Considering the rising interest in inheritance tax, we wanted to give our readers a little insight into estate planning. In this article, we tackle the following question – what does an estate planner do? We offer a short overview of what estate planning is along with information on the role estate planners perform for their clients. If you are looking to reduce tax on your estate, or a looking to preserve your assets, read this article today.
What is estate planning?
Sounds grand, doesn’t it? Estate planning is simply the process of arranging your financial affairs so that your assets are distributed according to your wishes after your death. This includes everything from creating a will or trust to planning for incapacity or disability.
Careful estate planning could help you avoid legal and financial problems that arise without a clear plan.
What you will learn
- What estate planning actually does and why it matters
- The five key areas estate planners focus on
- How Wills and trusts can protect your assets
- Ways to reduce or avoid inheritance tax entriely
- The importance of planning for incapacity and disability
- How estate planners help navigate complex legal matters
What does an estate planner do?
An estate planner is a financial adviser experienced in the art of helping you reduce tax, and protect assets and wealth.
In this article, we focus on 5 key areas:
- Creating wills and trusts to distribute assets after your death
- Minimising taxes and other fees to preserve the value of your estate
- Appointing guardians for children or dependents
- Planning for incapacity or disability – powers of attorney
- Navigating complex legal and financial issues
Read the rest of this article to find out more.
Creating wills and trusts
One of the primary functions of an estate planner is to help you create a will or trust that outlines how your assets will be distributed after your death. This involves identifying your beneficiaries, assigning assets to them, and specifying any conditions or limitations on their inheritance.
Wills are legal documents that outline your final wishes and provide instructions for the distribution of your assets. Trusts are a more complex legal instrument that offers additional benefits, such as asset protection and tax savings. For many, using trusts is a legal way to reduce or avoid inheritance tax. An estate planner’s job is to help you determine which option is best for you.
Related reading
Looking for more articles on the topic of estate planning and inheritance tax? Read these articles today:
- Could equity release be used to reduce your inheritance tax bill?
- Can I gift my home to my children to avoid inheritance tax?
- Seven ways to preserve your wealth and property
- Do I need an inheritance tax adviser
In the next section of our article, ‘what does an estate planer do?’ we focus on how they can help reduce taxes, guide you through complex legal matters, and assist in the process of setting Powers of Attorney.
Minimising taxes and preserving the value of your estate
Minimising taxes and other fees that could diminish the value of your estate is another key role of the estate planner. Inheritance tax (IHT) could be a significant burden on your heirs so structuring your assets in a way that reduces your tax liability is important.
There are a variety of strategies that an estate planner could use to mitigate IHT, such as creating trusts or making lifetime gifts to your beneficiaries. By carefully planning your estate, you can ensure that your assets are preserved for your loved ones.
Appointing guardians for children or dependents
It is essential to appoint a guardian who would care for any minor children or dependents you have in the event of your death or incapacity. An estate planner could help you select a suitable guardian and create a plan that ensured that your children were cared and provided for in your absence.
Planning for incapacity or disability – powers of attorney
Estate planning is not just about what happens after your death. It also involves planning for incapacity or disability. An estate planner could help you create powers of attorney and healthcare directives that designate someone to make decisions on your behalf if you were unable to do so.
A power of attorney grants someone of your choosing the authority to manage your financial affairs, while healthcare directives specify your medical wishes and designate a healthcare proxy to make decisions about your care.
By planning, you can ensure that your wishes are respected and that your affairs are managed according to your preferences.
Navigating complex legal and financial issues
Like offering pension or inheritance tax advice, estate planning can be a complex process that involves a variety of legal and financial considerations.
An estate planner could help you navigate these issues and ensure that your estate plan is effective and legally sound. They could also provide advice on a range of related issues, such as retirement planning and business succession.
Summary – what does an estate planner do?
In conclusion, estate planners play a crucial role in helping you prepare for the future. They could help you create a will or trust, minimise taxes and other fees, appoint guardians for your children, plan for incapacity or disability, and navigate complex legal and financial issues.
By working with an estate planner, you could ensure that your assets were distributed according to your wishes and that your loved ones were provided for in the event of your death or incapacity.
Factors to consider
- Whether you need a will or trust for your specific situation
- The current value of your estate and potential tax implications
- Who would care for your dependents in your absence
- Whether you need powers of attorney in place
- If your estate planning needs specialist legal or financial expertise
- The timing of setting up your estate planning arrangements
Related services
After reading this article, you feel you benefit from some estate planning or inheritance tax advice, find out more about our services by clicking the links below:
At Sterling & Law, everything starts with a complimentary no-obligation consultation with an experienced adviser. Rest assured with Sterling & Law, you will be in safe hands.
Article FAQs
How much does it cost to work with an estate planner?
Estate planners typically structure their fees in two parts. First, there’s usually an upfront fee for creating your estate plan, which includes initial consultations, document preparation, and implementation of strategies. Then, if they’re managing ongoing trusts or investment vehicles, they may charge an annual fee based on the assets under management.
How often should I review my estate plan?
It’s recommended to review your estate plan every 3-5 years, or whenever significant life changes occur. These include marriage, divorce, births, deaths, property purchase/sale, business ownership changes, or substantial inheritance received. For example, if you’ve just bought a second property or started a business, your existing trust structure might need updating to remain tax-efficient.
Can I do estate planning myself or do I need a professional?
While basic WIlls can be created using DIY kits, complex estates require professional guidance to avoid costly financial mistakes. For instance, if you own a business, have overseas assets, or want to set up trusts for tax efficiency, professional help is crucial. Remember, a £2,000 professional fee could save your estate £100,000+ in taxes.
What’s the difference between an estate planner and a regular financial adviser?
Great question. A financial adviser can perform the same role as an estate planner providing they have the necessary experience and qualifications. As estate planners have a very specific role, they can’t offer the same services as financial advisers.
How long does the estate planning process typically take?
A basic estate plan can be completed in 4-6 weeks. More complex arrangements involving trusts or business succession planning typically take 3-6 months. The timeline often depends on gathering necessary documentation, making key decisions (like choosing trustees or guardians), and implementing various structures. Regular reviews then ensure your plan remains current.
