DIY estate planning: what you can do before calling a financial adviser

What is is estate planning?

Estate planning is the process of working out how you want the things you own (your assets) to be passed on after your death.

The point of estate planning is to try to pass on as much as possible to your loved ones without paying more inheritance tax (IHT) than you need to.

It usually takes a bit of foresight because, for some financial gifts to be free of IHT, you need to survive for at least seven years after you give them.

There may also be some special financial products involved in estate planning, such as setting up trusts to ‘ringfence’ money in someone else’s name, taking money out of your estate for tax purposes.

For these reasons, many people use a qualified financial adviser to guide their estate planning. Unbiased can help you find an FCA-regulated adviser.

But, before you speak to one, there are some things you can do yourself to make the whole process easier, meaning you’ll make the most of your adviser’s time, and your money when you pay for advice.

List your assets

First, you should tally up the assets you have to get a clearer picture of the value of your estate.

Your estate includes all the things you own, as well as liabilities such as debts.

As you’re adding up what you have, include property, savings, investments, valuables such as cars, art, antiques and jewellery, and any digital assets you may hold such as cryptocurrencies.

Life insurance policies will only form part of your estate for tax purposes if they are not ‘written in trust’ for your beneficiaries. Check if this is the case and consider putting any policies in trust if not. 

Pensions do not currently form part of your estate, but this will change from April 2027, so you should include the value of your pensions in your calculations.

You could also list your liabilities, such as an outstanding mortgage balance, personal loans, credit cards or other debts.

Having this information in one place could help you understand what your IHT liability may be and how to reduce it. It will also help whoever will handle your estate after you’re gone.

Track down forgotten pensions

It’s common to end up with several small pension pots if you’ve changed jobs a few times during your career.

It can be easy to lose track of these pots. In fact, there’s more than £31 billion languishing in unclaimed, inactive or lost pensions in the UK, with an average value of £9,470 per pot.

Why not round up your old pensions and consider consolidating them? This could reduce the admin burden and even mean you pay lower fees once your pot grows above a certain level (depending on your pension provider’s charging structure).

Contact your previous employer’s HR or payroll team to trace old pensions, or use the government’s free pension tracing service.

Be sure to check that you won’t lose any valuable pension benefits by consolidating old pensions.

Write or update your will

An important part of estate planning is setting out what you want to happen to your assets when you die, and who you would like to care for any dependents.

The best way to make your wishes clear is by making a will.

You can do this yourself using a free online template, but it’s probably worthwhile paying a solicitor or will-writing service to draw one up for you, especially if your finances are complex.

For a will to be valid, it’s important to use the right legal wording and have your will properly signed and witnessed. 

An initiative called Free Wills Month runs twice a year in March and October and gives people aged 55 and above the chance to have a simple will written or updated by a participating solicitor.

It's good practice to review your will every two or three years or when your circumstances change, such as when you marry, divorce, have children or buy a home.

You may also want to consider whether your named executors are still the right people for the job.

Just over half of UK adults don’t have a will. If you die without one, your estate will be distributed according to intestacy rules, which may not align with your wishes.

For instance, if you live with a partner but are unmarried, they would not automatically inherit if you died – your parents and then your siblings would get priority.

Your loved ones might also be hit with an inheritance tax bill, which could have been avoided if you had a Will.   

Check beneficiary nominations

When you set up a pension, life insurance policy, or death-in-service benefits from your employer, you should be asked to nominate a named beneficiary who will receive the payout or inherit your unspent pension savings when you die.

Check that you have named beneficiaries on your policies or pensions, and review them periodically.

For instance, you may still have an ex-partner listed as a beneficiary, or you may have had children since you set up the pension.

It’s usually easy to update beneficiaries by submitting a form (sometimes called an ‘expression of wish’ form).

If you trace old pensions using the tips above, update the beneficiaries on these pots too.

Talk to your family

Discussing your plans for your assets with family doesn’t have to be awkward. Getting them on board with your wishes now could save them stress down the line.

Let your loved ones know your intentions, and make sure they know where to find important paperwork.

If you want to name particular people as your executors (meaning the ones who handle your estate after your death and make sure your assets go to the right people), ask them in advance if they are happy to take on this role when the time comes.

Talk about who you would like to be the trustees or guardians for children or other dependents, as well as any funeral preferences you have.

If you have a complex estate or a blended family, getting all this out in the open early can prevent confusion and conflict later on.

Get expert estate planning and inheritance advice

Once you’ve laid the groundwork, you should be ready to speak to a qualified financial adviser to get your estate planning sorted.

Unbiased can match you with an expert financial adviser who can help.