Wills, Trusts & Estates · Lifetime Estate Planning
Part of our wider Wills, Trusts & Estates services
Estate Planning for Living Clients
Effective estate planning is not a one-off event — it is an ongoing process that evolves with your life, your family, and the law. This guide covers the four pillars of lifetime estate planning: gifting strategies, tax efficiency, powers of attorney, and regular review cycles.
We advise high-value estate clients across Chester, Cheshire, North Wales and England and Wales on building and maintaining an estate plan that works — during your lifetime and beyond.
No obligation — talk through your options first. Costs explained clearly.
The four pillars of lifetime estate planning
A comprehensive estate plan for a living client addresses four interconnected areas. Each pillar reinforces the others — and neglecting any one of them can undermine the whole strategy.
1. Gifting strategies
Structured lifetime gifts reduce the value of your estate for IHT purposes while benefiting the people you care about during your lifetime. The key is using the right exemptions in the right order.
2. Tax efficiency
IHT planning, trust structures, and the interaction between income tax, capital gains tax, and inheritance tax must all be considered together to achieve the most tax-efficient outcome.
3. Powers of attorney
Lasting powers of attorney ensure that someone you trust can manage your affairs if you lose mental capacity — protecting your estate and your family from the cost and delay of Court of Protection proceedings.
4. Regular review cycles
Your estate plan should be reviewed at least annually and whenever a significant life event occurs. An out-of-date plan can be as harmful as no plan at all.
Gifting strategies
Lifetime gifting is one of the most effective ways to reduce your estate for IHT purposes. The key is understanding which exemptions are available, how they interact, and how to structure a gifting programme that is sustainable and properly documented.
The seven-year rule
Most gifts made during your lifetime are potentially exempt transfers (PETs). They become fully exempt from IHT if you survive seven years from the date of the gift. If you die within seven years, the gift may be subject to IHT — though taper relief reduces the charge if you survive between three and seven years. Keeping a clear record of all gifts made is essential.
IHT gifting exemptions
Annual exemption
Each individual can give away up to £3,000 per tax year free of IHT. Any unused allowance from the previous year can be carried forward — giving a maximum of £6,000 in the first year of a gifting programme.
Small gifts exemption
You can give up to £250 to any number of individuals each tax year, completely free of IHT. This cannot be combined with the annual exemption for the same recipient.
Wedding and civil partnership gifts
Gifts on marriage or civil partnership are exempt: up to £5,000 from a parent, £2,500 from a grandparent or remoter ancestor, and £1,000 from any other person.
Normal expenditure out of income
Regular gifts made out of surplus income — not capital — can be completely exempt from IHT if they form part of your normal expenditure and do not reduce your standard of living. This is one of the most powerful but underused exemptions available.
Potentially exempt transfers (PETs)
Larger gifts to individuals are potentially exempt transfers. They become fully exempt if you survive seven years from the date of the gift. Taper relief reduces the IHT charge if you survive between three and seven years.
Gifts to charity
Gifts to UK registered charities are fully exempt from IHT — both during your lifetime and on death. Leaving 10% or more of your net estate to charity also reduces the IHT rate on the remainder from 40% to 36%.
Practical tip: the normal expenditure out of income exemption
For clients with significant income — particularly those drawing pension income they do not need — the normal expenditure out of income exemption can allow very large sums to be gifted free of IHT each year. There is no upper limit, provided the gifts are regular, made out of income (not capital), and do not affect your standard of living.
Proper documentation is essential. We advise on how to structure and record these gifts to ensure HMRC will accept the exemption applies.
Tax efficiency
Inheritance tax planning does not operate in isolation. The interaction between IHT, income tax, and capital gains tax must be carefully considered — particularly when gifting assets that have increased in value, or when structuring trusts.
Nil rate band and residence nil rate band
Every individual has a nil rate band of £325,000 — the amount that can pass free of IHT. An additional residence nil rate band of up to £175,000 applies where a main residence passes to direct descendants. Married couples and civil partners can transfer unused allowances to each other, potentially giving a combined threshold of up to £1 million.
