Later life planning
Thinking about how you'll manage your money, where you might live and what you want to happen to your estate when you die could help make sure that your later years are just as colourful as those that came before.
Later life living
Whether you want to stay living in your home, sell up and buy something with friends, or move into a retirement village, it's worth thinking about where you want to live and what support you might need. You might want to:
- stay in your own home or move in with family
- relocate to be closer to family or friends
- move to a retirement village or full-time residential care
Powers of Attorney
Thinking about the future, and the possibility that you might be unable to make your own decisions, can be difficult. But it’s important to think about who you’d like to take over when the time comes.
Only you can set up a power of attorney, and you have to organise it while you're still able to make decisions and understand what could happen as a result. You can choose one or more people, and they can support you temporarily through illness or for the long term.
The benefits of having a power of attorney are:
- someone can manage your affairs on your behalf
- you have the opportunity to discuss your wishes for how you want decisions to be made if anything were to happen to you
- gives you peace of mind that someone you trust will be able to make decisions for you
It can be costly and complicated if you don't have a power of attorney in place before you need it, and your spouse or civil partner may not be able to make decisions on your behalf without it.
There are two kinds of lasting power of attorney – one that covers financial decisions and one that covers decisions about your health and care.
These are called different things in different parts of the UK:
| Country | Financial affairs | Health and welfare |
| England | Property and financial affairs lasting power of attorney | Health and welfare lasting power of attorney |
| Northern Ireland | Enduring power of attorney for financial affairs | There is no power of attorney for health and welfare in Northern Ireland |
| Scotland | Continuing power of attorney for financial affairs | Welfare power of attorney |
| Wales | Property and financial affairs lasting power of attorney | Health and welfare lasting power of attorney |
A lasting power of attorney for financial decisions can be used while you still have mental capacity or after you’ve lost it. However, a health and care lasting power of attorney can only be used after you’ve lost mental capacity.
Setting up a lasting power of attorney
You can get the forms and guidance to create a lasting power of attorney online:
- In England and Wales: Office of the Public Guardian
- In Scotland: Office of the Public Guardian
- In Northern Ireland: Office of Care and Protection
It can take several weeks to set up a lasting power of attorney. It doesn’t cost anything to draw up a lasting power of attorney unless you want a solicitor to help you. However, in England, Wales and Scotland you have to register it before you can use it and there are registration fees. In Northern Ireland you can use a lasting power of attorney without registering it while you still have mental capacity but your attorney will need to register it if they believe your mental capacity has started to decline.
An ordinary power of attorney can be used to make financial decisions on your behalf. It can't be used once you're unable to make decisions yourself, and are usually put in place when people are unable to leave the house during a hospital stay or holiday.
You don't need to register an ordinary power of attorney with any government authority, however you may need a solicitor to help you set one up. Find out more about setting up a power of attorney on the MoneyHelper website.
Writing a will
Making a will is important as it tells everyone what you want to happen to your estate (your money, possessions and property) after you die. You can decide whether you want your estate to be passed on to friends, family or charities, and in the most tax efficient way.
If you don’t have a will, the law will decide how this is passed on and in some cases it could end up going to the government ("the Crown"). As of May 2024, there were over 6,000 unclaimed estates on the government list.
For example:
- John and Jane are brother and sister, and are very close, but their mother passed away some time ago and they haven’t spoken to their father in decades.
- Neither has married or had children. If one of the siblings were to pass away without a will (called ‘intestacy’ or ‘dying intestate’), under the rules in England and Wales their estate would go to their father, leaving the other with nothing.
You can make your will by:
- doing it yourself, perhaps using a will-writing kit
- using a will writing service
- using a solicitor
Writing a will can cost anything from £80 for a kit up to around £600 if your will is complex and includes planning for inheritance tax, trusts or assets like overseas property.
Once you've written your will, it must be signed by you and your witnesses in person. Your witnesses should not benefit from your will, but they can be an executor.
Your will should include two important instructions:
- who will inherit your estate when you die and how to share this out
- who will be in charge of following the instructions in your will and organising your estate. This person is called your executor or personal representative and you can have more than one. You can also leave all or some of your estate to your executors
You can also include instructions for your burial or cremation, or who you want to look after your children.
While you can write your own will, it's important you make sure it's legally valid. Nothing should be crossed out or amended, and your intentions should be clear. You should also let the executor(s) know that they have been named in your will.
Learn more about writing a will and choosing executors on the MoneyHelper website
Inheritance Tax (IHT)
Inheritance Tax (IHT) is a tax on your estate after you have died. Your estate includes all your property, money and possessions. There is normally no IHT to be paid if your estate is valued below the Nil Rate Band (NRB). This is currently £325,000 in the 2024/25 tax year.
If your estate is valued over the NRB, the part of your estate over the threshold might be liable for tax at the rate of 40% unless you leave everything above the threshold to:
- your spouse of civil partner, or
- an exempt beneficiary for example a charity.
Both the IHT tax rate and NRB threshold are subject to change.
There is another type of NRB, the Residence Nil Rate Band (RNRB) which, if available, enables you to pass your home (or share of it) to your children or grandchildren. This includes step-children, adopted and fostered children.
If the NRB and RNRB aren’t fully used when someone dies, then they can go to their spouse or civil partner’s estate when they die. This means that the surviving partner’s NRB and RNRB thresholds may be higher.
Not everyone will qualify for the full RNRB allowance. If your total estate is worth more than £2m, the extra allowance tapers off, reducing by £1 for each £2 that the estate is worth more than the £2 million taper threshold.
Find out more about the different Nil Rate Bands on the MoneyHelper website.
It is possible to plan for IHT in advance if the value of your estate (including your home) is likely to be worth over the £325,000 threshold.
Here are some ideas:
- Put all your assets into a trust for your heirs.
- Leave your estate to your spouse or civil partner.
- Give away gifts worth up to £3,000 per year regularly.
- Leave your estate to a charity.
Putting assets in some trusts can trigger a lifetime IHT charge and so you may want to seek specialist advice before considering this.
You can also consider buying a life insurance policy that will pay out a lump sum on your death. This can pay some or all of the IHT liability. In order for the lump sum from this policy to not count towards your estate value (and therefore be subject to IHT itself) it needs to be written in trust.
We’ve covered only the basics of IHT in this short introduction to get you thinking about whether this is something you need to plan for. If it is, MoneyHelper has a Guide to Inheritance Tax to help you understand more.
Depending on your circumstances you may want to seek financial advice. If you don't have an adviser, you can find one in your local area at unbiased.co.uk. You'll probably need to pay for this advice.
The detail provided is based on Legal & General’s understanding of the current legislation and guidance which is subject to change.
Get help finding care
It can be such a worry when you or someone you love needs extra help. But you don't have to navigate it alone – there are several services that can support you. Find out more about how we can help you find and pay for care.