Enjoying Your Wealth — Estate Planning Guide
A practical estate planning guide covering Inheritance Tax, gifting strategies, wills, Lasting Powers of Attorney, and protecting your family’s inheritance.
Whether you’re trying to understand what a pension drawdown is, deciding if you should overpay your mortgage, or checking this year’s tax allowances — we’ve written a guide for it. Everything here is free, jargon-free, and written for real people, not finance professionals.
This Guide is For You If…
- You’re retired or approaching retirement.
- Your estate could be liable for Inheritance Tax.
- You want to ensure your family is provided for.
- You’re thinking about gifting or trust strategies.
- You want your affairs in order.
Understanding Your Estate
Your estate is everything you own at death: property, pensions (from April 2027), savings, investments, life insurance (unless in trust), and personal possessions — minus debts and funeral costs.
If the total is above £325,000 (the nil rate band), Inheritance Tax is charged at 40% on the excess.
The Allowances
Understanding the allowances is the foundation of estate planning.
- Nil rate band: £325,000 per person.
- Residence nil rate band: £175,000 (if passing your home to direct descendants).
- Both are transferable between spouses.
- Maximum tax-free amount for a couple: £1,000,000.
- But: the residence nil rate band tapers for estates over £2 million.
Gifting Strategies
Gifting is one of the most effective ways to reduce your estate — but you need to know the rules.
- Annual exemption: £3,000 per year (can carry forward one year).
- Small gifts: £250 per person per year.
- Wedding/civil partnership gifts: £5,000 from parents, £2,500 from grandparents.
- Gifts from surplus income: unlimited, but must be regular and from income (not capital).
- The 7-year rule: gifts over the annual exemption become tax-free if you survive 7 years.
- Taper relief: reduces the tax if you die between 3–7 years after gifting.
The April 2027 Pension Change
From April 2027, unused pension pots will be included in your estate for Inheritance Tax purposes. This is a significant change that affects many families.
- Consider drawing down faster.
- Gift from other assets instead.
- Review your overall estate strategy.
- Model both scenarios (current rules and 2027 rules) to understand the impact.
Getting Your Documents in Order
Estate planning is not just about money. The paperwork matters too.
- Will: essential — review every 3–5 years.
- Lasting Power of Attorney: for finances and health decisions.
- In Case of Emergency letter: tells your family where everything is and what to do.
- Life insurance: ensure policies are written in trust (otherwise they form part of your estate).
Working with Professionals
For complex estates — trusts, business assets, cross-border situations — work with a solicitor and/or financial adviser. Fynla gives you the numbers to make those conversations productive and efficient.
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