How to avoid the common pitfalls of Estate Planning

Estate planning is one of the most important steps you can take to protect your wealth and provide for your loved ones. Yet, without a clear grasp of the basics, many people still fall into avoidable traps that can lead to disputes, unexpected tax liabilities or the erosion of assets over time.

At Price Slater Gawne, we’re committed to helping clients avoid these common pitfalls through thoughtful planning and regular professional guidance that ensures your strategy remains optimal throughout your lifetime.

Here, we outline five key principles to help you get your estate planning off to the strongest possible start:

Start the conversations early

Life is unpredictable – and delaying these key discussions can mean missing out on opportunities to maximise family wealth, as well as greater costs further down the line. One of the most common mistakes when it comes to estate planning is simply putting it off in the first place.

It’s always advisable to start conversations with those who will be impacted by your estate plan as early as possible, particularly close family members, business partners and any chosen executors or trustees.

This way, you’ll also be in the best possible position to navigate Inheritance Tax (IHT) penalties efficiently – for example, making use of the ‘seven-year rule’, which exempts gifts from IHT if you live for seven years after the gift has been made.

Clear communication with those closest to you in the here and now also reduces the likelihood of future misunderstandings or conflicts once you pass away.

Start building on solid foundations

Effective estate planning begins with an understanding of the basics: what do you own, how is it being held and how do you want it to be passed on?

Once you have a grasp of your current situation, you’ll need to ensure your wishes are codified in the relevant documentation. The to-do list often includes:

• Clarifying ownership structures – e.g. personal, joint, corporate, Trust-held assets
• Reviewing any existing Wills or Trust arrangements
• Making sure Powers of Attorney are in place
• Assessing any existing liabilities or business interests/obligations

All too often, we find that clients’ initial plans are built around assumptions – whether that’s regarding asset values, relationships or legal structures – and so a solid, well-documented foundation prevents your estate plan from crashing down once when it matters most.

Don’t gift what you still might need

The desire to help family members during your lifetime is natural and admirable, but giving away too much too soon can place your own financial security at risk.

Whilst you may feel you already have all you need right now, you might still have to fund your lifestyle for decades – and this could include covering future care needs or managing unforeseen events. Indeed, we’ve seen clients gift large sums or assets without considering how it might affect their ability to maintain independence later in life, leading to preventable difficulties.

A good estate plan balances generosity with common-sense caution – and so it’s crucial that you work with a trusted advisor to ensure any gifts are sustainable, tax efficient and aren’t made at the expense of your long-term wellbeing.

Undertake regular reviews with professional advisers

Estate planning isn’t a ‘set it and forget it’ process. Lives, laws and relationships change, and so it’s vital your strategy continues to make sense for the life you have now, not where you were years ago.

Ideally, you should be undertaking regular reviews with qualified wealth planning professionals at least every two to three years – and/or following significant life events such as new children, marriage/divorce and employment changes – to confirm your plan remains up to date and aligned with your goals.

Understand your taxes, allowances and reliefs

Estate planning and tax planning go hand in hand; without a proper understanding of the tax landscape and the exemptions available, even the most well-intentioned plan can saddle your beneficiaries with a larger tax bill than necessary.

There are a whole host of tax planning tools and reliefs – such as the Residence Nil Rate Band, annual gifting exemptions, and business or agricultural property reliefs (BPR/APR) – that can help to structure your estate more efficiently.

However, many tax allowances are time sensitive or require specific structuring to be effective – which is why consulting with an expert on your specific situation is the best way to make full use of every advantage at your disposal.

Watch Nina discuss these topics in more detail in our video below:

How we can help

When it comes to securing your legacy, there’s no time like the present – and our friendly Wealth Protection team have decades of combined experience helping individuals ensure their wealth plan puts themselves and their loved ones in the strongest possible position for the future.

Get in touch with our specialists today via 03333 058375 or email WealthProtection@psg-law.co.uk to get a better understanding of your options. We’re here to help.