood.

It is also sensible to consider replacement executors in case your first choice cannot act.

Related upcoming Telmar article: How to Choose an Executor for Your Will: Responsibilities and Common Mistakes.

A will addresses what happens after death. It does not give relatives general authority to manage your affairs while you are alive.

In England and Wales, lasting powers of attorney allow you to appoint people to make specified decisions on your behalf.

There are two types.

Property and Financial Affairs LPA

This can cover matters such as paying bills, managing bank accounts, dealing with investments and making property-related decisions.

Depending on its terms, a registered property and financial affairs LPA may be used with your permission while you still have mental capacity.

Health and Welfare LPA

This can cover decisions about care, daily living and medical treatment.

It can only be used for decisions you lack capacity to make yourself.

An LPA must be registered before it can be used.

When selecting attorneys, consider their trustworthiness, availability and ability to act in your interests.

Different legal arrangements apply in Scotland and Northern Ireland.

Related Telmar article: Lasting Power of Attorney Explained.

Pensions and life assurance policies are sometimes overlooked when preparing estate plans.

However, they can represent a significant proportion of family wealth.

Check whether your pension provider holds an up-to-date expression of wish or beneficiary nomination.

You should also establish how death benefits are governed under the scheme's rules.

A nomination does not necessarily guarantee that benefits will be paid to the named person.

Life assurance policies should be reviewed to establish who receives the proceeds and whether any trust arrangements exist.

The inheritance tax treatment of pensions and death benefits can be affected by legislation and scheme structure.

These arrangements should therefore be reviewed alongside your will rather than assumed to operate in the same way.

Inheritance tax planning should begin with an assessment of your estate, not an assumption that you need a particular product or trust.

The standard UK inheritance tax rate is generally 40% on the taxable estate above available exemptions and allowances.

The nil-rate band, residence nil-rate band, transferable allowances and other reliefs may affect the eventual liability.

Eligibility depends on the circumstances.

What Should an Inheritance Tax Review Consider?

A review may examine:

• The estimated value of your estate.
• Property ownership.
• Previous lifetime gifts.
• Available exemptions and reliefs.
• Business and agricultural assets.
• Trust interests.
• Pension arrangements.
• Access to funds needed for living expenses.
• How executors could meet tax and administration costs.

Potential planning options should be assessed against financial security, family objectives, costs and legislative uncertainty.

Transferring assets is not automatically beneficial, particularly where you still need access to them.

Related Telmar article: 10 Ways to Reduce Inheritance Tax on Your Estate.

Trusts can help manage assets for beneficiaries under defined arrangements.

They may be useful where beneficiaries are young, vulnerable or where family circumstances require more control over the timing and conditions of inheritance.

However, trusts also create responsibilities for trustees.

Depending on the arrangement, they may involve registration, tax reporting, ongoing administration and professional fees.

A trust should only be considered after establishing the objective it is intended to achieve.

For example, protecting an inheritance for a vulnerable beneficiary involves different considerations from arranging succession for a family business.

Trusts do not automatically prevent family disputes, protect assets from every possible claim or eliminate inheritance tax.

An estate plan is only useful if relevant documents can be located and the arrangements remain appropriate.

Keep a clear record of where your original will, LPA documents, trust deeds and important financial information are stored.

Your executors and attorneys should know how to locate the information they will need.

Avoid leaving sensitive information in unsecured documents.

When Should You Review Your Estate Plan?

A review may be appropriate following:

• Marriage or civil partnership.
• Divorce or separation.
• Birth or adoption of a child.
• Death of an executor, attorney or beneficiary.
• Buying or selling property.
• Retirement.
• Receiving a substantial inheritance.
• Starting or selling a business.
• Changes in health or care needs.
• Relevant legislative changes.

A periodic review, perhaps every three to five years as a practical guideline, may also be helpful where no major changes have occurred.

The appropriate frequency depends on the complexity of your circumstances.

Use this checklist to identify what you have completed and what still requires attention.

Not every item will require new documentation or professional intervention.

The checklist is intended to identify areas for consideration rather than prescribe a particular planning arrangement.

Professional advice may be particularly useful where you have significant assets, business interests, children from previous relationships, vulnerable beneficiaries or overseas property.

It can also help where your existing documents are inconsistent or you are uncertain how different arrangements interact.

A solicitor may be required for specialist legal work, while accountants and appropriately authorised financial advisers may assist with tax or financial considerations.

At Telmar Estate Planning, the starting point for an estate planning discussion is understanding your assets, family circumstances and objectives before considering suitable arrangements.

The aim should be to create a coordinated plan that is understandable, proportionate and capable of being reviewed as circumstances change.

Making an estate plan in the UK begins with understanding what you own, whom you want to provide for and who should make decisions if you cannot.

A will, lasting powers of attorney, beneficiary arrangements and careful record-keeping may form the foundation.

Trusts and inheritance tax planning may be appropriate where particular circumstances justify them.

The important principle is coordination.

A collection of documents prepared independently may not achieve the same result as an estate plan in which ownership, beneficiaries, legal responsibilities and practical administration have been considered together.

Starting early gives you more opportunity to make considered decisions and keep arrangements aligned with your family's changing needs.

1. GOV.UK — Making a Will
   https://www.gov.uk/make-will
   Official guidance on wills, legal validity, witnessing and updating arrangements.

2. GOV.UK — Make, Register or End a Lasting Power of Attorney
   https://www.gov.uk/power-of-attorney
   Official guidance on the two types of LPA, registration requirements and lifetime decision-making.

3. GOV.UK — Joint Property Ownership
   https://www.gov.uk/joint-property-ownership
   Official guidance on joint tenants, tenants in common and how ownership affects what happens when an owner dies.