YOUR ESTATE PLANNING OPTIONS.
Estate Planning – What is your estate?
EVERYBODY has an estate. It comprises everything you own— car, home, savings, possessions etc.
Most people want to control how these things pass to their family & friends when they die. They do
this by providing instructions stating whom they want to get what & when. Ideally this should be
achieved without paying large sums in tax, legal fees, and court costs. Obtaining probate (i.e. sorting
out the estate of the deceased) can be very costly and take a long time.
This is estate planning. It comprises three elements: –
A Will: Everyone who has a partner/spouse or children should have a valid up-to- date Will. If you
don’t have one what happens is determined by law and is unlikely to be what you’d have wanted.
Lasting Powers of Attorney: These enable you to nominate people you trust to manage your
affairs if you become unable so to do at any time through accident or illness. They are essential.
Trusts: These are used to protect your assets and ensure they pass to whom you want at the right
time. There are two main types: a) one that’s built into your Will which helps protect your share of
the family home and b) so called Asset Protection Trusts. These are widely marketed as being the
best option for maximum savings, particularly the saving of care home costs. They are, however,
very expensive and offer no guarantee of success since many local authorities will challenge them.
As such we do NOT recommend them.
Estate planning is something that can grow and be developed over
time. Having a valid up-to- date Will and Lasting Powers of Attorney
is the starting point! Let’s now look at the various options:
1. The Best Option – A Protective Trust in your Wills (a Will Trust)
This can be likened to comprehensive car insurance – it’s designed to protect you. But you
only pay once, not every year!
Please note: a Will Trust can work very well for couples but it is not usually of any benefit to a
Benefits: A Will Trust is incorporated into both Wills of a couple & comes into effect upon the
death of the first of them. It is s specifically designed to avoid post first-death threats by protecting
the survivor and helping to avoid the first to die’s assets passing:
– It can protect against losing all the value of the family house to pay for care home fees
The Law Society states that one of the possible benefits of a trust, may be ‘avoiding the need to sell
the home to pay for charges such as residential care or nursing fees thus securing the family’s
Sideways to a new spouse or partner and down their bloodline to their children, disinheriting your
– To future creditors/means tested benefits, reducing or wiping out your loved ones’ inheritance.
Downsides: – A Will Trust is created when the first person passes away and terminates on second
death. It is a basic estate planning tool and is a considerable improvement on a simple Will.
A Will Trust should be seen as an essential planning requirement for anyone with property and/or
children who wants to try and preserve their assets for their children.
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2. Next Best Option – A Basic Will
A Basic Will is like third party, fire and theft car insurance; it can protect you against basic
Benefits: A Will avoids intestacy problems (see 3. below), allows guardians to be appointed avoiding
the Courts becoming involved in decisions where children are orphaned. Costs are minimal.
Basic mirror Wills for couples are only really appropriate for very simple circumstances.
Downsides: A Will can only direct how the assets you own at the date of your death are distributed
and If the value of these assets is eroded whilst you are alive there will be little to pass on to your
beneficiaries. If you own property and/or have children and want to have any degree of certainty
how your estate passes a basic Will is not enough – you need a trust.
A basic Will is at risk to factors such as “what if my beneficiaries die early, get divorced, have
financial problems, receive means tested benefits etc.”
The absolute bare minimum for anyone who has children or is a property owner is having a valid
up-to- date Will and Lasting Powers of Attorney.
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3. The Worst Option – Having no Will at all – Intestacy
Having no Will is like driving a car without ANY insurance; don’t do it.
Benefits: No set up cost.
Downsides: The Laws of Intestacy apply so the state dictates who gets what. A spouse’s inheritance
is limited. A partner gets NOTHING. The legal process of winding up the estate becomes more
difficult, time consuming and expensive. There is no protection and no certainty.
A valid up to date Will is vital and having Lasting Powers of Attorney is essential. These are the
foundations of your estate plan. On top of those foundations sits the estate planning in the form of a
Many clients undertake basic estate planning initially and come back and do full estate planning
when they get their lump sum on retirement or inheritance.
Any estate planning is always better than none and the earlier any planning is carried out the more
effective it will be.
Please don’t hesitate to contact us with any questions you may have.