Why Estate Planning Isn’t Just for the Wealthy

When people hear the phrase “estate planning” they often picture large country houses, acres of land and a butler who polishes the silver. The reality is much more down-to-earth.

Estate planning is simply about making sure your money, property and possessions go where you want them to when you’re no longer around. Whether you own a detached house in Brookmans Park, a flat in Potters Bar or something in between, you have an estate worth planning for.

As an Independent Financial Planner working locally, I help people organise their finances so they can enjoy life now while also protecting their families in the future. Estate planning is really about peace of mind, avoiding unnecessary tax, and preventing family disputes.

What Is Estate Planning?

Estate planning is the process of arranging your financial affairs so they are passed on in the way you want. This includes your home, savings, pensions, investments and even those sentimental possessions you’d like to keep in the family.

In the UK, an estate plan often covers:

• Writing or updating a will

• Understanding and managing inheritance tax

• Deciding how pensions and retirement savings will be passed on

• Setting up powers of attorney for health and financial decisions

• Reviewing insurance and protection

• Making sure assets go to the right people without unnecessary delays

  
  

Why You Shouldn’t Ignore It

A few common myths stop people from planning:

• “I don’t have much, so I don’t need a plan.” Even a modest estate can cause stress if there are no instructions in place.

• “My family will sort it out.” Possibly, but it can take months and may cost thousands in legal fees.

• “I’m too young for this.” Estate planning isn’t just about death. It’s also about protecting you and your finances if you can’t make decisions yourself.

  
  

Step 1: Write a Will

A will is the foundation of any estate plan. Without one, the rules of intestacy decide who inherits, which may not be what you want.

A good will should:

• Name an executor you trust

• Be updated when life changes, such as marriage, divorce or buying property

• Be professionally drafted to avoid mistakes

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Locally, I work with trusted will writers in Potters Bar who make the process simple and affordable.

Step 2: Understand Inheritance Tax (IHT)

Inheritance tax is one of those areas people often leave until it’s too late. With some planning, you can reduce or even eliminate it.

At the moment:

• The nil-rate band is £325,000 per person

• There’s an extra £175,000 residence allowance if you pass your home to children or grandchildren (but this is tapered for estates over £2million).

• Anything above these allowances is taxed at 40%

  
  

Planning can include making use of gifting allowances, placing assets in trusts and ensuring both you and your spouse make full use of your allowances.

The upcoming changes to inheritance tax (IHT) from April 2027 will significantly reshape retirement and legacy strategies for many UK individuals. Currently, unused defined contribution pensions typically fall outside the taxable estate, allowing beneficiaries to inherit them free of IHT. However, from 6 April 2027, these pension pots will be included in the estate for IHT purposes, potentially attracting a 40% tax charge.

This reform is expected to affect around 10,500 estates that previously wouldn’t have paid IHT, and increase the tax burden for another 38,500. While assets passed to a spouse or civil partner remain exempt, the change will particularly impact those with substantial pension savings who had planned to preserve these funds for their heirs. Traditional strategies - like prioritising other assets and leaving pensions untouched - may now lead to unintended tax consequences. It’s vital for clients to reassess their drawdown plans, consider gifting strategies, and explore trust structures where appropriate.

Step 3: Put Powers of Attorney in Place

A will deals with what happens after you pass away, but what if you’re alive and unable to make decisions?

Lasting Powers of Attorney (LPA) allow someone you trust to act on your behalf. There are two types:

1. Property and Financial Affairs LPA – covers managing money and property

2. Health and Welfare LPA – covers decisions about medical care and living arrangements

   
   

Without these, your family may need to apply to the court, which is costly and time-consuming.

Step 4: Consider Life Insurance

Life insurance can provide your family with a lump sum that is quick to access and, when set up correctly, can be kept outside your estate for inheritance tax purposes.

Step 5: Review Regularly

Life changes. So should your estate plan.Review it:

• Every few years

• After major events like marriage, divorce, moving home or having children

  
  

Why This Matters Locally

In Brookmans Park and Potters Bar, rising property values mean many homeowners are sitting on estates large enough to trigger inheritance tax without realising it. Planning ahead can make a big difference in how much of your estate actually reaches your loved ones.

Bringing It All Together

Estate planning works best when it’s part of a bigger financial picture. That includes:

• Financial planning for your life goals

• Retirement planning so you can enjoy the years after work

• Pension planning to make the most of your savings

• Financial advice that keeps your money working for you

  
  

When these areas work together, you can enjoy life knowing you’ve taken care of your future and your family’s future.