Estate Planning

Estate Planning

What is estate planning?

Estate planning ensures the right amount of money goes to the right people at the right time when you die.

Estate Planning is often pushed to the bottom of the ‘to-do list’, along with preparing a will. This is completely understandable and explains why inheritance tax planning and estate planning are often put off. However, accidents and unexpected illnesses can and do happen, as the Covid-19 pandemic has proven beyond doubt. As such, ensuring your financial affairs are in order can be a huge source of solace should the worst happen.

It is important to consider the ‘who, what, when and how’ of estate planning. Acumen can help you to optimise the estate and inheritance tax (IHT) planning aspects of your will. We can advise on the various tax implications and suggest ways to improve the role of your pension scheme. We can also provide advice about Lasting Powers of Attorney, as well as arranging investments and life assurances to reduce your IHT tax bill.

Inheritance tax rates and reliefs

Inheritance tax is a tax on your estate, including your money, possessions and property, after you have died. If the value of your estate is below £325,000 or you leave everything beyond that threshold to your spouse, civil partner, a charity or a community amateur sports club, it is unlikely you will have to pay any IHT. The standard IHT rate for any part of your estate beyond the nil-rate band is taxable at a rate of 40%.

If you intend to leave your home to your children (including adopted, foster or stepchildren) or grandchildren, your threshold can increase to £500,000. If you are married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die. If the estate’s value is below the threshold, you will still be required to report it to HMRC.

The importance of inheritance planning

Estate planning or inheritance planning centres around growing and organising your wealth efficiently. It is an effective exercise in forward planning that ensures your loved ones receive the maximum amount of financial support, with the least amount of complication, when you die. Estate planning can minimise your tax liabilities and provide peace of mind that your dependents will be financially stable long after you have passed.

An integral element of inheritance planning is ensuring you have a will. If you die without drafting a valid and up-to-date will, the laws of intestacy will apply. These differ depending on your location, but often lead to the unexpected distribution of your estate as the state decides your beneficiaries. This process can lead to unnecessary stress and tax burdens for grieving families. A will allows you to specify who receives what.

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Estate planning options

Achieving your estate planning goals and minimising the impact of IHT requires careful planning. First and foremost, you will need to arrange that all-important will, as well as any number of the following actions:


Trusts are not only created to save tax, but are often set up for estate-planning purposes too. For example, you might set up a trust to set aside funds to meet the costs of educating your grandchildren.

Lifetime gifts

Gifts made in your lifetime that exceed annual exemptions and other exemptions escape IHT if they are made more than seven years before you die. You can also gift up to £250 to as many individuals as you like tax-free.

Allowances, reliefs and exemptions

Take advantage of the annual IHT exemptions, particularly the normal expenditure gift rule. If you own a business or a farm, you need to ensure that you use the appropriate reliefs to the full.

Investments with Business Property Relief

Acumen can advise you on specialised, quality investments that can escape Inheritance Tax after only 2 years and in many cases, we can accelerate that so that investments fall out of your estate after as little as a few weeks. Using investments that qualify for Business Property Relief can be a highly effective way of getting more of your wealth into the hands of your loved ones after you die.

Pension planning

A pension can provide the certainty of income that allows you to make lifetime gifts and represents an IHT-free fund. Some pension plans can even be passed down from generation to generation, free of IHT.

Life assurance

For married couples and civil partners with larger estates, the tax bill usually arises on second death. Life assurance can help to minimise the size of your estate and maximise your annual exemptions.

Lasting power of attorney (LPA)

Although not strictly part of estate planning, a lasting power of attorney (LPA) allows you to choose a trusted confidante, known as the Attorney, to make important decisions on your behalf.

Contact Acumen today

For tailor-made inheritance planning advice, please contact Acumen today by calling 0151 520 4353 or email us at