5 reasons why estate planning is a job for today, not tomorrow

You may think that estate planning is something best left to later life when you have finished work and have a clearer picture of what your legacy is likely to be.

However, while there is certainly merit to restructuring your estate plan as you progress through life, the earlier you get started, the better, particularly with regard to Inheritance Tax (IHT) mitigation.

Indeed, Today’s Wills & Probate reports that families in the top 10% of UK wealth could pass an average of £397,000 more to their loved ones if they begin estate planning at 50 instead of 70.

Read on to discover five reasons why estate planning is a job for today, not tomorrow.

1. You can use more of your gifting allowances

Gifting can be a key part of estate planning as it both improves the efficiency of your wealth and means that your loved ones can benefit from more immediate support. The earlier you start your gifting strategy, the longer you have to take advantage of your allowances.

The main gifting exemption is the annual gifting allowance, which enables you to give away a portion of your wealth each year without the possibility of it later attracting IHT. In the 2026/27 tax year, it is set at £3,000.

If you don’t use your gifting allowance, you can carry it forward one tax year, meaning you can give away up to £6,000 in a single year and couples can combine their allowances.

While this might not sound like a significant amount, if you and your partner use your full allowance every year for 30 years, you could give away £180,000 between you. This would significantly reduce the size of your estate and the eventual IHT liability.

For larger gifts that exceed the allowance and a handful of other gifting exemptions, the rules are different. These are typically treated as potentially exempt transfers (PETs).

There is no immediate IHT charge when you make a PET, but you generally need to survive seven years for the gift to fall completely outside your estate. If you die within those seven years, the gift may become subject to IHT, although the amount due can reduce depending on how long you survive after making it.

So, planning your gifts early comes with two clear financial benefits. First, you can maximise your gifting allowance over multiple years or decades. Second, the sooner gifts are made, the more time there is for them to fall outside your estate.

2. Qualifying assets have time to become eligible for Business Relief

Another reason to start planning early is to ensure your qualifying assets become eligible for Business Relief (BR).

BR can provide up to 100% relief on certain assets, provided relevant conditions are met. Under the current rules, you can pass on up to £2.5 million worth of assets that qualify for 100% BR. Any assets passed on above this allowance that would otherwise be eligible will still receive 50% relief.

Couples can combine their allowances, meaning you and your partner can pass on up to £5 million of business assets free from IHT, with the right planning.

However, one of the key conditions for BR eligibility is that you need to have owned the assets for at least two years before you die. This means that BR is not something you can put in place at the last minute.

As such, if you are considering investing in BR schemes as part of your estate planning, starting earlier helps ensure you will meet the ownership requirement.

3. You have more flexibility and reduce the chances of making mistakes

One of the main benefits of starting your estate planning early is the flexibility it gives you.

Your financial circumstances, family situation, and the wider tax rules are all likely to change over time. If you put a plan in place now, you can review and adapt it as those changes happen, rather than having to make important decisions when you are dealing with illness, bereavement, or a change in tax legislation.

Early planning can also help avoid mistakes. Decisions made in a hurry are more likely to overlook potential tax liabilities or have consequences you had not considered. Taking the time to think through what you want to achieve means your arrangements are more likely to reflect your wishes and work together effectively.

Estate planning is therefore not something to do once and forget about. By putting a plan in place early and reviewing it regularly with your financial planner, you can adapt to changes in your circumstances and legislation, while giving yourself the best chance of protecting your wealth and passing it on in the way you intend.

4. Your loved ones‍ will know what to expect

It is also worth remembering that estate planning is not simply about what happens after you die.

There may come a point when you are no longer able to make financial or personal decisions for yourself. In this instance, putting Lasting Powers of Attorney (LPAs) in place can ensure that someone you trust is able to make those decisions on your behalf if necessary.

Likewise, talking to your family about your plans can help avoid confusion and disagreements later. Your loved ones do not necessarily need to know every detail of your finances, but making sure they understand your intentions can make things much easier when the time comes.

5. Your financial planner has time to implement an effective long-term strategy

Despite the advantages of starting early, estate planning is something many people put off until much later in life, despite financial planners advising against this.

The report in Today’s Wills & Probate found that advisers believe the ideal age to begin estate planning is 44.6, yet the typical client does not start until 61. Among people aged 45 to 49, 86% had done no estate planning at all, while the figure for those in their 50s was still 70%.

The consequences of leaving things late are not necessarily limited to the potential tax bill. Delaying important conversations can also create difficulties for families. The same research found that around 7 in 10 advisers had witnessed family conflict arising because estate planning had been delayed.

Estate planning does not have to be complicated, and starting the conversation does not mean you need to have all the answers straight away. The earlier you begin, the more time you have to understand your options, put the right arrangements in place, and make changes as your circumstances evolve.

To speak to a financial planner about your estate plan, get in touch.

Email [email protected] or call us on 01625 466360.

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, cashflow planning, tax planning, trusts, Lasting Powers of Attorney, 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.