What is Estate Planning?

Squiggle Support Team

Last Update 2 months ago


Note: The following article is part of our Complimentary Articles Series, designed to provide additional insights and detailed information on specific topics within estate planning.


Alongside this article, we suggest exploring our pillar articles for a comprehensive understanding of general estate planning issues.


  • Why is it Important to Write a Will?
  • How Often Should I Update My Estate Plan?
  • When Should I Consider an Estate Plan?
  • What Are the Benefits of an Estate Plan?
  • What Are the Rules of Intestacy?
  • What Happens If I Die Without a Will?
  • What is Partial Intestacy?




INTRODUCTION


Estate planning is the systematic and organised set of activities that involve the management, protection, and distribution of an individual's assets during their lifetime. It also ensures their assets are distributed according to their final wishes after they pass away.


This article provides an overview of the critical elements involved in estate planning. It explains why having an estate plan in place at the earliest opportunity for comprehensive legacy planning and sound financial management is crucial.


For context, we recommend our other articles in relation to estate planning.




THE 4 PILLARS OF ESTATE PLANNING


There is a popular misconception that estate planning is about writing a Will. However, at Squiggle, we believe it's much more than this.


Estate planning is a comprehensive activity that includes several measures intended to safeguard your assets, protect your loved ones, and specify your healthcare choices in the event of incapacity.


At Squiggle, we talk about the 4 Pillars of estate planning, which should be evident in any sound estate plan.


  • Asset Management: This activity focuses on preserving and managing your assets throughout your life.


  • Wealth Preservation: This activity includes strategies and methods for reducing taxes and other estate-related costs to maximise your Estate's value.


  • Beneficiary Provision: This activity focuses on providing for your Beneficiaries precisely according to your instructions.


  • Healthcare Directives: This component enables you to state your preferences for medical care in the event you lose the capacity to express them yourself in the future.




MAIN INSTRUMENTS OF ESTATE PLANNING


Typically, a comprehensive estate plan consists of the following vital instruments:


  • A Will: This legal document reflects how you wish your assets to be distributed after death.


  • A Trust: Involves asset management and the care of Beneficiaries while you are still alive and without the need for Probate.


  • A Power of Attorney: Appoints an individual to manage your assets and financial affairs and make decisions on your behalf should you ever become incapacitated and lose the ability to make decisions for yourself.


  • Advanced Healthcare Directive: Lays out your healthcare preferences, including end-of-life care and organ donation wishes (where applicable).




ESTATE PLANNING IS A CONTINUOUS CYCLE


Another common misconception of estate planning is that it's a box-ticking exercise, meaning that once your documents are drawn up, there's nothing else to do.


This couldn't be further from the truth. Estate planning needs to reflect life's dynamic, fluid nature and the constantly changing circumstances impacting our lives, our loved ones, and our wealth.


At Squiggle, we break down this continuous cycle of activities into three essential activities:


  • Initial Assessment: The estate planning process starts with a detailed evaluation of your present assets, your family's needs, and your individual financial objectives. This fundamental step guarantees that your estate plan is customised to your unique circumstances and gets off to a strong start.


  • Documentation and Communication: Documentation is more than just the creation of legal paperwork. This step involves ensuring everyone involved in your estate plan communicates clearly and sets clear expectations. It consists of outlining the roles and responsibilities of Trustees, Executors, and any other relevant parties and making sure they know what's expected of them and the reasoning behind your decisions. This clarity minimises the possibility of potential Beneficiary misunderstandings or disputes and promotes a more seamless transition and administration of your Estate. Well-prepared documentation forms the foundation of a successful estate plan, thereby protecting your estate, clearly reflecting your wishes to all stakeholders, and ensuring compliance with the law.


  • Regular Reviews and Updates: This crucial step transforms estate planning into a dynamic, ongoing process. Implementing a periodic review mechanism into your estate plan allows it to reflect life's inevitable changes. Remember that our circumstances, relationships, values and priorities are constantly in flux. So, your estate plan requires consistent attention and adjustment, keeping it as current and relevant as your life itself.




Need to know more?

Good estate planning creates a solid foundation for preserving your financial legacy, providing for your loved ones in the future, and providing peace of mind for you and your loved ones.


Whether you are starting from scratch or looking to update your current arrangements, Squiggle can provide some clarity and direction, helping you to tailor a plan that suits the unique circumstances of your loved ones.


Book a callback, and we'd be happy to arrange a no-cost, no-obligation discussion with you to lay out the options available.


Alternatively, call us on 01233 659 796.


Or reach out to us here.


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