What estate planning skeletons could be hiding in your cupboard?

With Halloween fast approaching, it’s a fitting time to think about the estate planning skeletons that could be hiding in your cupboard.

Recent research from Will Aid found that 67% of UK adults either don’t have a will or admit the one they do have is out of date. Of those with an existing will, 10% said it no longer reflected their circumstances or wishes.

Your will is only one part of the picture, too, as old relationships, forgotten accounts, or changes to the value of your estate could all cause problems if they no longer match what you actually want.

So, continue reading to discover five of the estate planning skeletons that may be worth bringing back into the light.

1. Your will no longer reflects your wishes

Writing a will can feel like one of those tasks you complete once and then forget about, but a lot can change over the course of 5 or 10 years.

Indeed, you might have moved home, welcomed new children or grandchildren into the family, or simply changed your mind about who you want to inherit your wealth.

Several major life events can also affect how your will works. Marriage is especially important to consider because, in England and Wales, getting married will typically invalidate a will you made beforehand.

So, if you’ve left your will sitting untouched for years, it might be worth dusting it off and checking that it still does what you expect.

2. An old relationship could still be affecting your plans

Relationships can shift naturally as you progress through life, but your estate planning documents may not change with them.

If you divorce in England and Wales, your former spouse is generally treated as though they passed away before you for the purposes of gifts and certain appointments made in your will, unless it states otherwise.

However, this doesn’t necessarily mean the rest of the will automatically produces the outcome you want. You may have new beneficiaries to consider, a new partner, or property that is now owned in a different way.

Blended families can make this especially important, as you may want to ensure a current partner is financially secure while also protecting an inheritance for children from an earlier relationship.

Leaving outdated arrangements in place could make an already challenging situation harder for your loved ones to deal with.

3. Forgotten assets could make your estate harder to untangle

There’s a strong chance you have a fairly good idea of your main assets. However, you may have forgotten about an old savings account, a pension from an employer you left 20 years ago, or an investment you haven’t looked at in some time.

As your financial situation becomes more complicated, it can be surprisingly easy to lose track. Even smaller assets could create extra work for your executors if no one knows they exist or where you keep the paperwork. 

As such, it might help to maintain a simple, up-to-date record of your important financial accounts and assets.

For instance, you could record which organisations you hold money with, where you store essential documents, and who your executors may need to contact.

You should also make sure someone you trust knows where you store your will, as even the perfect document isn’t much use if no one can find it.

4. Your pension beneficiary nominations may be out of date

You can typically complete an “expression of wish” form when it comes to your retirement fund, which tells your pension provider or trustees who you’d like to receive your pot when you pass away.

While pension providers often take these wishes into account, they can retain discretion over who ultimately receives the benefits.

So, if you filled in a beneficiary form years ago and haven’t looked at it since, now could be the ideal time to check it. 

A marriage, divorce, or the birth of a child could mean your existing wishes are no longer appropriate. 

This may become even more important from 6 April 2027, when most unused pension funds and death benefits are due to form part of your estate for Inheritance Tax (IHT) purposes.

The rules are changing, but the need to ensure your nominations still reflect your wishes is just as important.

5. You may have forgotten to keep records of gifts you made

Giving wealth to loved ones during your lifetime can form an important part of your estate plan. However, if you regularly give money or assets away, keeping accurate records can be just as vital as making the gifts themselves.

Any gifts you make during the seven years before your passing could need to be considered when your estate is assessed for IHT. 

As such, your executors may need to establish what you gave away, who received it, and how much it was worth at the time.

If you’ve been gifting for several years without keeping clear records, piecing this information together could prove difficult for your loved ones.

Meanwhile, keeping a straightforward record as you go could make their job far easier.

It could also help you and your financial planner keep track of how gifting fits into your wider estate plan and whether your arrangements continue to reflect what you want your wealth to achieve. 

Get in touch

At Hansford Bell, we can help you review your wider financial position and consider how your pensions, investments, savings, and gifting plans all fit into your estate plan. We can then help you understand whether any current arrangements still suit your long-term plans.

So, to find out how we could help you work towards financial independence, please call us on 01822 617 960, email info@hansfordbell.co.uk, or fill in our online contact form, and we’ll be in touch.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts. 

The Financial Conduct Authority does not regulate tax planning, estate planning, or will writing.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.