Estate Planning 101: England & Wales

Most people assume estate planning is something only the wealthy need to worry about. In reality, if you own anything or care about anyone, estate planning matters — and it's simpler than you think.

Here's everything you need to know to get started.

*This guide covers estate planning in England and Wales. Scottish law differs in some key areas.*

What Is Estate Planning?

Estate planning means deciding what happens to your money, property, and possessions before and after you die.

It's not just about writing a will — though that's an important part of it. GOV.UK explains why making a will is important and the inheritance tax rules in England and Wales. A complete estate plan also covers what happens if you lose the ability to make decisions for yourself, who looks after your children, how your digital accounts are handled, and whether your family faces an unnecessary tax bill. Learn more about inheritance tax rules explained and how mirror wills for couples can simplify estate planning.

Over 60% of UK adults have no estate planning in place whatsoever. For most of them, it's not a deliberate choice — it's simply something they've never got round to. The result is that the law makes those decisions for them, often in ways they wouldn't have chosen.

What Counts as Your "Estate"?

Your estate is everything you own at the time of your death. This typically includes:

• Your home and any other property
• Savings accounts and cash
• Investments and stocks and shares ISAs
• Personal possessions — cars, jewellery, and other items of value
• Business interests
• Digital assets — online accounts, cryptocurrency, digital photo libraries

One important note: pensions will be brought into your estate from 6 April 2026, which is a significant change that makes estate planning more important than ever for anyone with a pension pot.

Why Does Estate Planning Matter?

Without a plan in place, several things can go wrong:

Your assets go to the wrong people. Without a will, the Rules of Intestacy decide who inherits — and they may not reflect your wishes. Unmarried partners, stepchildren, and close friends receive nothing under intestacy rules, regardless of your relationship with them. Find out what happens if you die without a will.

Your family can't access your accounts. If you lose mental capacity without a Lasting Power of Attorney in place, your loved ones — including your spouse — may be unable to manage your finances or make healthcare decisions on your behalf without going to court.

Your estate pays more tax than necessary. Inheritance Tax receipts have risen sharply, with the Treasury collecting £2.22 billion in IHT in the first quarter of 2025 alone — a 6% increase on the same period the previous year. With tax thresholds frozen until at least 2028, rising house prices and asset values mean more estates will face tax bills.

Probate takes longer. In 2026, the probate process takes between 9 and 12 months from start to finish. A clear, well-drafted estate plan makes this process significantly smoother for your executors and family.

The Core Building Blocks of an Estate Plan

You don't need to do everything at once. But understanding the key components helps you prioritise what matters most for your situation.

1. A Will

Your will is the foundation of any estate plan. It sets out:

• Who inherits your assets, and in what proportions
• Who you appoint as executor to carry out your wishes
• Who should care for any children under 18
• Any specific gifts — items or cash sums — to particular people
• Your funeral wishes (not legally binding, but helpful guidance)

As of 2025, only 41% of UK adults have a will — up from 38% the previous year, but still leaving the majority of the population unprotected. Learn how to make a will online.

2. A Lasting Power of Attorney (LPA)

A will only takes effect when you die. An LPA protects you while you're still alive — specifically if you lose the mental capacity to make decisions for yourself due to illness, accident, or dementia.

There are two types:

• Property and Financial Affairs LPA — covers bank accounts, bills, property, and investments
• Health and Welfare LPA — covers medical treatment, care arrangements, and daily decisions

Without an LPA, even your closest family members cannot legally access your accounts or make healthcare decisions on your behalf. They would need to apply to the Court of Protection — a process that is both costly and time-consuming. Find out how much does an LPA cost.

3. Inheritance Tax Planning

The IHT nil-rate band stands at £325,000, with an additional residence nil-rate band of £175,000 — but both are frozen despite rising property values, pulling more middle-class families into the IHT net.

Basic planning steps include:

• Making use of annual gifting allowances (£3,000 per year, per person)
• Leaving assets to a spouse or civil partner (exempt from IHT)
• Leaving at least 10% of your estate to charity (reduces IHT rate to 36%)
• Considering life insurance written in trust to cover any IHT liability

For estates likely to exceed the thresholds, professional financial advice is worthwhile.

4. Digital Assets

Around 39% of people now include digital instructions in their wills or Letters of Wishes. Your estate plan should account for:

• Online banking and investment accounts
• Email and social media profiles
• Cryptocurrency wallets
• Subscription services
• Digital photo libraries and sentimental content

Keep a secure, up-to-date record of your digital accounts and how to access them, and share this with your executor.

5. Guardianship for Children

If you have children under 18, a will is the only formal way to nominate who should care for them if both parents die. Without this, the courts decide. Even if the outcome might be the same person you'd have chosen, the process is stressful, delayed, and uncertain for everyone involved.

When Should You Start Estate Planning?

The honest answer: now. It is never too late to begin, but the sooner you start, the more time you have to ensure all your assets are secured and distributed according to your preferences.

That said, certain life events make estate planning especially urgent:

• Getting married or entering a civil partnership (marriage automatically revokes an existing will)
• Having children
• Buying a home
• Starting a business
• Receiving an inheritance
• Approaching retirement
• A diagnosis of serious illness

What Does Estate Planning Cost?

It doesn't have to be expensive. For most people in England and Wales, the two most important documents are a will and an LPA — and both can be set up online at a fraction of solicitor fees. Find out how much does a will cost.

For most people with straightforward circumstances, an online service covers everything they need — clearly, legally, and affordably.

Estate Planning vs Making a Will — What's the Difference?

A will is one part of an estate plan. Estate planning is the broader process that includes your will, LPAs, tax planning, guardianship decisions, and digital asset instructions.

Think of it this way:

• A will answers: "What happens to my assets when I die?"
• An LPA answers: "Who makes decisions for me if I can't?"
• IHT planning answers: "How do I protect my family from an unnecessary tax bill?"
• Estate planning answers all three — and more.

A Simple Estate Planning Checklist

Use this as your starting point:

• ☐ Make or update your will
• ☐ Set up a Property and Financial Affairs LPA
• ☐ Set up a Health and Welfare LPA
• ☐ Check how your property is owned (joint tenants vs tenants in common)
• ☐ Review your pension nominations (who receives your pension on death)
• ☐ Check any life insurance is written in trust
• ☐ Create a digital assets inventory
• ☐ Tell your executor where your documents are stored
• ☐ Review everything after any major life event

Where to Start

For most people, the two highest-priority steps are a will and an LPA. Both can be completed online, at home, in a matter of hours — and both provide immediate, meaningful protection for you and your family.

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*This article is for informational purposes only and does not constitute legal advice. This guide covers estate planning in England and Wales. Scottish law differs in some key areas. For complex estates or significant Inheritance Tax concerns, we recommend seeking independent legal and financial guidance.*

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