Direct Access Barrister

Wills, Trusts & Estate Planning

The complete guide · please read and keep

Estate planning: the whole picture

What we need from you, the limits and the costs, and the solutions that fit different families

Estate planning is simply deciding, in advance, what happens to what you own — in your lifetime if you lose capacity, and on your death. This guide gives you the whole picture: the information we will need from you, the limits and financial implications to understand, and the main solutions and which kinds of family they suit. It is general information; your own plan will be advised on separately, in writing.

Why this is rarely simple

Estate planning looks like a set of separate decisions — a will here, a trust there — but in practice it is a single balancing act. Almost every step that helps with one aim costs you something on another: give an asset away to save tax and you lose control of it; lock it in a trust for protection and you take on cost and complexity; keep everything simple and flexible and you may pay more tax. No arrangement maximises everything at once. Good planning is not about finding a perfect structure; it is about deciding, for your circumstances, which of these aims to prioritise and what you are willing to trade for them.

Control

Keeping a say over the asset and who ultimately benefits.

Access

Still being able to use the asset or its income yourself.

Tax efficiency

Reducing inheritance and other tax on what you pass on.

Flexibility

Keeping options open as family and circumstances change.

Protection

Shielding assets from a beneficiary’s divorce, creditors or youth.

Simplicity & cost

Keeping the plan cheap to set up, run and understand.

What we need from you

Good advice depends on a complete picture. Before our first proper discussion, it helps to gather the following. Do not worry about precision — round figures are fine to start.

Your assets

Home and any other property, savings and investments, pensions, life policies, business interests, and valuable possessions — with rough values and how each is owned.

Your liabilities

Mortgage, loans and any other debts, so we plan against the net estate, not the gross.

Your family

Marital status, children and stepchildren, dependants, anyone vulnerable, and any earlier marriages or estranged relationships.

What you already have

Any existing will, LPA, trust, or earlier gifts — especially gifts made in the last seven years.

Your wishes

Who you want to benefit and in what shares; who should be executor, trustee, guardian or attorney; and any particular concerns.

Foreign elements

Assets abroad, foreign domicile or residence, or beneficiaries overseas — these change the rules and need flagging early.

The limits and financial implications

A handful of figures and rules shape almost every plan. Allowances and rates change, so treat these as the framework, not the final numbers — we will confirm the current position for you.

Nil-rate band

The tax-free band for inheritance tax, currently £325,000 per person. Above it, inheritance tax is broadly charged at 40% on death.

Residence band

An extra band (up to £175,000) where a home passes to direct descendants, tapering away for large estates.

Spouse exemption

Gifts between spouses and civil partners are generally exempt, and unused bands can pass to the survivor — so a couple can often pass on substantially more than one person.

Seven-year rule

Most outright lifetime gifts fall out of your estate if you survive seven years. Keep any benefit and the “gift with reservation” rule pulls it back in.

Capital gains tax

Lifetime gifts of assets other than cash can trigger capital gains tax; assets passing on death are generally rebased instead. The two taxes pull in different directions and must be planned together.

Care fees

There is no reliable way to put a home beyond the reach of care fees, and trying can backfire under the “deliberate deprivation” rules. The IHT seven-year rule does not apply to care fees.

These do not work in isolation — they stack, and the interaction is where the real planning lies. A married couple can combine two nil-rate bands and two residence bands, and the unused part of the first to die passes to the survivor, so a couple leaving the home to their children can often pass on up to around £1 million before any inheritance tax is due. But the residence band is withdrawn by £1 for every £2 by which the estate exceeds £2 million, so for larger estates it can vanish entirely — which is precisely where lifetime planning starts to earn its place.

A worked illustration — a married couple, home to children

Two nil-rate bands (£325,000 × 2)£650,000

Two residence bands (£175,000 × 2)£350,000

Potentially passed free of inheritance tax£1,000,000

Illustrative only, at current allowances. The residence band depends on the home passing to direct descendants and tapers away above a £2m estate. We confirm the figures for your own situation.

Lifetime giving — more nuanced than “survive seven years”

The seven-year rule is only part of the picture. How a gift is treated depends on what kind it is, and several smaller exemptions do useful work with no seven-year wait at all:

—Outright gifts to people are “potentially exempt”: tax-free if you survive seven years. Taper relief is widely misunderstood — it reduces the tax, not the value of the gift, and only bites once the gift exceeds the nil-rate band.
—Gifts into most trusts are “chargeable” immediately, with a 20% charge on value above the nil-rate band — the reason trust funding is sized with care.
—The annual exemption (£3,000), small gifts and gifts on marriage are free immediately, and the annual exemption renews each year.
—Regular gifts out of surplus income — genuine, habitual, and not denting your standard of living — can be exempt with no seven-year clock at all. An undervalued and underused relief, but one that needs records kept.

Tax is one consideration, not the only one. The biggest risks to most estates are not tax but the avoidable ones: dying without a valid will, losing capacity without an LPA, leaving an unmarried partner unprovided for, or a home being diverted away from your children. A plan that fixes those is worth more than one chasing a marginal tax saving.

Farms, businesses and pensions

Two areas add real complexity, and both have changed recently — the reliefs for trading and farming assets, and the treatment of pensions. The detail below is the framework; the rules are in transition, so we will confirm the current position and coordinate with your accountant and financial adviser.