Spousal and civil partner exemption
Transfers between spouses and civil partners are fully exempt from IHT — both during lifetime and on death. This exemption is a cornerstone of most estate plans, but relying on it exclusively can create a larger IHT problem on the second death. We advise on how to use the exemption strategically rather than as a default.
Business property relief (BPR)
Business assets that qualify for BPR can pass free of IHT at 100% or 50% relief. Qualifying assets include shares in unquoted trading companies, interests in a business partnership, and certain AIM-listed shares. From April 2026, BPR will be capped at £1 million at 100% relief, with 50% relief above that threshold.
Agricultural property relief (APR)
Agricultural land and buildings used for farming can qualify for APR at 100% or 50% relief. From April 2026, APR will also be subject to a combined £1 million cap with BPR. Farmers and rural landowners with significant agricultural estates need to review their planning in light of these changes.
Trust structures for tax efficiency
Discretionary trusts, life interest trusts, and bare trusts each have different IHT, income tax, and CGT treatment. The right trust structure depends on your objectives — whether that is protecting assets for vulnerable beneficiaries, reducing your estate, or providing flexibility for future generations.
Capital gains tax on gifts
Gifting an asset that has increased in value can trigger a capital gains tax charge — even though no money changes hands. Hold-over relief may be available in certain circumstances, deferring the CGT charge until the recipient disposes of the asset. We advise on the CGT implications of any proposed gift before it is made.
2024 Budget: Pensions and IHT from April 2027
From April 2027, unused pension funds will be brought into the scope of inheritance tax. Currently, pensions sit outside your estate for IHT purposes — making them one of the most tax-efficient assets to pass to the next generation. This change will significantly affect clients with large defined contribution pensions or SIPPs.
If you have a significant pension pot, planning now — before the rules change — may allow you to mitigate the impact. We advise on the options available, including drawdown strategies and the interaction with your wider estate plan. Read our full guide to the 2024 Budget IHT changes →
Lasting powers of attorney
A lasting power of attorney (LPA) is a legal document that appoints one or more people — your attorneys — to make decisions on your behalf if you lose mental capacity. Without an LPA, your family may need to apply to the Court of Protection to manage your affairs — a process that is slow, expensive, and stressful.
An LPA must be made while you have mental capacity
Once you lose mental capacity, it is too late to make an LPA. Many clients assume they have time — but a sudden stroke, accident, or diagnosis of dementia can remove that option overnight. We strongly recommend making LPAs as part of your estate planning, regardless of your age or current health.
Property & Financial Affairs LPA
- Manage bank accounts, investments, and savings
- Buy, sell, or mortgage property on your behalf
- Collect income including pension and benefits
- Pay bills and manage day-to-day finances
- Can be used while you still have capacity (if you choose)
- Essential if you lose capacity unexpectedly
Health & Welfare LPA
- Make decisions about medical treatment and care
- Choose where you live — including care home decisions
- Give or refuse consent to life-sustaining treatment (if authorised)
- Communicate your wishes to healthcare professionals
- Can only be used when you lack mental capacity
- Prevents family disputes over care decisions
Choosing your attorneys
Choosing the right attorneys is one of the most important decisions in the LPA process. Your attorneys will have significant power over your affairs — and the wrong choice can lead to financial abuse, family conflict, or decisions that do not reflect your wishes.
Who can be an attorney?
Any adult (18+) who has mental capacity. Common choices include a spouse or civil partner, adult children, a trusted friend, or a professional such as a solicitor.
Can I appoint more than one attorney?
Yes — and you can specify whether they must act jointly (all must agree) or jointly and severally (each can act independently). We advise on which is appropriate for your circumstances.
What if my attorney loses capacity?
You can appoint replacement attorneys to step in if a primary attorney is unable to act. This is particularly important where you have appointed a spouse or partner as sole attorney.
Can I restrict what my attorney can do?
Yes — you can include instructions (which attorneys must follow) and preferences (which they should have regard to). We advise on how to draft these to achieve your intentions without creating practical difficulties.
