Estate planning is quite simply the process of preparation and planning for the estate that you will leave behind after your death, so as to best mitigate the effects of any applicable inheritance tax and to provide for your family and loved ones after you have passed away. It is about making sure that your wishes for your assets and inheritance are followed after your death, and includes such matters as:

• Your will. Perhaps the most important part of estate planning, a legal will clearly indicating your wishes for what is to happen to your estate is essential to avoid dying intestate and to providing for your chosen beneficiaries.
  
  
• Inheritance tax. Inheritance tax can be mitigated with careful planning, through use of techniques such as discretionary trusts, life assurance, gift exemptions and potentially exempt transfers. All of these can help reduce the total taxable value of your estate, to protect your assets and to convey them to your beneficiaries with the minimum taken by the taxman.

It is worth starting on estate planning well in advance, so that you can undertake any necessary steps in time for your death. This is particularly true for inheritance tax, as there is a seven-year period for many gifts and transfers after which they become exempt from the tax if you survive for the full seven years.

With the recent rise in property prices more people than ever are potentially exposed to inheritance tax (IHT). Proper planning can make sure your liability is reduced. And that means your beneficiaries profit, not the taxman.

Inheritance tax is payable on your estate when you die, if it exceeds a certain limit. Your estate is the net value of everything you own, minus any debts. Currently 40% of an estate above £312,000 goes to HMRC.

There are many ways to reduce your liability, one of which is the establishment of a trust. English trust law is very flexible - it means you can use a trust to make a gift to anyone of any age, decide when and how that gift is passed on, and take into account possible changes in circumstances.
Certain trusts have been specifically designed to reduce IHT.