WILLS

A well-drafted Will ensures your assets are passed on exactly as you intend.

LASTING POWER OF ATTORNEY

Health & Welfare LPA and Property & Financial Affairs LPA allow someone you trust to make important decisions on your behalf if you lose capacity.

TRUSTS

Trusts provide long-term protection for family wealth against third-party claims, disputes and future uncertainties.

THE IMPACT

Protect your family at the hardest moments.

A properly structured estate plan protects your family during emotionally difficult times, reduces conflict and ensures your affairs are managed smoothly and according to your wishes.

FREQUENTLY ASKED QUESTIONS

Your questions, answered.

What are the 7 steps in the estate planning process?

The estate planning process typically involves the following seven steps:

1. List your assets and liabilities

 Identify what you own (property, savings, pensions, investments) and any outstanding debts.

2. Decide who you want to benefit

 Clearly define who should inherit your assets and in what proportions.

3. Write a Will

 A Will ensures your wishes are legally recorded and followed after your death.

4. Consider trusts where appropriate

 Trusts can help control how assets are passed on, protect beneficiaries, or support tax planning in certain circumstances.

5. Plan for taxes

 Review allowances, exemptions, and strategies to reduce potential inheritance tax where possible.

6. Plan for Medical & Financial decisions

 Appoint attorneys to carry out your wishes and manage your estate by using Lasting Power of Attorneys for Health & Welfare as well as Financial decision.

7. Review and update regularly

 Estate plans should be updated after major life events such as marriage, divorce, children, or changes in wealth

Is it better to have a will or a trust in the UK?

For anyone with money or assets, it is essential to have a Will. Whether you also need a Trust depends on your personal and family circumstances.

A Will and a Trust serve different purposes, and in many cases, they are used together, not instead of each other.

Will:

A  Will ensures your assets are passed on exactly as you intend after your death. 

If you die intestate (without a Will), your estate is distributed according to UK intestacy rules, which follow a strict legal hierarchy.

Trust:

A Trust is a legal entity formed by a person (Settlor) for passing on assets (money or property) to their beneficiaries. 

The settlor also appoints their trusted people (called Trustees) to manage the Trust governed by the rules mentioned in the Trust deed.

Trusts are commonly used to:

• Control how, when and to whom the assets are passed on

• Protect assets from any third-party claims raised due to bankruptcy and divorce

• Plan for Inheritance tax or estate planning objectives

So, a will is essential for almost everyone, whereas a Trust is optional and only appropriate if you have complex family arrangements or specific tax or asset protection goals.

Can the Next of Kin override the executor of the will?

In the UK, next of kin cannot override the executor of a valid will. The executor named in the will has the legal authority and responsibility to administer the estate and carry out the deceased’s wishes.

While next of kin cannot simply replace or overrule an executor, they may raise concerns if the executor is not acting in line with the will. In such cases, the matter must be resolved through the courts, not by family decision alone.

What if there is no will?

If someone dies without a will, there is no executor. Instead, an administrator is appointed under the rules of intestacy, and next of kin may have priority in applying for this role.

What assets cannot be placed in a trust?

In the UK, most assets can technically be placed in a trust, such as cash, investments, property, business interests, and life insurance policies, which are all commonly used. 

However, certain assets are either unsuitable or restricted in practice. 

A pension fund cannot be placed in a trust as it sits in its own separate legal structure and is already outside your estate for inheritance tax purposes (though this changes from April 2027). 

State benefits and entitlements are personal rights and cannot be transferred. 

Jointly owned assets cannot be placed into trust unilaterally without the agreement of all owners. 

Overseas assets may face legal or jurisdictional complications. 

And while your main residence can technically be transferred into a trust, doing so usually triggers capital gains tax at the point of transfer and removes your entitlement to Private Residence Relief, making it rarely worthwhile without specialist advice.

How to plan for inheritance?

Inheritance planning is relevant both when you expect to receive an inheritance and when you plan to pass assets on to others.

In the UK, inheritance tax (IHT) can significantly reduce the value of an estate if no planning is done in advance.

Why is inheritance planning necessary?

Unlike some countries where no inheritance or estate tax applies, the UK charges inheritance tax at 40% on the value of an estate above available allowances.

Inheritance tax is usually payable within six months of death, and the responsibility to settle the bill falls on the executors or family, often at a difficult time.

Without planning, this can result in:

• A large and unexpected tax bill

• Financial pressure on the family

• Assets needing to be sold quickly to raise funds

Benefits of planning ahead

Careful and timely inheritance planning can help to:

• Reduce the amount of inheritance tax payable

• Ensure the family is financially prepared for any tax liability

• Protect family assets from being sold unnecessarily to fund tax payments

• Pass on wealth in a more controlled and efficient way

How to plan for inheritance

Inheritance planning usually starts with understanding the potential size of your estate and any future tax exposure.

