The common thought processes for young adults about estate planning is that “I am too young”, “it is daunting”, or “I have nothing of value”. However, there is no time like the present when it comes to estate planning!
What is estate planning?
The UK Care Guide defines estate planning as:
“…the act of organising your finances and assets to minimise taxes, care for your heirs, and ensure that your desires are carried out after death.”
Estate planning involves making decisions about the management and transfer of your property, financial resources, and other assets, as well as considering matters such as healthcare directives and guardianship arrangements for minor children.
The primary goal of estate planning is to protect and preserve your assets while minimising taxes, legal complications, and disputes among beneficiaries. By creating an estate plan, you can specify how you want your assets to be distributed, designate someone to make medical and financial decisions on your behalf if you become incapacitated, and plan for the possibility of long-term care.
It’s important to regularly review and update your estate plan as your circumstances change. When done properly estate planning gives you comfort and assurance for the future of your estate.
Steps for estate planning
Typically, an estate plan consists of various legal documents, including:
- Drafting a Will
- Consider inheritance tax and other tax implications
- Consider insurance policies and/or investments
- Consider a Lasting Power of Attorney
- Keeping estate under review
The specific components of an estate plan depend on your individual circumstances and goals.
What is a Will?
A Will is a legal document that outlines how a person’s assets and possessions will be distributed after their death. It is one of the fundamental components of an estate plan.
A Will enables you to appoint an executor(s) to administer your estate, choose your beneficiaries, establish any gifts you would like to make, establish guardians for any children, establish funeral wishes, as well as create trusts. Moreover, it allows you to express your intention and protect your assets including any property, jewellery, and business to name a few.
Once prepared, a Will can always be revised and updated should an individual’s wishes and circumstances change. We usually recommend a Will review after five years.
What happens if you do not have a Will in place?
Without a proper Will in place, an individual’s estate is exposed to the risks of the default rules of intestacy. Through the rules of intestacy surviving spouses/civil partners or blood relatives shall inherit an individual’s estate upon their death.
The intestacy rules provide no provisions for unmarried partners or cohabiters. Therefore, the rules of intestacy may differ from an individual’s actual intention for their estate.
How can we help?
Sainabou Touray is a Trainee Solicitor in our Wills and Probate team.
At Nelsons, we can make estate planning a little less daunting by providing advice, preparing and tailoring your Will according to your wishes as well as ensuring your Will is executed properly.
For advice or further details of the services we provide, please contact Sainabou or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.
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