6.5 Why You Need a Will: Estate Planning Essentials
Nothing is certain except death and taxes - and a will makes sure they both land where you want
Missed last week? Read it here, or see the full escape map here
A will is the final chapter of your financial story - make sure it ends exactly as you intend.
A well written will and life insurance policy can be the difference between leaving a legacy free of money traps, or those you leave behind being just as bogged down in them as you once were.
What Is a Will?
A will is your voice when you’re not around. It’s a legal document that spells out who inherits your assets, who carries out your wishes, and how you want your final affairs managed. Think of it as your last set of instructions - so they’re followed to the letter, not left to chance.
Why You Need a Will
Without a will, the State steps in and applies “intestacy rules,” which may bear no resemblance to your actual wishes. Your hard-earned savings, your home, even family heirlooms could be distributed in ways you’d never choose. A will puts you firmly in the driver’s seat - no one else.
If You Die Without One…
Your assets are parcelled out according to a rigid formula: spouse first, then children, then distant relatives. Unmarried partners, step-children, or close friends? Out of luck.
Worse still, the costs and delays of probate can leave your loved ones in legal limbo, grieving and financially stretched.
Probate is the legal process through which a deceased person’s will is validated by the court, their debts and taxes are settled, and the remaining assets are officially transferred to the named beneficiaries.
What a Will Says
A standard will covers:
Executors
Your chosen “project managers” who gather your assets, pay debts and tax, then distribute what remains.
Pick someone you trust - often a spouse, sibling or a professional - to steer the process smoothly.
Funeral Wishes
From burial vs. cremation to music choices, your will can record your preferences - lightening the burden on your family at a difficult time.
Specific Gifts
“I leave my grandfather’s watch to Alex, my niece.”
“My book collection goes to the local library.”
Naming particular items avoids family squabbles over sentimental objects.
Splitting Up the Estate
The net balance - everything after debts and taxes - can be divided by percentage or fixed sums.
You decide: equal shares, weighted shares, or even a “residual clause” that captures anything you’ve forgotten.
Children
Appoint guardians to care for minors if both parents pass.
Specify when and how gifted assets should be released (e.g. in tranches at ages 18, 21, 25).
Power of Attorney (POA)
A will takes effect at death - but what if you lose capacity before then? That’s where LPA (Lasting Power of Attorneys) come in:
Health & Welfare LPA
Grants someone authority to make decisions about medical care, where you live, even life-sustaining treatment - if you can’t decide yourself.
Property & Financial LPA
Authorizes someone to manage your bank accounts, pay bills, sell property or file tax returns on your behalf.
Appoint people you trust - and discuss boundaries up front. You’re giving them real power over your life and finances.
Life Insurance in a Trust
A life insurance policy paid directly into your estate can be tied up in probate, delaying payouts and reducing the benefit. Instead, set up a Trust:
Settlor: You, the policy-holder, who funds and sets the rules.
Trustees: The legally appointed managers of the trust.
Beneficiaries: The people you want to receive the payout, free of probate delay and typically outside your taxable estate.
This structure often delivers your lump-sum windfall to your family within days.
Tax Advantages of Trusts
Inheritance Tax (IHT) relief: Properly structured, the policy payout can bypass your estate entirely, avoiding a 40% IHT hit.
Control: You can set age or circumstance conditions on beneficiaries, helping protect against divorces or creditors.
Beneficiaries on Pensions
Your will doesn’t control pensions—you do, via your pension provider’s beneficiary form. Always:
Allocate on All Pensions
State your preferred recipients on each SIPP, workplace pension or annuity.
Update these forms after major life events (marriage, divorce, births).
Consistency
Reconcile your will and pension nominations so the right people get the right pots.
Recap & Next Steps
You’ve built your escape engine - now ensure it can be passed on trap-free:
Get a Will Written
DIY online packs for simple estates, or a solicitor for more complex matters.
Elect LPAs
Secure Health & Welfare and Property & Financial power for your most trusted allies.
Put Life Insurance in Trust
Protect critical lump-sum payouts from probate and IHT.
Allocate Pension Beneficiaries
Double-check every pension provider’s nomination form.
You’ve broken free - no more feeling squeezed by inflation, taxed to the bone, or chained to the desk. Your assets now do the heavy lifting, turning years of saving into a living.
But there are still traps to beware of - one careless withdrawal or a sudden market plunge can wipe out much of what you’ve built.
Next up, we’ll explore how to turn your nest egg into a reliable paycheck - so you can spend confidently, sleep soundly, and never fear the next crash.
Up Next: 7.1 How to live safely off your assets
Enjoyed this?
Follow me on Instagram: rohit.trivedi.39 and LinkedIn: rohit.trivedi
Tools & Resources
Explore all tools here: Tools & Resources — calculators, mappers, and guides to help you escape the money trap.”
Disclaimer: This content is for informational and educational purposes only. It does not constitute personal financial advice. Everyone’s situation is different — if in doubt, speak to a qualified, regulated financial adviser.