This involves reviewing:

• Assets, savings, pensions, and investments

• Liabilities and ongoing expenses

• How your estate may change over time

A key part of planning is understanding how and when assets are used during retirement, as this affects the eventual estate value. Withdrawals can come from different sources such as pensions, ISAs, savings, or investment structures, and the order in which these are used can make a difference.

Understanding inheritance tax allowances

In the UK, individuals currently have:

• A nil rate band of £325,000

• A residence nil rate band of up to £175,000 (subject to conditions)

The value of the estate above these allowances may be subject to inheritance tax, making early planning particularly important for larger estates.

Inheritance planning is not just about tax — it is about protecting family wealth, reducing stress, and ensuring assets pass on as intended. Starting early gives more flexibility and more options than leaving planning until later in life.

What is the best way to leave your estate to your children?

There is no single right answer. The best approach depends on your family circumstances, your objectives, what you have already done, and how much access and control you want to retain during your lifetime. What follows is a framework for thinking it through.

Start with the basics in place

A well-drafted will and a Lasting Power of Attorney. Without a valid will, your estate passes under intestacy rules, which rarely match what most people would have chosen. An LPA ensures that if you lose capacity before you die, someone you trust can manage your affairs rather than leaving the family to apply to the Court of Protection.

Set your Objectives

The conversation about how to leave an estate to children is really a conversation about what you are trying to achieve. Equal treatment between children is not always the same as fair treatment, particularly where one child has already received substantial lifetime gifts or financial support or has benefited from living rent-free in a parent's property. Where previous gifting has been unequal, a well-drafted will can explicitly account for this to reduce the risk of disputes after death.

For parents with blended families, the risk of sideways disinheritance deserves particular attention. If a property or estate passes outright to a surviving spouse on the first death and that spouse later remarries or changes their will, the children of the first marriage may be disadvantaged. 

Think if you require access & control of the money you want to eventually pass on.

If you need both access to your capital and want to retain some control, Business Relief qualifying investments are worth considering. Assets held in qualifying BR investments for at least two years can pass outside the taxable estate, while the investor retains full access throughout their lifetime. This is particularly relevant given the April 2027 pension changes, which will bring pension funds into the IHT estate.

If you may need access but are prepared to give up some control, a loan trust allows you to lend money to a trust rather than gift it. The loan remains repayable to you if needed, but any growth on the invested sum sits outside your estate from day one. It is a measured middle ground for those who are not yet ready to make an outright gift.

If you need neither access nor continued control, a discretionary gift trust removes the capital from your estate after seven years and gives trustees the flexibility to distribute to beneficiaries according to circumstances at the time. It is useful when children are young or when family dynamics may change.

How big is your pension pot decides some Inheritance tax angle.

For estates where a pension forms a significant part of the wealth, the timing of death matters considerably under current rules. Death before age 75 means pension funds can currently pass to beneficiaries entirely free of income tax as well as outside the IHT estate, making the pension arguably the most tax-efficient asset to leave. From April 2027, pension funds will be brought into the IHT estate, fundamentally changing this calculation. For anyone approaching retirement with a substantial pension, reviewing the sequencing of how assets are drawn down and how the estate is structured before April 2027 is genuinely time-sensitive planning.

In Essence…

Every family is different and needs tailored estate planning with Wills, trusts, pensions, property ownership structures, previous gifts, and family dynamics being considered. The best outcomes come from an adviser who understands the full picture around tax, relationships, risks and can structure a plan that holds together across all of them.

What are the disadvantages of putting your house in a trust?

The disadvantages are significant and frequently underestimated. 

Transferring your home into a trust means giving up legal ownership. After that, you cannot sell, refinance, or gift the property without the trustees' approval. 

From a tax perspective, continuing to live in the property rent-free after placing it in trust means HMRC treats it as a gift with reservation of benefit, so it remains in your estate for inheritance tax purposes anyway, and hence no IHT benefit is achieved. 

You also risk losing the Residence Nil Rate Band (worth up to £175,000), which requires the property to pass directly to descendants. Transferring to a trust means you no longer own the property to leave to descendants, so you may end up owing more IHT, not less. 

If the property's value exceeds your nil rate band of £325,000, there could be an immediate IHT charge of 20% on entry, plus ten-year periodic charges and exit charges to report to HMRC. 

On capital gains, most homeowners benefit from Private Residence Relief, but placing the property in trust can cause this relief to be lost, leaving a potential CGT liability of up to 24%. 

