Research reported by Today’s Wills and Probate notes a major disconnect between when people believe they should start building an estate plan and when they actually do.
Indeed, the average age at which people begin their estate planning in the UK is 61.
While reaching your sixties can be a trigger as retirement nears, starting at this stage often leaves little time to optimise your tax strategy and effectively protect your assets.
Leaving estate planning until later in life can carry significant risks, from intestacy rules that dictate who inherits your estate without a will to losing control over crucial health and financial decisions.
The reality is that estate planning isn’t an activity reserved strictly for retirement.
Here are three different perspectives on when to start, and why each option beats waiting until you’re 61.
1. Start at 18 or as soon as you start earning
It may sound too early to start, but turning 18 is a significant legal milestone.
Once you reach legal adulthood, your parents no longer have the automatic right to manage your financial accounts or make medical decisions on your behalf should you become incapacitated.
That’s why it’s important to ensure you have a basic will in place, even if you don’t have any major assets. It can be equally helpful to set up Lasting Powers of Attorney (LPAs) for both financial decisions and health and welfare decisions. This ensures that someone you trust can step in to handle your affairs should you lose the ability to do so yourself.
Taking these steps early ensures that your wishes are respected, eliminating any doubt about your intent.
2. Adapt your plan as you react to major life milestones
Estate planning might become more relevant as your life begins to intertwine with others. Rather than focusing on a specific age, you could align your estate planning strategy with major life events.
These milestones include:
- Buying a property: Purchasing a home, particularly with a partner, could be one of your largest financial commitments. A will specifies what should happen to your share of the property. Note: If you have a joint tenancy, your share will automatically go to the surviving owner, and a will does not override this.
- Getting married or divorced: In England and Wales, marriage revokes an existing will unless you make it “in contemplation of marriage” to that specific person. In the same vein, divorce can significantly affect Inheritance Tax (IHT), as it removes spousal exemptions and changes the rules of intestacy.
- Having children: Becoming a parent, whether for the first or fifth time, means making important long-term decisions. This includes appointing a guardian for your young children in your will, alongside setting up trusts to protect their inheritance until they reach an appropriate age.
Remember, life events inherently change your legal and financial liabilities. By updating your estate plan as your family structure changes, you’re better able to keep your protections current.
3. Start at the age financial planners recommend
By your mid-forties, you have likely built up assets, such as property, pensions, and personal investments, while still having two to three decades of career earnings ahead of you.
The report in Today’s Wills and Probate notes that financial advisers recommend starting your estate plan at 44, but the average age people really start is 61. Indeed, the report also found that affluent UK families who begin their estate planning at 50 could secure up to £400,000 more in their legacy than those who wait until 70.
Late planning can leave families vulnerable to IHT, which could otherwise be a preventable tax. Starting in your mid-40s allows you to:
- Use your annual gifting allowances effectively over decades
- Structure long-term wealth transfer through trusts
- Align your estate strategy with your broader retirement plan.
The key takeaway here is that starting in your mid-40s could offer a clearer view of your total wealth with time to mitigate tax liabilities.
Read more: Have you considered these 5 often overlooked estate planning strategies?
It’s never too early to start your estate plan
Whether you are 18 and setting up your first LPA, or 44 and looking to protect your growing wealth, starting sooner rather than later is likely to be more beneficial for your estate.
Remember, building your plan early doesn’t mean you’re locking it away forever. It simply delivers peace of mind, with the flexibility to adapt as your life evolves.
If you’re ready to take the next step in securing your legacy, we’re here to help.
Email us at hello@vwmwealth.com or call us on 0141 229 4004 to find out more.
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.
The Financial Conduct Authority does not regulate estate planning, trusts, Lasting Powers of Attorney, or will writing.
Remember that taper relief only applies to gifts in excess of the nil-rate band. It follows that, if no tax is payable on the transfer because it does not exceed the nil-rate band (after cumulation), there can be no relief.
Taper relief does not reduce the value transferred; it reduces the tax payable as a consequence of that transfer.
