What Is Estate and Succession Planning?

In simple terms, estate planning - or succession planning - is a way to ensure your estate is managed and distributed efficiently, and as per your wishes, when you die. Estate planning includes a valid will, but proper estate planning covers a lot more than just a will. Every adult should have a will, and the larger and more complex your estate and family circumstances are, the more reason you have for a carefully thought-out estate or succession plan - even more so when your estate includes a family farm or business.

How does estate planning provide for incapacity?

Proper estate planning allows you to make provision for incapacity - either temporary or permanent - should you ever lose mental capacity. Losing mental capacity or becoming otherwise impaired later in life is not something many of us think about or plan for, but accidents, illnesses and even age can change that.

Provision is made through an appointment of Enduring Power of Attorney and an appointment of Enduring Guardian as part of your estate planning. Both are necessary, since each deals with specific aspects of your life if you lose the ability to make your own decisions. The person given Power of Attorney can make decisions relating to your financial and legal affairs, while the Enduring Guardian may make decisions relating to your medical treatment, welfare and lifestyle.

What happens to your business or farm?

An easily overlooked consideration when drawing up your will is any farm or business you own. Effective estate planning sees you outline exactly what is to happen to the farm or business upon your death or incapacity - whether it is sold or passed on to beneficiaries, and who succeeds you in whatever role you held.

If the business is sold, the proceeds of the sale become part of your general estate. Where it is passed on to beneficiaries, you need to know they are willing to take on the responsibility of keeping it operational. For larger businesses with a board, your plan for succession should be discussed and agreed to by the board.

Can estate planning reduce tax?

Yes - estate planning can help reduce the tax liabilities of your estate, as well as helping to avoid family provision claims and ensuring your estate is distributed exactly as you planned. How this is achieved depends on a number of factors, and solicitors specialising in estate and succession planning are best positioned to advise on your unique circumstances.

How often should you update your plans?

Anyone with a will should revise it periodically to make sure it accounts for all their assets and beneficiaries and continues to reflect their wishes. Because estate and succession planning goes into much more detail, it should be revisited every few years and updated as needed.

That includes making provision for new beneficiaries as your family grows, reassessing the distribution of your estate, and possibly adding requirements for trusts as your estate grows. It also means reviewing who is named as executor of your estate, and your appointments of Enduring Power of Attorney and Enduring Guardian, and amending them if necessary.

Estate and succession planning covers so much more than the distribution of your assets upon your death - it is worth getting advice on all aspects of it, from large but uncomplicated estates through to highly complex ones.