Finally, if you later need care, the local authority can investigate whether the transfer was a deliberate deprivation of assets and treat you as still owning the property, nullifying the arrangement entirely. 

For most people, putting their home in a trust creates more tax problems than it solves, and hence specialist advice is essential before proceeding.

Do trusts avoid inheritance tax?

In the context of UK tax law, avoidance carries a specific and negative meaning as it refers to arrangements that seek to circumvent the intention of legislation, often in ways HMRC will challenge. That is not what responsible estate planning is about, and it is not what a trust is designed to do.

What trusts can do is that when used appropriately and at the right time, they may ensure that your estate is structured in a way that makes full and legitimate use of the allowances, reliefs and exemptions that parliament has deliberately built into the inheritance tax framework. 

HMRC's own guidance recognises a range of lawful mechanisms through which assets can pass outside of or at a reduced rate of inheritance tax. These include the nil rate band (currently £325,000), the residence nil rate band (up to £175,000 where a home passes to direct descendants), the spouse and civil partner exemption, Business Relief on qualifying assets, Agricultural Relief, annual gifting exemptions and pension assets (currently outside the IHT scope, though changing from April 2027). 

Trusts can be used with several of these provisions in ways that can be structurally beneficial, but they do not override or circumvent them.

What is the strongest type of trust?

A discretionary trust is widely regarded as the most powerful type of trust in UK estate planning, accounting for the vast majority of trusts created. Its strength lies in one defining feature that no beneficiary has any automatic right to the assets. 

Trustees decide who receives what, when, and in what amount, and that makes the trust highly adaptable as family circumstances change over time. Because no beneficiary legally owns the assets, a discretionary trust offers the broadest protection because assets are shielded from a beneficiary's divorce proceedings, creditors, and means-tested care fee assessments. This flexibility also extends to tax planning as trustees can distribute income and capital in a way that reflects beneficiaries' individual tax positions at the time of distribution. 

The trade-off is complexity. 

Discretionary trusts carry their own tax regime, including ten-year anniversary charges and exit charges and require engaged, informed trustees to function properly. 

Used well, they are the most versatile and protective structure available in UK estate planning, but they should always be set up with professional legal and financial advice.

What is the 10-year inheritance tax rule?

The 10-year rule refers to the periodic charge that applies to discretionary trusts and other relevant property trusts under UK inheritance tax law. 

Every ten years from the date a trust is created, HMRC levies a charge on the value of the assets held in the trust, at a maximum rate of 6% on any value above the available nil rate band, which is currently £325,000. If the trust's assets remain below the nil rate band, no charge is due. Where they exceed it, the effective rate is calculated as 30% of the standard lifetime rate of 20%, resulting in a maximum of 6%. 

Alongside this periodic charge, an exit charge also applies when capital is distributed to beneficiaries between ten-year anniversaries, calculated proportionally based on the time elapsed since the last periodic charge. 

The trustees are responsible for calculating, reporting and paying the charge to HMRC within six months of the anniversary date.

How long does trust administration take?

It depends on the type of trust, the nature of the assets held and whether any tax charges or disputes arise. A straightforward lifetime trust that is actively managed with regular trustee meetings, clear records and no contested distributions can run smoothly on an ongoing basis with relatively little administrative burden. However, specific events within a trust's life carry their own timelines and obligations.

Setting up a trust typically takes a few weeks once legal documentation is in order and any initial IHT reporting to HMRC has been completed. 

Transferring assets into the trust, particularly property or unquoted shares, can take longer depending on the asset type and any third-party involvement. 

The ten-year anniversary charge must be reported and any tax due paid to HMRC within six months of the anniversary date. 

Distributing assets to beneficiaries triggers exit charge calculations and reporting obligations, which can take several weeks to complete correctly. 

Where a trust is wound up entirely, the process typically takes three to six months, though complex estates with multiple asset classes, overseas holdings, or ongoing tax investigations can take considerably longer.

The most common cause of delay is poor record-keeping by trustees. Incomplete documentation of decisions, missing valuations or failure to register the trust with HMRC's Trust Registration Service, which is now a legal requirement for most UK trusts, are some of the issues. Keeping administration current throughout the life of a trust, rather than addressing it only at key events, makes every stage significantly more straightforward.

What are the four major types of trusts?

There is no fixed number of trust types defined in UK law. However, GOV.UK's guidance on trusts and taxes identifies three main categories used in estate planning, each taxed differently.

A bare trust is the simplest form. The beneficiary has the right to all of the capital and income of the trust at any time if they are 18 or over in England and Wales and 16 or over in Scotland. This means the assets set aside by the settlor will always go directly to the intended beneficiary. Bare trusts are commonly used to hold assets for children until they reach adulthood.

