Estate Planning checklist: how to plan for your future

Estate planning is an essential step in ensuring that your assets are protected and distributed according to your wishes after you pass away. While it can seem complex, with careful preparation and professional advice, you can create a plan that offers peace of mind to you and clarity for your loved ones. This handy checklist outlines the key elements of estate planning in the UK to help guide you through the process.

Create a Will

A valid Will is the cornerstone of your estate plan. It outlines how you want your assets distributed after your death, names an executor to manage your estate, and can also specify your wishes with regards to guardians for any minor children. Without a Will, the rules of intestacy apply, meaning your assets will be divided according to Scotland’s Succession laws, which may not reflect your intentions.

Consider establishing a trust

In some cases, a trust can be a useful tool for managing your estate, particularly if you have complex financial arrangements or wish to avoid potential inheritance tax issues. A trust allows you to pass assets to beneficiaries while specifying how and when they should receive them.

Update your beneficiaries

Many financial products allow you to name beneficiaries directly, ensuring that those assets are passed on without requiring Confirmation (known as ‘Probate’ in England). Examples include life insurance policies, pensions, and certain investment accounts. It’s important to regularly review and update these designations, especially after significant life changes such as marriage, divorce, or the birth of a child. Make sure to check life insurance policies, pension schemes and any investments with beneficiary nominations.

Establish a Power of Attorney

Estate planning is not just about preparing for after your death. It’s also crucial to plan for situations where you may lose the capacity to make decisions yourself. A Power of Attorney enables someone you trust to assist in managing your affairs. It can also include powers allowing your Attorney to make decisions on your personal care and welfare, but only in the event you no longer had capacity to make those decisions for yourself. There are three types of Power of Attorney, namely:

Continuing Power of Attorney: Allows someone to act alongside you in managing your finances, including paying bills, handling property, and managing bank accounts.

Welfare Power of Attorney: Allows someone to make decisions about your medical care, living arrangements, and general welfare, but only in the event a doctor had certified that you no longer had capacity to make those decisions for yourself.

Combined Power of Attorney: Contains both sets of powers as above.

Store your documents safely

Once your estate planning documents are complete, it’s crucial to store them safely. Make sure your Will, trusts, LPAs, and any other important documents are kept in a secure location such as a fireproof safe. Let your executor or a trusted family member know where these documents are stored so they can easily access them when needed. You may also choose to store these documents with your solicitor or with a professional storage service.

Care costs planning

The rising costs of residential care combined with an ageing population means that care cost planning has become increasingly relevant for many families. Taking steps while you still have the capacity to try and plan for care home fees can be of enormous help to family and loved ones.

Digital assets

Many individuals hold digital assets, these can often be forgotten about during estate planning discussions. It is important to consider if and how these can be passed onto loved ones and whether service-providers allow for elections to be made about who should receive the asset on death.

Funeral instructions

A death declaration with funeral instructions can be included in a Will. This can state if you have a preference in relation to burial or cremation, and who you would like to arrange your funeral, which can help alleviate the stress of planning the funeral for loved ones.

Estate planning is a vital step in ensuring your assets are passed on according to your wishes and that your family is taken care of in the event of your death or incapacity. By following this checklist, you can ensure that your estate is organised, your tax liabilities are minimised, and your loved ones are protected.