Estate Planning FAQs

Estate planning encompasses the process of arranging your personal affairs whatever way you see fit, both before and after your death. Here, we answer some of the most frequently asked questions relating to estate planning. 

If you have any further questions, or if you want to speak to an expert about your specific circumstances, contact a member of the Navigate Wealth team on 0345 340 9690 or use our submission form.

What is an estate?

Your estate is the total of everything you own, from large assets including your home to your small personal possessions. It is also known as your net worth.

What happens if I die without a will?

If you die without creating a will, your estate is automatically passed on to the appropriate person according to the Laws of Intestacy. There are a number of ways to ensure your estate is distributed in line with your wishes after your death, but having the right estate plan in place will also help ensure the correct beneficiaries inherit your estate. It can also help you reduce the amount paid in taxes and legal fees.

What is a lasting power of attorney (LPA)?

An LPA is a legal document allowing you (the donor) to appoint one or more people (attorneys) to make decisions on your behalf. 

This document gives you more control over what happens to you in the event of an accident or illness and are unable to make your own decisions. In order to make an LPA, you must be over the age of 18 and of sound mind. 

What are the types of LPA?

There are two types of LPA - health and welfare, and property and financial. A health and welfare LPA acts on your behalf if you are unable to communicate or have become mentally incapacitated. It covers aspects of your care, including your medical care and where you live. 

A property and financial affairs LPA handles your money and property, and can be used when you still have full mental capacity. 

It is possible to set up just one type of LPA, but in order to be fully protected, it is recommended that you have both kinds.

What happens if I do not have an LPA?

If you become unable to make decisions for yourself and you do not have an LPA, then the only way someone can take control of your property and financial affairs, or health and welfare, will be to go through the Court of Protection. 

This could make it difficult for your wishes to be carried out, should you lose the capacity to express them for yourself. 

Can a beneficiary of my estate also be an executor?

Yes, as long as they are over the age of 18.

How many attorneys can I have?

It is possible to appoint more than one attorney. We recommend that you have at least two in place should anything happen to one of your attorneys. You may have one attorney for your health and welfare and another for your property and financial affairs. 

What is a beneficiary?

A beneficiary is someone who receives something in a will. This could be a sum of money, property, land or a particular item. A beneficiary can be a spouse, relative, friend or even a charity or organisation.

What is inheritance tax?

Inheritance tax is calculated based on the value of the estate - the property, money and possessions - of a person who has died. There is very often no inheritance tax to pay if: 

  • The value of your estate is below the £325,000 threshold 
  • You leave all your assets to a spouse or civil partner, a charity or a community amateur sports club 

What is a trust?

A trust is a legal arrangement by which assets are held for a beneficiary on behalf of a trustee. The trustee or beneficiary can be one or more individuals or a company and the trustee and beneficiary can be the same person or company.

When would I use a trust?

You may want to use a trust in the following circumstances: 

  • If a beneficiary is not able to manage the assets you want them to inherit at the time you set up the trust, for example - a dependent child
  • To help your beneficiaries pay inheritance tax, to cover the amount to be paid
  • To set aside money with yourself as the beneficiary, ensuring that your money is used to look after you in the event that you are unable to look after yourself

Are there different types of trust?

There is a wide range of trusts available, and the type you choose depends on what you want it to do. Setting up a basic trust can be quite simple, although others are much more complex, so expert help is recommended. For more information, see our dedicated page.

Further questions?

If you have more questions about estate planning, or if you want to speak to an expert about your specific circumstances, contact a member of the Navigate Wealth team on 0345 340 9690 or use our submission form.

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