An interest in possession trust is one where the trustees must pass on all trust income to the beneficiary as it arises. A typical example is where the income from a portfolio goes to a surviving spouse for the rest of their life, with the capital then passing to children on the spouse's death. The income beneficiary has a right to income but not to the underlying capital. 

A discretionary trust is one where trustees can make certain decisions about how to use the trust income and sometimes the capital. For example, where a future need exists, like a grandchild who may need more financial help than other beneficiaries at some point in their life. No beneficiary has a fixed entitlement, which gives trustees maximum flexibility and provides the broadest asset protection. This is the most widely used form of trust in UK estate planning. 

Beyond these three, trusts for vulnerable beneficiaries, including disabled persons trusts, have their own specific tax treatment under HMRC's rules and are worth noting separately where a beneficiary has additional needs.

The right type of trust depends entirely on your objectives, your family circumstances and the assets involved. Each carries different tax consequences for income tax, capital gains tax, and inheritance tax, which is why professional advice is essential before any trust is established.

Who cannot be a beneficiary of a will?

In England and Wales, almost anyone can be named as a beneficiary as there are no restrictions based on age, nationality, or residency.

Children can be named as beneficiaries but cannot receive their inheritance directly until they turn 18 — assets are held on trust in the meantime. 

The simplest way to protect your beneficiaries is to ensure your will is properly drafted and witnessed by independent parties who have no interest in the estate.

Does a will have to be notarised?

No. In England and Wales, a will does not need to be notarised.

What are the four basic types of wills?

Unlike some areas of law, there is no official classification of wills into set types under English law. A will is simply a legally binding document that sets out your wishes for what happens to your estate after you die. 

What the law does specify (under the Wills Act 1837) are the requirements for a will to be legally valid in England and Wales and the person making it must be at least 18 and of sound mind; it must be in writing; it must be signed by the testator in the presence of two independent witnesses who are both present at the same time and who then sign it themselves. Neither witness should be a beneficiary or married to one.

What varies is not the type of will but the complexity of its contents, which depends entirely on your personal and financial circumstances. A will that has not been reviewed since a marriage, a divorce, a birth, a death or a significant change in assets may no longer do what you think it does.

How is LPA different from Will?

A Lasting Power of Attorney (LPA) and a Will serve entirely different purposes and operate at different points in your life.

The main distinction is that an LPA takes effect during your lifetime. A will, by contrast, takes effect only on death. 

You, through your LPA, appoint a person you trust as your attorney to make decisions on your behalf if you lose mental capacity. There are two types: 

• Property and financial affairs and 

• Health and welfare

Without an LPA in place, your family would need to apply to the Court of Protection to manage your affairs, which is a costly and time-consuming process with no guarantee that the person appointed would be someone you would have chosen.

A Will sets out who inherits your assets, who you appoint as executor to administer your estate, and, importantly for parents of young children, who you wish to act as guardian if both parents were to pass away. Without a valid will, your estate passes under the intestacy rules, which rarely reflect what most people would actually want.

When should I set up a lasting power of attorney?

The sooner, the better.

A Lasting Power of Attorney can only be set up while you have mental capacity. It is not something you can arrange once a diagnosis has been made or when capacity is already in question. At that stage, the option is gone, and your family would need to apply to the Court of Protection to be appointed as a deputy, a process that is significantly more expensive, time-consuming, and uncertain than having an LPA in place from the outset.

Mental capacity can be lost suddenly through a stroke, a serious accident or an unexpected medical event, as well as gradually through conditions such as dementia. There is no reliable way to predict when or whether this will happen, which is why the right time to put an LPA in place is while you are well and the decision is entirely straightforward.

Who is the best person to give power of attorney to?

It depends on your personal circumstances, your family dynamics and the nature of the decisions your attorney may need to make. But there are clear principles that should guide the choice.

The most important quality is trustworthiness. Your attorney will have significant legal authority over your finances, your property or your health and welfare, potentially at a time when you are at your most vulnerable. The person you choose must be someone whose judgment you trust completely and whose interests are genuinely aligned with your own.

Beyond trust, the right person should be practically capable of carrying out the role. A property and financial affairs LPA may require someone who is comfortable dealing with banks, HMRC, investment accounts and property transactions. A health and welfare LPA requires someone who can make difficult medical decisions under pressure, communicate clearly with healthcare professionals and advocate for your wishes even when that is emotionally difficult.

Most people appoint a spouse or civil partner, an adult child or a close friend.

WHAT THIS MEANS FOR YOU