What is estate planning?

Estate planning lets you create a framework for the orderly distribution of your assets in a way that reflects your priorities, values and wishes, to be carried out when you pass away.. It involves drafting a will so that you can set out your decisions about asset distribution, your preferred guardians for minor children, who should look after your pets, and other personal wishes. It includes not only financial assets such as bank accounts, property and investments, but also personal belongings that have sentimental value.

Drafting a will 

It is a common misconception that you only need a will if you own large assets like property, vehicles and investments, or if you have children. In fact, drafting a will is something every person (over the age of 16) should do, if they have any form of personal belongings.

The simplest will is often the best will, so your estate planning does not have to be time consuming or cumbersome. The quickest and easiest way of drafting a will and making sure it is valid and kept safe, could be to enlist the help of professional estate planning services.

Estate planning services

Ensure your affairs are in order and get reliable advice to navigate the complexities of estate law by making use of professional estate planning services. This does not have to cost the earth. Drafting a will and storing it in a safe location are free. Some estate planning services also offer the option of protecting your estate – and therefore your heirs and beneficiaries – by way of cost-effective indemnity plans that cover unforeseen costs associated with passing away.

Unforeseen costs

When you pass away, the costs can be significant, including expenses like burial or cremation, outstanding debt, and estate administration. By being circumspect in your estate planning, you can cover unforeseen costs,minimise the impact of inheritance tax and make sure your loved ones are not burdened or left out of pocket one day.

Inheritance tax

Inheritance tax, also known as estate duty, can significantly impact the value of your estate that is left to your heirs and beneficiaries. Estate planning strategies such as establishing trusts, making use of tax-free allowances, and gifting assets during your lifetime can help mitigate the effects of inheritance tax on your estate.

Estate administration

Estate administration is the process of settling your affairs after you pass away, including asset distribution, payment of outstanding debts and taxes, and obtaining the necessary legal approvals to wind-up your estate.

Anecdotal evidence will tell you that estate administration can take a long time. However, proper estate planning could streamline the process, avoid delays that leave your estate in limbo, and ensure that your wishes are carried out within a reasonable timeframe. That’s why estate planning is a personal finance power tool.

By drafting a will, thinking about your asset distribution in advance so that you can minimise inheritance tax, and ensuring you cover unforeseen costs, you can expedite the estate administration process and rest assured that your loved ones will be looked after, and your wishes carried out.