Registration: An LPA must be registered with the Office of the Public Guardian before it can be used. Registration currently takes several weeks. We handle the registration process on your behalf and advise on the most efficient way to proceed. Read our full LPA guide →
Regular review cycles
An estate plan that was right five years ago may be wholly inadequate today. Changes in your family, your wealth, your health, and the law can all render an existing plan ineffective — or even counterproductive. We recommend a formal review at least once a year, and immediately whenever any of the following events occur.
Annual review
An annual review ensures your gifting programme is on track, your LPAs remain fit for purpose, and your will reflects your current wishes and family circumstances.
Property purchase or sale
Buying, selling, or inheriting property changes the composition and value of your estate — and may affect your IHT position, nil rate band planning, and trust structures.
Marriage, divorce, or bereavement
Marriage revokes a will in England and Wales. Divorce does not revoke a will but removes an ex-spouse as beneficiary and executor. Bereavement may trigger a deed of variation opportunity.
Birth of children or grandchildren
The arrival of new family members is an opportunity to review your will, update guardianship provisions, consider trust structures for minor beneficiaries, and begin a structured gifting programme.
Business changes
Starting, selling, or restructuring a business affects business property relief eligibility, the composition of your estate, and the succession planning provisions in your will.
Significant change in wealth
A substantial increase in wealth — through inheritance, investment growth, or business sale — may push your estate above the IHT threshold for the first time, or significantly increase your exposure.
Change in tax law
The 2024 Budget introduced significant changes to pension IHT treatment from April 2027. Changes in tax law can fundamentally alter your estate planning strategy and require a prompt review.
Health changes
A diagnosis of serious illness or cognitive decline makes it urgent to review and update LPAs, advance decisions, and your will — before mental capacity may be called into question.
What a review covers
A comprehensive estate plan review with PDA Law covers all aspects of your lifetime and post-death planning — ensuring everything remains aligned and up to date.
Will review
Check that your will reflects your current wishes, family circumstances, and the current law.
Gifting programme
Review gifts made in the past year, update the gifting schedule, and ensure exemptions are being used optimally.
IHT exposure
Recalculate your estate's IHT exposure in light of any changes in asset values, the law, or your family structure.
LPA status
Confirm that LPAs are registered, attorneys are still appropriate, and no changes are needed.
Trust administration
Review any existing trusts — including trustee appointments, distributions, and compliance with trust law.
Pension nominations
Review pension death benefit nominations in light of the 2027 IHT changes and your current family circumstances.
The team advising living clients
Darren Steele
Senior Private Client Executive · STEP Member
Lifetime Estate PlanningDarren has worked in the legal sector since 1998 and has been a STEP member since 2011. He specialises in lifetime estate planning — including gifting strategies, trust structures, LPAs, and regular estate reviews for high-value clients.
Laura Kirton
Wills & Probate Solicitor · 10 Years Qualified
Wills & LPA SpecialistLaura regularly advises living clients on estate planning — from drafting wills and LPAs to advising on gifting programmes and trust structures. She works closely with clients' financial advisers to ensure the legal and financial plan are aligned.
David Stahler
Wills, Trusts & Estates Executive
Estate PlanningDavid is our first point of contact for clients enquiring about lifetime estate planning. He brings a warm, personable approach to what can be a sensitive subject — and ensures clients feel fully informed before any work begins.
Nikolina Vukovic
Legal Executive — Wills, Trusts & Estates
Trusts & Estate AdministrationNikolina supports clients through the implementation of estate plans — including trust deeds, LPA registration, and ongoing estate administration. She ensures that the legal structures put in place during a client's lifetime are correctly documented and maintained.
Related estate planning services
Inheritance Tax Planning
IHT mitigation strategies, lifetime gifting, and nil rate band planning.
Lasting Powers of Attorney
Appoint trusted attorneys to manage your affairs if you lose capacity.
Trusts
Discretionary and life interest trust structures for asset protection and tax planning.
IHT Calculator
Estimate your inheritance tax exposure in under two minutes.
2024 Budget IHT Changes
What the October 2024 Budget means for your estate and pension from April 2027.
Case Studies
Anonymised examples of estate planning strategies implemented for our clients.
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