Agricultural and Business Property Relief (APR & BPR)

These two reliefs can take qualifying farming and business assets out of the inheritance-tax charge — the reason many farms and family businesses have passed down the generations without an IHT bill forcing a sale. In outline:

APR — agricultural property

Relieves the agricultural value of farmland, farm buildings and a proportionate farmhouse, where farmed by the owner (held 2 years) or let to a farmer (generally held 7 years). It covers agricultural value only — not development or “hope” value above it.

BPR — business property

Relieves an interest in a trading business or unquoted trading-company shares, held for 2 years. It can cover the value of a farming business beyond the bare agricultural value — but is denied where a business is “wholly or mainly” investment.

The 2026 reform you must factor in

Until recently both reliefs were given at 100% without limit. Under the reform taking effect from April 2026, 100% relief is now capped at a combined £1 million of agricultural and business property per person; value above that £1m allowance attracts relief at 50% — an effective 20% inheritance-tax rate (payable, for land, by instalments). The single £1m allowance is shared across APR and BPR together; it does not give £1m for each.

How they interrelate — matching relief to asset

The asset

The relief that may apply

Owner-farmed land & buildings

APR on agricultural value; BPR on the trading-business value above it.

Land let to a farmer

APR may apply to agricultural value; BPR usually not — letting is an investment.

Land with development / “hope” value

APR covers only agricultural value; the uplift relies on BPR (so trading status matters).

Trading company or business interest

BPR at 100% within the £1m allowance, then 50% above.

Investment business (lettings, holding investments)

Generally no BPR at all — the “wholly or mainly investment” exclusion.

The trading-versus-investment line is where most disputes with HMRC arise — a diversified farm with holiday lets, solar leases or contracting can fall on either side, and the answer drives the tax.

Single owners and couples — the allowance you can waste. The £1m 100% allowance is per person and is not transferable to a surviving spouse — unlike the nil-rate band. So a couple has two £1m allowances, but only if each estate actually uses one. Leaving the whole farm to the surviving spouse is tax-free under the spouse exemption, but it wastes the first spouse’s £1m, so more is exposed at 50% relief on the second death. The fix is deliberate will drafting — for example, each spouse passing up to £1m of qualifying property to the next generation or a trust on the first death — so both allowances are captured. A single owner has one £1m allowance and should plan lifetime gifts and succession around it.

Pensions in the estate-planning picture

Pensions sit oddly in estate planning, and people are often surprised by how they pass on:

—A pension usually does not pass under your will. Most schemes pay the fund at the discretion of the scheme administrator, guided by your nomination (“expression of wishes”) form. That form — not your will — directs your pension, so keep it current; an out-of-date nomination is a common and avoidable mistake.
—Because it passes outside the estate, a pension has generally fallen outside probate and outside inheritance tax — which is why it has featured in many estate plans.
—This is changing. From April 2027, unused pension funds are expected to be brought within the inheritance-tax estate. That materially alters the planning, and we will advise on the position as it then stands.

Where my role ends

We advise on the legal and inheritance-tax treatment of a pension as part of your estate, on nominations, and on how it fits with your will and any trust. We are not financial advisers and do not advise on whether to pay into, transfer, invest or draw from a pension — those are regulated matters for an FCA-authorised financial adviser. Where both are needed, we work alongside yours.

The solutions, and who they suit

For this kind of client…

…the usual building blocks

Young family, modest estate

Mirror wills with guardians for the children, and both LPAs each. The essentials, done well.

Unmarried couple

Wills are essential (intestacy gives a partner nothing); consider how the home is owned and a life-interest gift.

Second marriage / blended family

Life-interest trust by will, so a surviving spouse is provided for and children of a first marriage still inherit.

Vulnerable beneficiary

Disabled person’s or discretionary trust, protecting means-tested benefits while still providing.

Homeowners wanting certainty for children

Property trust of a share of the home to guard against sideways disinheritance — set up for the right reasons, early.

Substantial estate / business owner

Lifetime gifting, business/agricultural reliefs, and possibly a family investment company or trust holding the shares.

Each of these has its own note in this series. The right plan usually combines a few simple blocks rather than one clever structure.

Every solution costs something — come back to the balancing act. A lifetime gift saves tax but surrenders control and access. A trust adds protection and flexibility but brings registration, a tax regime of its own, and running cost. A company is efficient for growth but means accounts, filings and double taxation. Read any single note on its own and its structure looks like the answer; the real skill is weighing them together against the competing aims set out at the start, and choosing the least complicated plan that meets the aims that matter most to you — not the cleverest one available.

How I work, and what it costs

We start with the picture above, advise you in writing on the options and their implications, and agree a plan — then put it in place. You deal directly with a senior barrister throughout, and the fee is fixed and agreed before any work begins, so there is no clock running. Estate planning is not a one-off: review your plan after any major change — marriage, divorce, a birth, a death, a house move, or a significant change in your assets.

Your first step

Pull together a rough list of assets, debts and how each is owned.
Note your family circumstances and anything that worries you.
Find any existing will, LPA or trust, and details of gifts in the last seven years.
Bring it to a first discussion — we will tell you what, if anything, you need.

This guide is general information and does not constitute advice on your circumstances. Allowances, rates and rules change; we will confirm the current position and advise you in writing before anything is signed.

Barraj Legal — a trading style of Rhys Johns, a barrister authorised & regulated by the Bar Standards Board. Sophia House, 28 Cathedral Road, Cardiff CF11 9LJ